Everyone wants to talk about building better buildings. Net-zero offices. Passive house apartments. Those sleek glass towers with solar panels and green roofs.

Great. Build those.

But here's what nobody wants to talk about: 80% of the buildings that'll exist in 2050 are already standing today.

We're focusing on the wrong buildings

I was in Cleveland last month meeting with a company that retrofits old commercial buildings. The CEO walked me through their latest project – a 1970s office building that was basically hemorrhaging energy. Single-pane windows. Ancient HVAC system. Insulation that had probably been there since Carter was president.

"This building," he told me, "uses three times more energy per square foot than a modern equivalent. And there are thousands just like it in this city alone."

Millions across the country.

We can't knock them all down and start over. That would release massive amounts of embodied carbon. Cost trillions. Displace entire communities. Plus... where would everyone work and live while we rebuilt everything?

So we're stuck with a choice. Either we figure out how to fix the buildings we have, or we miss our climate targets. It's really that simple.

Why retrofits haven't happened already

You'd think building owners would be jumping at the chance to cut their energy bills by 40-50%. But it's complicated.

The upfront costs are real. A deep energy retrofit can run $50-150 per square foot. For a 100,000 square foot building, that's $5-15 million. Most building owners don't have that kind of capital sitting around.

The payback periods are long. Even with energy savings, you're looking at 10-15 year ROI in many cases. Longer than most ownership cycles.

And honestly? It's just... messy. You're dealing with occupied buildings. Tenants who don't want construction noise. Systems that need to keep running during the retrofit. It's not like building new where you have a clean slate.

So most building owners do the minimum. Replace the boiler when it dies. Patch the roof. Keep things limping along.

Meanwhile, those buildings keep burning through energy and carbon.

What's starting to change

Two things are making retrofits more viable now.

First, the technology has gotten better. Heat pumps that actually work in cold climates. Smart building systems that optimize energy use in real-time. Modular retrofit solutions that cut installation time (and tenant disruption) dramatically.

But second – and this is bigger – the financing is catching up.

We're seeing new models emerge. Property Assessed Clean Energy (PACE) financing that ties the loan to the building, not the owner. Energy-as-a-service models where companies front the capital and get paid back from energy savings. Green mortgages with better terms for efficient buildings.

At Clarity Ventures, we've invested in three companies in the built environment sector working on different pieces of this puzzle. One does the actual retrofit work with a tech-enabled approach that cuts costs by 30%. Another finances the projects through an innovative fund structure. The third provides the monitoring and verification to prove the savings are real.

Because that's the thing... you need the whole ecosystem. Technology, financing, and verification all working together.

A project that shows what's possible

There's a building in Baltimore I keep coming back to. 12-story office building built in 1968. Classic energy nightmare.

The ownership group partnered with one of the companies we've invested in to do a comprehensive retrofit. New windows. Building envelope improvements. Complete HVAC overhaul with heat pumps. LED lighting throughout. Smart controls that learn usage patterns and optimize accordingly.

Total project cost was $8.2 million. Sounds like a lot.

But energy costs dropped 52% in year one. That's $430,000 annually. The building qualified for state and federal incentives that covered $1.8 million upfront. And they financed the rest through a PACE loan tied to the property.

Net payback? Just under 11 years. But here's what makes it really work – they're a long-term holder. This building will be in their portfolio for 30+ years. Over that timeframe, the energy savings dwarf the retrofit costs.

Oh, and tenant satisfaction went up. Turns out people like working in buildings with good air quality, consistent temperatures, and actual daylight.

The scale of the opportunity

There are roughly 5.9 million commercial buildings in the United States. The vast majority are older, inefficient, and ready for retrofits.

If we could retrofit even half of them to current efficiency standards, we'd reduce national carbon emissions by roughly 8-10%. That's equivalent to taking 80 million cars off the road.

The investment opportunity is enormous. McKinsey estimates the U.S. retrofit market at $200-300 billion over the next decade. Europe is even bigger.

But it's not just about the money. This is one of the fastest, most practical ways to cut emissions at scale. We don't need breakthrough technology. We don't need massive policy changes (though supportive policies help). We mostly just need to apply existing solutions to existing buildings.

What needs to happen

Honestly? We need more building owners to just... do it.

I know that sounds simplistic. But we have the technology. We have financing options. We have proof that it works economically.

What we don't have yet is momentum. Most building owners are still in wait-and-see mode. Waiting for regulations to force their hand. Waiting for costs to come down. Waiting for someone else to go first.

But the economics are there now. The climate imperative is there now. And the competitive advantage is there now – buildings with lower operating costs and better tenant experiences command higher rents and valuations.

The building owners figuring this out today will be ahead of the curve. The ones waiting will be stuck with stranded assets as energy costs rise and regulations tighten.

Why we're investing here

At Clarity Ventures, we look for climate solutions that are scalable, economically viable, and don't require people to act against their interests.

Building retrofits check all three boxes.

They scale because there are millions of buildings that need this. They're economically viable because energy savings and incentives make the math work. And they align interests because building owners end up with more valuable, more efficient assets.

Plus – and this matters – the impact is immediate. When you retrofit a building, carbon emissions drop that year. Not in 2040 when some new technology might be ready. Now.

That's rare in climate investing.

So yeah, new buildings are important. We need those too. But if we're serious about hitting climate targets, we've got to focus on the buildings we already have.

They're the problem. And they're the solution.

Clarity Ventures invests in companies mitigating climate change across six sectors, including the built environment. Want to discuss opportunities in building efficiency and retrofits? Let's talk.