Dive into the world of sustainable construction with Luca Calaraili, a seasoned expert in design and architecture with a passion for leveraging technology to revolutionize the industry. In this insightful conversation with Marie Waier, Luca unpacks the critical role of Environmental, Social, and Governance (ESG) principles in driving the construction sector toward net-zero goals. From the transformative power of governance to the practical impact of retrofit projects on energy efficiency, Luca shares his expertise on how the industry can build a more sustainable future.
How do you define ESG within the construction industry, and what makes it so vital today?
ESG, or Environmental, Social, and Governance, is essentially a framework that guides how the construction industry addresses its impact on the planet, people, and ethical practices. Environmentally, it’s about reducing carbon emissions—construction accounts for a staggering 40% of emissions in the UK alone. Socially, it focuses on community impact, worker safety, and fair labor practices. Governance ties it all together with accountability and transparent decision-making. It’s vital today because the pressure is on—regulators, investors, and the public are demanding greener, more responsible projects. Beyond that, a strong ESG strategy isn’t just about compliance; it creates long-term value by mitigating risks and aligning with broader sustainability goals.
What’s behind the growing pressure on the construction sector to elevate its ESG standards?
The construction industry is under the spotlight because of its outsized environmental footprint. Globally, it’s responsible for 28% of emissions, which is a wake-up call. Add to that the push for net-zero targets, like the UK’s 2050 goal, and you’ve got governments tightening regulations. Investors are also prioritizing sustainability, refusing to fund projects that don’t align with ESG principles. Then there’s public awareness—people want buildings that don’t harm the planet or exploit workers. It’s a perfect storm of expectations, and the sector has to adapt fast or risk being left behind.
How can governance be the backbone of a meaningful ESG strategy in construction?
Governance is the glue that holds ESG together. It’s about how decisions are made, who’s held accountable, and whether those choices reflect ethical and sustainable values. In construction, governance shows up in practical ways—like how you select contractors or manage supply chains. Without it, environmental and social goals are just wishful thinking. Good governance gives structure and credibility, ensuring that commitments to sustainability aren’t just a branding stunt but translate into real outcomes. It’s what turns ambition into action, making sure projects deliver on their promises.
In what ways does strong governance drive innovation within the industry?
Governance might not sound flashy, but it’s a powerhouse for innovation. It creates a framework where new ideas—like using engineered timber or adopting circular economy principles—can be tested and scaled responsibly. It ensures that innovations align with sustainability goals and regulatory demands while managing risks. For example, governance can push companies to invest in energy-efficient technologies by tying funding or approvals to clear ESG criteria. It’s the bridge between a cool idea and a practical, impactful solution that reshapes how we build.
Can you walk us through what retrofit means and why it’s a game-changer for reaching net-zero goals?
Retrofit is the process of upgrading existing buildings to boost their energy performance, often through better insulation, modern heating systems, or renewable energy integration. It’s a game-changer because the UK has some of the oldest, least efficient housing stock in Europe. Improving these buildings cuts emissions significantly and extends their lifespan. To hit net-zero by 2050, mass retrofitting isn’t optional—it’s essential. New builds alone won’t get us there; we have to tackle the carbon footprint of what’s already standing, and retrofit is the most direct way to do that.
How does governance play a role in ensuring retrofit projects succeed from start to finish?
Governance is critical in retrofit because these projects are complex, involving multiple stakeholders, from contractors to funding bodies. It sets the rules for how decisions are made, ensuring transparency at every step—like during energy assessments or performance evaluations. Standards like PAS 2035 in the UK embed governance into the process, holding everyone accountable for delivering high-quality upgrades. It prevents shortcuts that could undermine energy efficiency or safety, and it guarantees that carbon reduction targets aren’t just claims but measurable improvements. Basically, governance keeps the whole operation on track.
What are some of the biggest challenges in retrofit projects, and how can governance help overcome them?
Retrofit faces a slew of challenges—skills shortages, inconsistent standards, fragmented supply chains, and the gap between design promises and real-world performance. Governance helps by creating a clear framework to address these issues. For instance, it can enforce training requirements to tackle skill gaps or standardize quality checks to ensure consistency. It also embeds accountability across the supply chain, so no one can cut corners. By providing structure, governance turns these hurdles into manageable problems, ensuring retrofit delivers lasting environmental benefits.
How can governance align a company’s sustainability targets with its broader business objectives?
Governance acts as a roadmap for integrating sustainability into a company’s core strategy. It ensures that decisions—like choosing materials or partners—reflect both ESG goals and financial priorities. For example, governance frameworks can tie executive incentives to carbon reduction targets, making sustainability a business imperative, not an afterthought. It also builds trust with investors and clients by showing that green commitments are backed by transparent processes. When done right, governance makes sustainability a driver of profitability, not a cost, aligning purpose with performance.
What’s your forecast for the future of governance and retrofit in pushing the construction industry toward net-zero?
I’m optimistic but realistic. Governance will become non-negotiable as regulations tighten and investor expectations grow— it’ll be the foundation for every major project. We’ll see more standardized frameworks, especially in retrofit, to ensure consistency and accountability. Retrofit itself will scale up massively; I expect mass programs to become a policy priority as 2050 looms closer. Technology will play a bigger role too—think digital tools for tracking energy performance tied directly to governance systems. The challenge will be execution—getting the skills and funding in place. But with strong governance, the industry can lead the charge toward a truly sustainable built environment.
