In our interconnected world there is growing evidence that integrating sustainability adds value to both day-to-day operation and long-term strategies. And sustainability criteria are increasingly becoming a requirement of project developers and investors. It’s irrelevant whether it’s the sustainability strategy that increases profits, or strong businesses that tend to act sustainably – the outcomes are the same. Sustainability is a good proxy for strong and profitable business, now and in the long term.
So it is not surprising that organisations such as the United Nations and the European Bank for Reconstruction and Development put great emphasis on applying sustainability principles to investments. Other organisations, such as Global Infrastructure Basel and the Sustainable Infrastructure Foundation, are developing standards and tools that help to assess the sustainability values of infrastructure investments.
These standards and tools are welcomed by international investors and project developers as they help to bridge the ‘bankability gap’ in funding for infrastructure projects.
Much has been said about how to solve the funding gap in the delivery of infrastructure projects in both developed economies and the emerging markets. But the growing shortfall is not due to a lack of capital; what is missing is the confidence that new projects will be delivered on time and that promised returns on investment will be paid. This bankability gap is one of the key challenges preventing the delivery of the infrastructure projects needed to match projected world growth.
Sustainability provides the confidence needed to bridge the bankability gap for a number of reasons:
• A more interconnected world requires increased transparency in project development.
• New standards and tools are highlighting business cases which show the link between sustainability and strong business.
• Institutional investors are increasingly looking at sustainability indicators in investment opportunities.
• Project developers increasingly understand the advantages of sustainable infrastructure.