Climate change and the project life cycle

Tony Marshall, co-founder of 2MPy business consultancy, considers why - throughout the life of a project - commercial models need to incentivise improved outcomes for planet and society.

The UN’s annual conference on climate change, COP, has been interesting to follow this month not least the way its evolution has been reflected in the infrastructure sector. For 30 years I’ve followed the sector’s growing relationship with, and understanding of, the environment and climate change.

I’ve seen designs intended to be ‘sympathetic to the environment’ move from innovative landscape design projects of the 1980s, through to all-encompassing, impact assessment and mitigation.

More recently, we have seen the mandating of sustainability parameters within contracts and project methodologies. Often incorporating performance KPIs, these are also being developed to focus on the broader outcomes required for society and a healthy planet.

The desire to promote design solutions which improve ways of life - whilst protecting our planet - has become second nature to many engineers. Sustainable performance measures in projects are no longer ‘nice to have’, or an ethical choice; increasingly they will be a contractual requirement.

Global teamwork?

Enjoying its 27th iteration recently, COP was a melting pot of global nations, political allegiances, and big industry hitters and it has steadily grown over the years, with the last five events reported to have attracted an average of 22,000 participants. Compare this with the 5,000 delegates when the conference first came together in 1995 (Carbonbrief.org).  Hopefully this growth is dominated by those in a position to influence and drive change as opposed to an “Expo” driven growth.

Whilst its continued existence is evidence of strategic intent for improvements, the implementation of practical measures - through governments and flowing into industry - isn’t so evident.

Initiatives such as FIDIC’s new partnership with the World Wildlife Federation (WWF) will pave the way for new learnings and new practical measures, the output of which will be a best-practice playbook considering nature and diversity. But how common place are these new ideas and who is best suited to create them?

Forward thinking designers can feel restrained within the contracts they are working under but there are instances where the vision and behaviours of a project team – not the original project scope itself – provides the driving force for new ideas and a positive, outcomes-based project.

Something which addresses social value, health, economics and diversity alongside measurement of carbon and other environmental impacts.

The responsibility for protecting the climate does not lie solely with engineers or those in the built environment. Sustainability advocate Greta Thunberg is vocal about change playing an important role raising awareness of key climate issues across a diverse demographic. Throughout COP, UNICEF shared many powerful and hard-hitting warnings through its Youth Advocates.

Andrew Winston is one observer who points to this younger generation as big influencers for societal change, advising businesses to “….flush out old thinking by inviting younger people into the room... to find solutions that enhance people, planet and profit”.  Continuing, he believes younger people “are logically much more concerned about what a changing climate would look like over the next half century...”.

Writing new rules

Businesses are increasingly addressing environmental and sustainability considerations as part of their governance, removing silos to do so and considering a global picture, not just localised strategy.

Policy makers, regulators and industry associations have long seen the need for sustainability obligations and internationally FIDIC, has for some time, aimed to provide its member with contracts which enable them to construct projects which are “quality driven, sustainable and able to stand the test of time”.

From a legal standpoint, the Chancery Lane Project’s global initiatives include drafting examples and model climate clauses for commercial contracts, and efforts from organisations such as Lawyers for Net Zero are making real strides; influencing the legal community to join the call to action.

Once desired outcomes are clearly defined, there should be continued focus on them. From project inception and legacy planning to design development, project delivery and through to asset management regimes.

The move in this direction is not particularly new; multilateral development banks have placed emphasis on project outcomes for many years. For example, the Asian Development Bank is known for its results-based, financing framework. One benefit of this approach is that it can demonstrate impact and success against the framework of the United Nation’s Sustainable Development Goals, a common frame of reference for many sectors.

But greater traction is needed for contract models such as these to secure a stronger footing in industry. We need to see innovation and good ideas further incentivised, more thought given to alignment with ESG policy and successes celebrated and shared more widely. Only at this point will we see a project life cycle which has climate care at its core.

Tony Marshall is a Partner of 2MPy and Fellow of both the Institution of Civil Engineers and the Chartered Institute of Highways & Transportation in the UK.

Tony plays an active role in the global infrastructure community and acts as Strategic Advisor to the Board of the International Road Federation.