The EU’s proposed SFDR 2.0 reforms could finally recognise the true “green leaders” in commercial real estate—if we pair them with honest, transformation-focused reporting. For too long, the system has rewarded superficial metrics over real change. It’s time to shift the focus from portfolio optics to portfolio impact.

Published: 18 May 2026

The Illusion of Progress

Logistics investors often celebrate rising certification rates, LED coverage, and PV capacity as proof of sustainability. But here’s the catch: These metrics can mask asset rotation. Selling off high-emission buildings and buying “green” ones improves KPIs on paper—but leaves systemic emissions untouched. The “brown” assets don’t disappear; they just change hands.

The hard truth? If your portfolio looks greener because you’re swapping assets, not upgrading them, you’re not driving real change.

The Case for Refurbishment Over Replacement

In the EU, 85% of buildings were constructed before 2001, and most will still stand in 2050. In logistics, 61% of European warehouses are over a decade old. The 2050 footprint is already built—what it needs is transformation, not selection.

Whole-Life Carbon: Why “New” Isn’t Always “Greener”
Demolishing and rebuilding generates massive embodied carbon emissions. A new building may score better on operational metrics, but its lifetime CO₂ balance is often worse than a refurbished one. Experts agree: Preserving structures is usually the lower-emission choice. To prove it, we need explicit whole-life carbon reporting—operational and embodied.

From Metrics to Meaningful Change

To distinguish real progress from accounting tricks, sustainability reporting must show:

Genuine improvements in existing assets—not just portfolio reshuffling.
Building-level progress, not just aggregated portfolio scores.
Recognition for upgrading “brown” assets, not just buying “green” ones.

When reporting tracks how buildings evolve from inefficient to efficient—not just how “green” a portfolio appears today—transformation becomes measurable and comparable.

Why This Matters for Labels and Funds

The proposed SFDR transition category would allow clear labelling of brown-to-green products. Meanwhile, ESMA guidelines demand that fund names reflect actual strategies—a critical tool against greenwashing.