GIIA CEO Lawrence Slade looks at the challenge of climate adaptation for global infrastructure investors. Earlier this morning, Lawrence joined the Infrastructure Panel at the Climate Adaptation Summit 2021. For more information about the CAS please visit https://www.cas2021.com/. Follow Lawrence on Twitter @Lawslade
GIIA members own and operate infrastructure assets around the world in a range of sectors that serve millions of people every day. Whether it is providing the infrastructure to get them to and from work, connecting them to the digital world, powering their homes and offices, delivering clean, safe and reliable drinking water or providing the necessary social infrastructure that supports their communities, GIIA members invest in a diverse range of essential infrastructure.
Despite the stark differences between these assets and investments, one common theme does apply to all. Namely, how to deal with climate risks.
From water companies like Yorkshire Water who set about increasing flood resistance through the construction of reinforced pump station walls and improved drainage systems to Caruna Energy rerouting electricity cables underground to ensure the continued supply of electricity in adverse weather, GIIA members are recognising and adapting to a changing global climate.
The challenge of climate adaptation is no longer viewed, in infrastructure investment circles, as something extraneous to core business risks, but instead is now a vital component of any risk mitigation strategy.
Indeed, research by the National Institute for Building Sciences estimates that for every $1 invested in climate resilience saves $6 in future economic disruption from extreme climate events.
Recently GIIA, in partnership with Marsh & McLennan, released a report looking at climate risks for infrastructure investors that recommended investors employ three levers to defend their assets against climate risk: namely –
- Using modern technology for climate focused scenario planning to predict future outcomes;
- Considering key decision checkpoints in infrastructure asset life-cycle and timing climate resilience interventions appropriately; and
- Using stakeholder engagement to proactively manage interdependent risks across an asset’s ecosystem.
While climate change has forced a structural rethink of risk profiles within the sector, this has led to an increased focus on climate resilience and adaptation strategies which, ultimately, delivers improved reliability for those millions of people who rely on today’s infrastructure in their day to day lives, and of course look to the sector to provide the clean, resilient infrastructure for future generations.