It is well understood that most of the buildings that will be standing in 2050 already exist — up to 80 percent of current building stock, according to the World Economic Forum in 2022. Yet, green finance continues to flow primarily towards assets that are already demonstrably sustainable (e.g. the top 15 percent concept in the Australian Sustainable Finance Taxonomy).
Over time, this dynamic has been reinforced by ratings agencies, banks and nonbank lenders that focus on elevating the top-performing segment of the market. The result is a growing divide between the sustainability “haves” and “have-nots” — creating a market split between high-performing green assets and disengaged, lower-performing ones. While well-intentioned, there are better ways to advance both business goals and decarbonisation targets.
Research into sustainable finance — beyond just property — has found that reducing financing costs for firms that are already green can lead to coun
