Sustainability as a Key to Systemic Change in the Infrastructure Sector
The construction sector is facing several systemic issues that is undermining its ability to deliver the pipeline of future projects. For example, a recent study by the Australian Constructors Association estimated that the associated productivity loss impact this has is equivalent to $56 billion additional construction that we could be delivering per year, equivalent to 10 000 km new roads or 1 000 schools. Similarly, the New Zealand Treasury estimated that there is roughly a $200 billion infrastructure delivery gap. These are obviously complex and systemic problems, yet sustainability can serve as an ideal catalyst to help turn this around. This article delves into the opportunity that sustainability offers in driving systemic change and improving overall performance within the sector.
Most of my experience has been to drive large-scale change on a sector level. It includes leading the function within the United Nations member organisations to maximise the value that can be delivered through their national pipelines of infrastructure work. It is from this experience that it became clear that sustainability is an ideal catalyst or driver for large-scale change. It is not only critical and important, but it is a topic close to people’s hearts and has a significant flow-over on performance across all organisations.
The State of Affairs: Where We Stand
In line with the above ACA research, there has been a significant push to towards a more collaborative contracting and delivery approach across the infrastructure value chain. Yet, many key organisations and procurement functions are still operating on an arm’s length or silo basis. With pressing challenges such as stagnant productivity, a concerning rate of employee mental health issues, excessive firefighting, and difficulty in retaining top talent, the current model begs the question: Is it still fit for purpose? Furthermore, where infrastructure was once viewed as a catalyst for economic growth, ballooning costs and political embarrassments have fostered a growing cynicism, affecting growth and the ability to offer meaningful jobs. We urgently need to get out of this.
Embracing a Collaborative Outlook
One trend that has been the primary driver of productivity and performance improvement, is the shift towards collaboration/integration underpinned by more modern people-orientated practices, government policies, systems, and training. This is a fairly constant theme on an international level. Organisations and supply chains that once functioned within their silos are breaking through this, resulting in unparalleled levels of synergy and productivity improvement, sometimes by a staggering 30%. This is certainly not an overnight change, and it often took decades in other sectors. But this goes beyond mere productivity – it’s about the pace of change, the ability to adapt and thrive in increasingly complex environments.
The punchline is that the sector needs a massive overhaul to meet the demands of an ever-evolving world, and we need something that pulls us together to do this. Driving this from a typical productivity, efficiency or value for money standpoint has very little inspirational effect on the people that really matter on the coalface. We need change that is also driven bottom up.
The Sustainability Catalyst
Amidst this backdrop, sustainability emerges not as a background clutter but a resounding call to action. With the infrastructure sector having a hand in around 80% of greenhouse gas emissions and a profound influence on community well-being, the pressure to act responsibly is paramount.
And while many see sustainability from a mere compliance lens and as a business cost, there’s a profound link between sustainability and organisational performance waiting to be explored. The top of the iceberg is that it creates an environment where people are important, and it therefore offers a more meaningful and participatory work environment. Dive deeper, and one finds that there is a significant overlap on a practice level, as also contained in the ISC framework, between sustainability and the trend towards a more productive organisation. To mention only a few, it includes early-stage planning and design input (Early Contractor Engagement), resource consumption minimisation (Lean construction), better governance, end-to-end collaborative process reviews, stakeholder engagement, better governance and positively impact employee wellbeing. The spill-over effect of these changes, as what has often happened in the water sector, has a profound impact on organisational performance. Yet, from a change management perspective, we are now driving change through a topic that is close to people’s hearts where you gain natural participation and where people are willing to take a personal stand to do things better. Hence the statement that sustainability is an ideal catalyst for systemic change.
Drawing from experience within asset owners, major contractors, sub-contractors, councils, and others, virtually all the sustainability-driven initiatives have not only led to marked sustainability results, but also provided a commercial benefits case that effectively funds a much deeper investment into sustainability initiatives. This demonstrates the potential of sustainability as an investment, one that reaps multifaceted returns. For example, a recent council benefits case, using sustainability as key driver, resulted in a $200 million or 12% additional infrastructure benefits case, based on resource efficiencies, improved collaboration, and employee wellbeing. This has a profound impact on the long-term quality of life of the local community. We therefore need to broaden our understanding of the sustainability value proposition as an integral part of operational performance.
The Road Ahead: Courageous Leadership
In essence, the infrastructure sector is presented with dual challenges – ramping up organisational performance and fulfilling the growing sustainability mandates. Yet, a key lesson is that these challenges intertwine, with sustainability emerging as a bridge that paves the way for a collaborative, efficient and forward-thinking infrastructure sector. Done correctly, these are complementary forces that accelerate positive change.What’s required now is courageous leadership – leaders who see beyond compliance, and view sustainability as the very fabric of an organisation’s strategy, culture, and operations. Such an approach promises value not just for businesses, but for the environment, communities, and the future we’re building. The call to action is clear: embed sustainability in the fabric of your organisation to deliver better results.
About the writer: Herman Potgieter has been intimately involved in infrastructure development, from a programme manager perspective up to leading national infrastructure pipeline initiatives. Much of this is also to look at the performance of the total supply chain to operate on a much more integrated and collaborative basis. He has also served on the ISC’s Water Advisory Group.