Climate-smart systems and communities

Systems approach took off

Spurred on by increasingly frequent and extreme weather events, governments across the world have converted climate pledges into action, developing policy and passing legislation to reduce carbon emissions to net-zero, and to strengthen the resilience of their economies and societies.

Recognising the interdependency between our infrastructure and nature, systems awareness and systems-based solutions rapidly took root in government thinking and investment, with a view to minimising exposure to all forms of risk – but with climate risks front-of-mind. Governments positioned themselves as ‘systems integrators’, taking on a co-ordinating role for the key systems underpinning society.

Cross-sector taskforces were established to share data on climate risks, understand linkages between different human and natural systems, and take collaborative action to cut carbon and build resilience. Infrastructure owners embraced their role in the system of systems, and resolved to forge new partnerships, facilitate flows of information and collaboratively reduce system-wide vulnerabilities.

Industry and education providers work together to develop the skills and technology needed to achieve an integrated systems approach to risk management. And local authorities have been given the power to act as systems integrators at regional, city-wide or local level.

Development agencies use a systems approach in their work with low-income countries. Funding is now directed towards achieving holistic and lasting social, environmental and economic outcomes that are net-zero and climate-resilient.

New decision-making criteria

Throughout the 2020s, the scientific community further improved its modelling of likely and plausible changes to the climate. The models were used by governments and decision-makers throughout the global economy to guide their actions to cut carbon and develop resilience.

From infrastructure operators to international development agencies, organisations worked with their stakeholders to pursue pathways that are equitable and sustainable. Decision-making has been devolved, with local stakeholders and local government empowered to find solutions that are acceptable and beneficial for their communities.

Resilience prioritised

The most significant system-wide vulnerabilities provided a compelling case for action, and were addressed first through ‘no-regrets’ projects, protecting services that could not be allowed to fail. Subsequent projects have been prioritised to achieve the biggest net benefits for society, environment and economy.

Projects that aren’t inherently resilient and that are counterproductive to wider system resilience don’t go ahead. All resilience plans are ‘adaptive’, meaning they can be implemented in phases, depending on the evolution of climate change and its impacts locally.

Systemic carbon reduction and resilience have become core considerations in all major investment decisions. This has been achieved through encouragement, financial incentivisation by investors and insurers, growing evidence of the social, environmental and economic benefits, and through regulation where required.

Data unlocked smarter approaches

Digital representations of physical assets and systems – digital twins – became more and more important in the 2020s for understanding carbon emissions and vulnerability to the physical impacts of climate change.

Infrastructure owners, municipal authorities and the financial industry, used them to enhance asset management and plan adaptations. Emergency services and citizens’ groups used them to rehearse strategies for dealing with extreme weather events.

All energy, water and transport assets are fitted with internet of things (IoT) technology as standard, providing information about their performance, condition and status in real time. Natural systems such as rivers are monitored too. The data is shared and used by infrastructure owners and operators, city and other local authorities, emergency services and a diverse range of other stakeholders, including civil society organisations.

This data provides early warning of impending emergencies, enabling swift mitigating action to be taken. On the other, it shows long-term climate trends and their physical impacts, enabling adaptive pathways to be plotted, and possible emergency scenarios to be rehearsed.

Projects and interventions planned with the benefit of ever better data have been virtually tested for their effect on system-wide sustainability and resilience, and their interactions with existing infrastructure explored. Digital modelling has provided new ways of communicating with everyone from community groups to fire fighters, insurers and maintenance contractors, helping them to understand project objectives, constraints, impacts and opportunities – and enabling them all to suggest improvements and modifications.

Data feeds increasingly sophisticated and cross-connected digital twins that represent physical assets and systems. Governments have led national initiatives to share data and connect twins. Open, flexible digital platforms and rising data abundance enable governments and agencies to solve whole system challenges in developed and lower-income countries alike. This includes making decisions about where, when and how to encourage economic growth in a way that improves living standards, health and equality for all citizens.

Inspiring change: For practical climate resilience decisions, think digital

Project delivery: Global Future Cities Programme, Bangkok

Asset managers embedded change

Climate-smart development became a fundamental objective for asset managers, who have worked to reduce carbon emissions from existing infrastructure, and to improve its resilience.

Every new project – whether to deliver a new asset or upgrade an existing one – is treated as an opportunity to improve resilience. There is an ongoing programme of net-zero and resilience retrofit projects to extend the life and environmental performance of assets, strengthening the systems they’re part of. Where construction is needed, assets are designed to be net-zero, with carbon sequestration offsetting any capital or operational emissions.

Asset managers have been pivotal in assessing the levels of investment required to achieve both net-zero and resilience. They have sequenced decarbonisation and adaptation activities to mesh with asset maintenance, enhancement and renewal cycles; shaped adaptation plans to enable resilience to be built progressively; and calculated return on investment.

For decarbonisation, this has involved determining where modification or replacement is the more cost-effective option. For resilience, asset managers have assessed the probability and severity of different climate events; they know what assets and operations can be cost-effectively recovered and what residual losses must be accepted.

Collaboration and skills

Inter-organisation collaboration and information sharing has been taken to a new level, addressing cross-sector risks and dependencies. Supply chains are stress-tested for their response to problems, with climate change used in these tests as a risk multiplier. Companies with suppliers in poorer and more vulnerable countries see the economic sense in working in partnership to strengthen supply chain resilience.

Organisations have nurtured the right skills and capabilities to become more sustainable and resilient. Universities teach climate-smart development as a key subject in all engineering, built environment and environmental management courses. In all infrastructure owner and operator organisations, staff have become climate-aware: emergency response plans are communicated and rehearsed regularly.

Balance between systems

Better understanding of system interdependency has led to a collaborative relationship between infrastructure owners, municipal authorities and custodians of the natural environment – land owners and farmers.

One of the most effective ways to mitigate flood risk and protect water quality is to engage with, and pay, land managers for the ecosystem services they provide. These include agricultural practices that hold back flood waters in the catchment and store water underground, for use in dry periods. Carbon sequestration, both publicly and privately funded, has become an important ecosystem service in its own right, with tree-growing and soil enhancement projects sited to enhance water management. Policies have been implemented, with appropriate incentives and penalties, to ensure that all businesses play their part in reducing and sequestering carbon.

More emphasis has been placed on the resilience of food supply chains and food businesses are now willing to pay for food that is produced sustainably and regenerates the natural environment. A new social contract has been developing between urban and rural areas, with ecosystem services and carbon sequestration providing as significant an income for farmers as food production.

Project delivery: Water for Growth Rwanda

Our tools: New GIS tool to support decision making in catchment restoration

Climate-smart investment

The financial industry demanded that the organisations they invest in, lend to and insure minimise their exposure to climate risks. Mechanisms developed by the Coalition for Climate-Resilient Investment (CCRI) were adopted by a critical mass of the world financial community, aiding the prioritisation of national resilience infrastructure and enabling the creation of ‘resilience bonds’ to support private investment.

Investors now focus on long-term financial performance, driving capital towards sustainable solutions.

Pooled funding, including public-private finance, has become a feature of international development projects. Donors now routinely align their funding to achieve more collectively than they can individually. This approach has given rise to exemplar projects using regenerative development in small island nations that are vulnerable to sea level rise and tropical storms.

Increasingly, donors partner with governments to fund projects that make communities more resilient to the physical impacts of climate change. In doing so, they attract significant private sector investment.

Through the 2020s companies were increasingly called on to demonstrate both sustainability and resilience in their financial reporting. By the 2030s this was a requirement in all developed economies.

Focus on social outcomes

Policy and decision makers have gradually come round to the idea that economic growth is no longer the be-all and end-all. Social outcomes, such as people’s wellbeing and the resilience and inclusivity of society, receive equal weighting, alongside environmental outcomes, and are placed at the heart of the infrastructure lifecycle.

When projects and interventions are considered, it is no longer the case that decisions are driven solely by economics; rather, social, economic and environmental outcomes are assessed in the round.

All projects start with consideration of the desired outcomes – with the whole of society considered. In line with the UN’s Sustainable Development Goals – which have been pursued successfully - there is a commitment to ‘leave no-one behind’. This approach informs the development of options and the evaluation of project success. Climate change is recognised as a fundamental influence on social outcomes – with the transition of all spheres of economic activity creating opportunities for reskilling and new employment. Resilience is especially important for the least advantaged in society, and for those displaced by climate trends. The linkage heightens the importance of achieving climate-smart development in all categories of project.

Education teaches the young about the importance of climate resilience and climate systems, and reinforces the shift that has taken place towards environment and social value. Attitudes have changed over the years to favour responsible consumption. Communities place more value on their local environment and take steps to protect it.

Our tools: Moata people and planet