Leading from the Bottom Up

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Environmental Brief

From the top to the bottom of organisations we have a responsibility to get environmental and sustainability messages across to our colleagues.

One of the toughest environmental jobs to often get your voice heard is on building sites. Establishing presence, getting your voice heard and your messages across takes good communication & leadership skills.

Environmental management is more than just policies, regulations and legal compliance – its integral to good business and efficient working sites. Experienced officers understand that building a good working relationship with the rest of the team raises their profile, develops trust and allows opportunities to ratchet up performance.

When you perceive others leading because it is in their nature do so or they feel a vocational interest in the matter, then it is a leader’s job to encourage them in their work and efforts.

My thanks then to some South African colleagues who sent this through as a small example in the large lexicon of building site humour! (see picture above)

(previously posted as a Linked in article by Leading Green, May 2018)

Making the Business Case for Sustainability: Obtaining Top Management Support

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Leading Green is delighted to announce a new Sustainability in Action leadership course for Environmental Management, EHS and Sustainability professionals.

Obtaining Top Management Support (a new 1 day course)

22 – 25 January 2019

Getting across the board buy-in for sustainability in organisations can be difficult.  Progressing strategic actions that create visibility for and awareness of sustainability, both inside and outside the organisation will require top management support.  When seeking to change an organisation’s sustainability culture, their support – which must also require their participation and involvement, may be the most important success factor before you start!

Top management support is the critical success factor when progressing a business sustainability agenda.

This one day course sets out a strategic pathway that aims to supports you

  • self-assess the degree to which a sustainability framework is embedded across  your organization, helping you understand your company’s progress, and
    where to prioritize your efforts (1/2 day).
  • The second half of the day sets out a toolbox of tips and tactics to help win support, participation and involvement from the CEO and senior leadership team,to identify opportunities to support your CEO’s journeys to embed sustainability, and to increase the visibility of for sustainability initiatives within your organisation.

The course focuses on your day-to-day activities and your organisations direction of travel.  It follows an established pathway, used successfully within several Business Schools and international organisations.  The course’s objective is to help you personally:

  • Advance your organisation further along the path from environmental management/EHS to sustainability
  • Self assess progress year on year
  • Introduce your sustainability agenda to senior management
  • Increased your corporate visibility
  • Align Sustainability with the Corporate Plan, and
  • Demonstrate value and win support.

The Courses will be held during the 22nd – 25th January 2019 in Birmingham (2 days); Sheffield (1 day) and Lincoln (1 day).

This 1 day course is designed to align with IEMA’s CPD requirements for environmental professionals, with elements of the course corresponding to requirements within IEMA’s Sustainability Skills Map.

For further information, delegate rates and details contact:  Ross Marshall at info@leading-green.com or view the Training page.

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Supporting Business Leaders implement Sustainability in Business

Ross Marshall has over 25 years experience of senior level Corporate Environmental Management & operational Sustainability within the Power, Water & Government Sectors.  He is involved in the accreditation of environmental professionals for IEMA.

At Leading Green, our approach to sustainability in business training & consulting encourages our clients to look closely at their own internal leadership strengths. Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.

 

 

 

 

 

 

 

 

 

7 Ways to demonstrate Leadership in EIA

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In May 2018, Leading Green held the first of a series of international workshops to discuss Leadership in EIA.  This initial session attended by a series of influential and internationally recognised EIA and SEA practitioners and academics from the UK, South Africa, The Netherlands, Sweden and Estonia, has subsequently become known as the ‘warthog session’ due to the presence of these beasts running under the picnic tables where the session was being held outdoors in Mpila Camp within Hluhluwe iMfolozi Game Reserve in KwaZulu-Natal.

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The initial session, now supplemented by qualitative data from other sessions sought to identify the areas where EIA practitioners could exert the greatest influence on projects, and where their contribution had the greatest impact on the sustainability and residual impact of the future development.  The following 7 areas have subsequently emerged as the focus areas of experienced EIA leaders and what they perceive as the areas of greatest added value to the client and wider engineering/project management team.

1.   Influential in promoting environmentally inclusive design

Regarded as the No.1 contribution repeatedly within these sessions, the promotion of inclusive environment design seeks to raise awareness of, and to emphasis the benefits of, to the project’s decision makers about the importance of designing infrastructure or large development project  that seek to meet the needs of the people and the environments that they inhabit.  A belief that many held central if we are to create a fair society and have any chance of a sustainable future.

“Designing developments to fit their receiving environments, rather than retrofitting environments to take development”

The crucial EIA leadership skills to these are: internal and external stakeholder consultation, influencing skills, visioning, ecosystem service analysis, with a technical understanding of engineering design and investment risk benefit analysis.

2.  Embedding sustainability /Environmental/Social Impact thinking into the project team’s decision-making

By acting early to exert influence within the project’s leadership group, it is clear that many experienced EIA practitioners seek to enable all members to participate in and solve the likely impacts of development, and offer up their insights into ‘How’ the project will interact with the receiving environment.  They recognise the important role that engineering forms as an interface between the design (i.e., the idea how to provide a  solution to a technical problem) and implementation of a sustainable option that forms an optimal solution to all members of the team and their respective interests.

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Promoting Sustainability Approaches in Engineering

  • Helps the team considers the whole ‘system’ in which the development will operate, rather than just considering the object (ie road) or process (oil refinery);
  • Places on the project table options that consider both technical and non-technical issues synergistically, as opposed to just on technical issues;
  • Raises awareness of how the development could address wider sustainability issues or problems (globally and locally) rather than solving the immediate problem (flood risk);
  • Considers the local ecosystem services and community context, as opposed to just addressing the engineering context (i.e. crossing a river);
  • Instills within the decision-making team an acknowledgement that they have a responsibility and accountability to address/implement more sustainable solutions, rather than assuming it is the role of the client or regulators

The crucial EIA leadership skills is through communication approaches based upon a sound sustainability mindset that allowed them to creates new opportunities, to deploy creative (visioning) and problem solving skills within the project leadership team as a proactive as opposed to reactive approach early within the team’s establishment, as well as dealing with challenge.

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3  Holds courageous conversations when EIA elements are impacted on

Ultimately the purpose of EIA is to bring to the decision-maker attention issues of environmental or social significance attached to the proposed development if consented.  In most models of global EIA this statutory responsibility lies with the consenting or approving regulator.  Experienced EIA professionals fully recognise that if these facts are left to such a late end point, the process is valueless.  Instead they seek to raise the issue as early as possible and to often place them in terms of opportunity to avoid, reduce or remediate the impact or its ‘show stopper’ potential.

As has been stated in an earlier blog.  The EIA budget is often a small element of the entire budget – <0.25% during financing and <4% during construction delivery, yet its contribution is ultimately critical to success:

  • No statutory approval – No Project!
  • If the project is pushed through by governments for political reasons, the objection of its citizenry and the verification of adverse environmental impact can still terminate the project on appeal.
  • Even when they are pushed through regardless, the life and efficacy of the asset can ultimately be compromised – e.g. siltation behind dams, reducing energy production, secondary impacts to other national industries and interests, reductions in agricultural productivity, etc can all mitigate against the ROI.
  • Too Climate change adverse – Future stranded asset!

It can be difficult for individuals working closely in a project team environment to go against the ‘group think’ mindset, as no one wants to be the bearer of bad news, or risk project success.  Project groups are also adverse to hearing news that threatens the agreed design that has been proposed and costed for the client, or the introduction of potential time delays, risks or added stakeholder objections.   The EIA leadership professionals talked openly about how they often had to raise and lead on difficult project centred conversations on issues that impacted on wider social, environmental or sustainability issues.  Issues that on occasion other project team members did not wish to consider or raise up to the client.  They knew that they needed to have it, that what they had to say need to be said, and they knew that they were taking a risk at times in their relationship with other senior project team members we.  In mitigation they sought to use emotional intelligence and situational awareness to prepare, assess and gauge what the reactions might be and how these conversations could end.

The crucial EIA leadership skill was communication, in particular being assertive in their message, ensuring that they were focused (ie clear on what they were trying to achieve) by holding the conversation, and what gave them the leadership right to initiate the conversation.  These required preliminary preparation, making sure that their information was accurate and backed up by fact.  They are prepared to discuss the “undiscussable” or ‘disloyal’ but also clear about how the issue effected them personally, the work that they were responsible for delivering and how the issue if unaddressed would impact ultimately on.   Many were fully aware of the Emotional Intelligence skills that were needed to manage relationship conflict and used these accordingly – they were raising the issue because they couldn’t deal with the problem alone, it needed a group approach, the issue was too big for it to be ‘parked’ and left.  They also understood the emotional reactions that such a conversations could result in and tried to prepare accordingly to handle the expected push back, challenge and alternate perspectives..

4.  They ensure that the voices of the EIA team are heard

In addition to often managing the EIA team and ensuring the agreed deliverables outlined in contracts, many are pro-active in ensuring that the team is well-integrated into the project team’s other disciplines.  This often undertaking a systems based approach to the anticipated environmental and social impacts and aligning them with particular disciplines and arranging for the EIA and the respective engineering / design / procurement specialists worked together on the issue to resolve matters.

They also acted as a ‘direct voice’ into the senior project team to ensure that issues were raised and addressed (see above).  They all clearly understood the linkage between leadership and leading a team, as opposed to managing the EIA process often practising strong negotiation, assertiveness and problem solving skills.

5.  Safeguarding stakeholder interests

Stakeholder consultation in EIA is often regarded as a time-consuming ‘cost’ in infrastructure development, with pressure placed on EIA project managers to limit activity to a minimum.  Its value was fully appreciated by many of the experienced client-employed or consultant EIA leaders as a valuable risk management tool and essential in addressing and avoiding potential risks early in the design process.  Utilised as a design tool as well as a statutory obligation it was deemed cost beneficial to the project by reducing delay, re-design, loss of stakeholder confidence.

Most considered in some form an external  stakeholder management or consultation strategy to increase the support and minimize the negative impacts of these community, environmental or governmental stakeholders.  A successful stakeholder management or consultation strategy when carefully planned and followed accordingly was strongly believed to identify issues early, address concerns through transparent action by the design team, raise confidence in the projects communications and build stronger working relationships with external parties.  Anticipating issues in advance of the proposed design allowed for adaptive management, mitigation, access to critical views and information available locally and allowed discussion regarding trade offs.

Few however had considered the benefits of developing an internally focussed stakeholder strategy aimed at the client organisation, seeking to directly consult  with the Client Organisation’s Sustainability Manager, CSR or Environmental Director seeking to bring:

  • their input & influence into projects, or
  • or to understand the dynamics within the client organisation’s CSR goals or SDG objectives?

This was surprising as 80% of Project Managers know how their projects align with the company’s business strategy, and is a valuable tool in bringing influence for sustainability, social and environmental policies to the Project table.

The crucial EIA leadership skills often demonstrated revolved around stakeholder management, strategic thinking, communication, and engagement skills

6   Leads thinking regarding operational and decommissioning phases

It can be a risk in project engineering teams that they focus solely on the design and construct phase of a development.  Forgetting or lacking a design brief to consider the operational  and eventual decommissioning phases.

Life cycle analysis is an important component in EIA philosophy and implementation and EIA practitioners often take a systems based approach to considering the wider changes in environmental and social interactions during subsequent downstream phases.  These often include but are not limited to:

  • Utilities.  The material costs of Water, Electric, Natural Gas, etc, and their subsequent efficiency or contribution in respect of the developments carbon footprint and contribution to climate change.
  • Future Operational parameters including maintenance needs, repair and retrofit design accessibility.
  • The environmental and social impacts of eventual demolition or asset disposal, notably in respect of sustainability and the risk of ‘stranded assets’.
  • Pollution remediation systems and their resilience in respect of future statutory developments, energy policy and environmental risk.

The environmental professionals were aware that the Operational phases of a development can be up to 3x the cost of construction, with management costs equating to 60-80% of a development’s life-cycle costs.  Having such a profound impact on a developments financial outlay and environmental life-cycle, many recognised that it was important that operational and environmental management considerations were discussed by the project team during the design phase and before construction designs became fixed.  Increasingly they felt responsibility for leading project group discussions on ways the team could optimize the life-cycle of developments.

Core skills demonstrated and flagged up as essential for success were a sustainability mindset, visioning, appreciative inquiry, facilitation skills and systems thinking.

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7  EIA information influences PM decision-making

Building a strong working relationship with the Project’s Leading project manager was identified by many as an important leadership skill.  It was accepted that the EIA project manager often had a more holistic and wider worldview of how the project integrated within society, communities and their environments.  EIA project managers often worked across a variety of projects during their careers often being intimately involved with a Project Manager who could spend several years overseeing the design and construct of a development project.  This exposed them to a wider range of project scenarios within specific sectors and adaptive approaches.

This made them adapt at spotting potential pitfalls early in the design phases of projects and mentally mapping geo-environmental, social and natural environmental impacts as potential constraints.  However, the skill seemed to lie in:

  • presenting these issues or problems in terms of ‘solutions’ to project managers.
  • identifying non-technological or low tech solutions rather than relying on increased engineering or higher construction costs, whilst recognising their own engineering limits
  • Helping project managers thinking through short-term and long-term impacts
  • Presenting scenarios and the decisions that they would have to make offline and outside the pressure of project review meetings
  • Mentally mapping statutory delay and presenting it is a structured form for reflection and consideration, clearly highlighting the timeframes, gateways or decision nodes which decisions had to be made in respect of adverse social and environmental impacts
  • Alerting the project manager to significant enviro-social impact findings early (supported by sufficient data for verification) and the pro-actively identifying the next possible steps.
  • Help in selecting ‘optimal’ (solves many problems) as opposed to an optimum solution in terms of buildability, cost and even environmentally preferred.

The key leadership skills identified as important were creating positive relationships, building influence, holding leadership conversations, and problem solving.

Conclusion

Remember, that for any EIA scenario you encounter there are always multiple perspectives to the issue, so be empathetic of how other professions and project managers will view the problem.  A key influencing skill is to retain an open and unbiased curiosity about how they see the situation and be aware of how your own worldview with its associated judgments and prejudice may impact on what you observe and how you act.  One of the great strengths of a mature project management team is the diversity of experience, and the different perspective that exist within it.  When seeking to drive greater sustainability in design, better stakeholder relationships, risk adaptation and overall project vision, it is clearly advantageous to appreciate personal and professional decision-making through the eyes of fellow team members, allowing you to take a more focused, strategic and informed decision-making approach to issues of note to the EIA and sustainability agendas.

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Leading Green offer a bespoke series of Leadership in EIA & SEA talks and training courses. Courses that address specific CPD leadership and team development issues. They incorporate the sustainability practitioner goals of the UK’s Institute of Environmental Management & Assessment (IEMA), and the International Association for Impact Assessment (IAIA). Contact us at http://www.leading-green.com or email ross@leading-green.com to discuss your particular needs.

 

 

 

 

 

 

Brainstorming with a Property Developer CEO over Energy Efficiency

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About 60% of total energy efficiency investment lies within the property and building construction sector, yet on occasion it seems that 75% of the resistance to building in energy efficiency into new development lies within the C-suite of such companies. This is a hard, pragmatic sector to operate in and risk aversion can be a necessary survival trait as the market fluctuates.

Having grown up around family run property development and estate agency owners  I had been a useful addition to site construction crews on projects as a teenager and subsequently regarded as the black sheep of the family for becoming a corporate environmental manager.  My description of myself as a ‘green businessman’ cut very little ice in their commercial eyes.  Only when I had honed my skills on guiding large infrastructure development through planning systems within the UK power, renewables and water sector did they become interested.  I was now a useful source of advice on EIA, legislation, planning laws and explaining to them why floodplains, ancient woodlands and habitats were being actively protected by communities from their next money-making scheme.

So, this mentoring meeting on sustainability in business with the CEO of a sizeable house building company was following a predictable route.  He was interested in what I had to say, but wary of what I was saying.  His organisation with many others were being bombarded with the ‘sustainability’ message, but few commentators had helped him  drawing linkage to what it meant for him personally and for those actively leading organisations now at the forefront of climate change adaptation hopes.  He was intelligent and strategically far-sighted to understand that the way they operated now had to change, but needed help and more rational reasons to actively jump onto the sustainability wagon.

We agreed that as a ground rule sustainability initiatives had to either add +£1 to the operational profits or save £1 expended in risk.  The core strategy had whatever to add a minimum of +£1 to his balance sheet.

So, we sat down and brainstormed!

First, we addressed the direct benefits of energy efficiency regarding climate change so that we could park that issue first and go on to explore other potential benefits of energy efficiency. We agreed that the building & property development sectors has an important role to play via aggressive efficiency improvements within new build (and existing) as a contributor to limiting the pace of global warming.  As evidence to this we referenced a recent International Energy Agency’s (IEA) market outlook on energy efficiency that claimed that a concerted drive in energy efficiency policies could assist the world in achieving ca 40% of the emission reductions needed without requiring new technology.

We discussed the options open to his company to improve energy efficiency design. There was a lot they could do but the blockage in his mind was just how they could boost financial returns, as any benefit advantage to the buyer was dependent on increased borrowing costs, energy-efficient material costs and added construction time costs to his organisation. These added costs would have to be passed on to the buyer at the detriment of a higher purchase price.  He recognised that the buyer could eventually recover those added costs in lower energy bills, but in risk terms the marketplace still revolved around ‘location, location, location, and mortgage cost.  The only clearly marketable attribute was the attractiveness of a ‘green’ home to his target market – relatively successful, dual income, young and mid-life professionals.  An advantage yes, but unquantifiable in the sellers marketplace or when seeking added capital for a scheme.  Little progress here towards his +£1!

I then turned the discussion over to the evaluation of alternative and more sustainably innovative options to identify added value finance and business model benefits based on added energy efficiency.

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Asked if he ever took the alignment of new property’s into account, the answer was ‘No! the priority was housing density and profit return on a site!’.  So we discussed placement for solar efficiency with housing density + return.  Exploring an idea where a development was maximised for the fitting a mass photovoltaic scheme in its design as the site was constructed.  The factory unit or property houses benefitting from the scheme, but ownership of the asset remained with the development company for an initial period before transferring over.  How did he feel about his organisation branching out and becoming an ‘energy company’ exporting into the local grid?  Monetising the potential energy benefit as part of the development return had attraction he agreed:

  • It could reduce the risk profile – for even if the buildings were empty, they still produced capital returns post construction.
  • A house build-carbon reduction-renewables scheme could appeal more to the third-party financier marketplace in the future.
  • Such a scheme could have a predictable return on investment, and the cost in solar installation was still reducing in price.
  • The energy units were reproducible on a scale that potentially made the added installation costs attractive.
  • there was still the option of possible energy efficiency grants.
  • The concept could help in demonstrating lower cost starter homes, and
  • It had a marketable factor for those seeking a mortgage and concerned about rising externalities.

The non-energy benefits (NEBs) of energy-efficient buildings.

It was becoming clear from our session that householder or tenant energy cost savings were not always enough to drive sustainability strategies into the property market.  A robust business case and ROI argument needs to consider additional factors in assigning that +£1 to the developer.

I raised the concept of ‘stranded assets’ as the organisation had a property letting arm within its business portfolio.  What was the risk of these properties decreasing in value or becoming stranded if energy efficiency standards dramatically rose in the future?  The scenario we discussed was a significant shift in Government policy in response to the +1.5oC temperature target.  What would be the impact if this became a hard and fast target in government or global energy policy reaction?

  • Could such changes render ‘bought cheap and done up’ properties a future financial liability?
  • Would investors continue to lend real estate capital for properties they deemed at future risk of becoming stranded liabilities?
  • What strategic criteria should now define a ‘cheap’ property in terms of its energy efficiency or retrofit profile?

These were new questions he hadn’t considered before and needed to be considered as future risk scenario.

Moving on from the risk of stranded assets we agreed that the top non-energy benefit for his organisation would lie in increased asset value within their holding portfolio and within individual buildings within that portfolio.  One obvious advantage was the desirability to rent of individual properties as a reflection of energy efficiency.  Anything that increased the longevity of tenants or reduced the lapse time between losing one tenant and gaining another could have a significant NEB return we agreed.  A financial return that was much greater than the energy cost savings implemented into the fabric of that building originally, if a building remained empty for too long.

If a building provided tenants with a greener, more pleasant place to work/live and which also contributed to operational costs, its desirability and occupation periods enhanced during its life. Within the portfolio, we also agreed that such buildings would have a lower risk exposure to future regulatory energy efficiency challenge and the expense of retrofitting. Thus:

  • increased rentability,
  • lower gap periods and
  • reduced regulatory risks

attached to high performing energy-efficient commercial/residential properties were all NEBs that need to be considered within future business strategies he agreed.

The session had I hoped started to alter the perception of this CEO, over his strategic options and how sustainability could assist in safeguarding the business’s longevity.  It had also raised scenario that could go forward into the boardroom for further debate and consideration.  That was a satisfactory start, because sustainability in business is dependant on industry leaders feeling comfortable in taking the lead on sustainability initiatives in a pro-active manner rather than reacting negatively when the opportunity has passed or when new regulation demand change.

However, the wider strategic impression I was left with after our session was that energy efficiency and investment practices remain unaligned in the UK property marketplace. The buildings sector clearly has a significant role to play in offsetting future carbon releases and in mitigating future carbon use, yet the regulatory energy policy and investment routes remain confusing as to whether they can ultimately drive a +1.5oC climate change future or just contribute locally to energy efficiency.

The regulatory preference over the last decade has clearly been aimed at direct grants and subsidies for home owners.  Whilst successful in general, how much greater would have been its success if it had been aimed at achieving greater standardisation in energy efficiency within the new build developments over the last 10 years?  This may reflect political caution when dealing with the sector or that policymaking is still more comfortable with the small subsidy model as they are easier to administer and communicate out to society.  Yet there is clear evidence that when scaled up, energy efficiency schemes are easily replicable and just as easily scalable.  They also have a verifiable ROI, help offset the switch to a low-carbon economy, low carbon cities & their air quality, and can build employment capacity within the construction service marketplace.

Let us be braver in future as the potential monetary value and benefits of energy efficiency can be just as great to developers, financiers and government as the societal value of a households energy reduction savings!

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At Leading Green, our approach to sustainability in business consulting encourages our clients to look closely at their own internal leadership strengths.  Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.

 

Environmental Impact Assessment: Just another Project or a 1.5-aligned infrastructure strategic opportunity?

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The Future Challenge

Enormous amounts of upfront capital, rather than slow incremental investments, will be required within the next three decades if we are serious about delivering innovative infrastructure solutions and partnerships that limit climate change to 1.5C above pre-industrial levels.  An earlier and better integrated understanding of climate change risks and impacts should help trigger this transformation.  However climate change and impact assessment professionals in general are rarely used to support the early investment phases of projects and seldom work closely with investors to significantly influence the climate change outcomes of a bespoke project.  Perhaps now is the time for a change?

Accessing the necessary finance for the development and delivery of large infrastructure projects is increasingly being tied into climate change impact funding, wider ESG considerations and increasingly the requirement to demonstrate the sustainability of the proposed investment upfront.  However, whilst there is a growing understanding of physical climate change, environmental and social impact risk within the investment community in the ‘development’ phase and also within the engineering community during the ‘delivery’ phase, the role of the Environmental Impact Assessment (EIA) professional, and in particular specialists in climate change impact assessment (CCIA), should be becoming easier.  Yet there is often no strategic linkage in projects between what climate change conversations are influencing either community and the substance of those conversations in terms of funding impact.  Too often client communication, project management and procurement barriers halt the transfer of knowledge and break the continuity of professional advice.

Climate change is visibly starting to manifest itself in our lives through physical risks such as altered weather patterns, changes in rainfall intensities, coastal flooding through sea level rises, wildfires and drought.  The need to stabilise the global climate through collaboration between nations, and the activities on-going in human societies must soon start to deliver a pathway towards net-zero emissions as quickly as possible – globally by 2050 at the latest, if we are to stand any chance of addressing the issue and mitigating the risks.  The scale of the challenge means that there is very little time for investors, financiers, governments, client businesses and their infrastructure service teams to enact a radical shift in how critical infrastructure projects are brought through to delivery, and how climate risks are incorporated within the strategic decision steps necessary.

Large financing and pension investment institutions are already taking action as reflected within their reporting of climate risks, evaluation of portfolio exposure and in their consideration of impact assessment funding.  Insurers and the banking community are also being urged to adopt strategies that tie in scenario analysis within their business governance systems. Yet we still need greater debate of climate change risk and how it can be passed from funding concept into operational delivery.  This is where the EIA community has specialist knowledge and skills that can benefit both parties to a greater extent than at present.

Investment pressure and regulatory initiatives will undoubtably help place climate change considerations as an integrated component of any eventual capital release. No doubt making investor seekers aware of climate-related risks and how they are expected to present business cases that address and manage them will ultimately assist the longevity of their desired asset or development project.  How long it takes them to appreciate this as a ‘benefit’ is an interesting question!

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Yet with these changes happening slowly within the investment community, it is rare for the engineering project development team, and in particular the EIA/CCIA professionals to have been briefed on or be aware of what evaluation, commitment or agreement has previously been determined during financing talks, or what are commitments funders seek to implement within the terms of their own policies or agreements.  Both engineering and environmental teams often start from ‘scratch’ and whilst committed to project delivery may have different views on how that final outcome sits within the clients needs, the local environment, its legacy impact on that environment and its contribution to the client’s corporate sustainability policy or a 1.5-aligned climate change scenario.

This lack of information and awareness of the entire funding and delivery cycle wastes time, leads to unnecessary conflict, delay construction, consents and permits, and ultimate delay delivery time schedules.  The cost of obtaining upfront capital can be enormous – in some mega-projects it can cost the investment seeking government or private sector $billions, and yet the acquisition of detailed environmental information is often left to a distant point downstream.

It is acknowledged by many EIA professionals that when they are called into the financing and design debate. it is often too late to make a larger positive contribution – opportunities have been missed and the design process has become fixed on a solution that may be optimal to build but is not necessarily optimal in terms of its operational/construction carbon footprint, risk reduction and importantly deliverability through the consent and permitting process.  Indeed whilst vast sums are spent upstream during financing a project, money for environmental (and social) evaluation is often begrudgingly allocated into the delivery budget.

Budgeting for Climate Change advice

The EIA budget is often a small element of the entire budget – <0.25% during financing and <4% during construction delivery, yet its contribution is ultimately critical to success:

  • No statutory approval – No Project!
  • If the project is pushed through by governments for political reasons, the objection of its citizenry and the verification of adverse environmental impact can still terminate the project.
  • Even when they are pushed through regardless, the life and efficacy of the asset can ultimately be compromised – e.g. siltation behind dams reducing energy production, secondary impacts to other national industries and interests, reductions in agricultural productivity, etc can all mitigate against the ROI.
  • Too Climate change adverse – Future stranded asset!

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It makes sense therefore, that if we are serious about climate change risks to future well-being, and now accept that vast amounts of early upfront capital, rather than incremental investment, will be needed within the next 30 years to bring forward innovative solutions that help limit climate change to 1.5C, then we need to bring climate change experts into the funding discussions earlier.

Key investment decision makers with responsibility for capital will need additional help and support in evaluating climate change scenario risks and their associated impacts early on within their strategic evaluations.  Climate risk cannot be left to a random % point allocated into the risk pot by economists.  As the bullet points above demonstrate, they ultimately will be key to the projects life-cycle and longevity, and not just limited to project delivery.  The active steps taken from the start by implementing EIA and climate change risk advise and thinking into the project can have a significant positive effect on whether the project is sustainable or ultimately a stranded asset.

In these decisions, the financing and funding communities will need early impact assessment advice to a much greater extent than the Engineering project manager will when it is commissioned several years further down the project pipeline.  It is always a wise decision to invest upfront in the management of strategic risk, yet too often it seems that those with the most to lose fail to engage with the one group of experts that are comfortable in determining the significance of climate change impacts, the risk to delivery and whether the design strategy ensures future longevity of investment return.

Calling in the impact assessment community and the tools that define EIA ensures that the knowledge that will arise downstream in the delivery phases when seeking consent is brought upstream and earlier into play when strategic options are still open to debate. The EIA costs will have to be banked at some point in the process, it therefore makes sense to access its strategic information at the funding phases, and have it still available during then delivery phase.

In a recent series of workshops run by Leading Green, the five key areas in which senior IA professionals feel they can make the greatest contribution, benefit and leadership to a large infrastructure project were identified as:

  1. Embedding sustainability and env/soc thinking into decision-making, and being influencial in promoting environmentally (inc climate change) inclusive design.
  2. Defending the project outcomes when EIA & consenting elements are impacted on by engineering parameters.
  3. Ensuring that the voice of the EIA team are heard by the project team.
  4. Safeguarding client (internally) and stakeholder (externally) interests, and
  5. Leading thinking regarding operational and decision-making phases.

Points 1, 4 and 5 clearly have a strategic advantage to investors during the investment phase, whilst points 2 and 3 reflect the continued need for safeguarding client interest when the needs of the engineering project team  to deliver raise risk elements that threaten statutory delivery or the overall legacy risk profile of the investment.

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So my advice is simple, start waking up to the role of EIA early as a design tool and investment guide for the funding decision maker.  In particular how it can assist you deliver a 1.5-aligned infrastructure strategic opportunity.  It makes much more strategic sense than letting your consultant project delivery team view its role solely as an additional project step and a ‘compliance’ tool for regulators!

 

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Leading Green offers its clients specialist advice, training and project management services in 3 key areas:

  1. Client Project Board representation & specialist environmental support in Infrastructure Investment Programmes & Projects (investment planning, site acquisition, project planning, construction and delivery) for large-scale built infrastructure and asset management programmes – Governance, Risk Management, EIA/ESIA & SEA, climate change adaptation strategies, sustainability and stakeholder risk management.
  2. Support to Executive & Operational leadership teams as they develop and deliver environmental and sustainability strategies.
  3. Environmental Leadership & Sustainability in Business training programmes.