Sustainable infrastructure will be key to safeguarding biodiversity
Can an infrastructure boom also be a boon for the environment?
By 2040 it is estimated we will spend nearly USD 80 trillion on infrastructure to support the changing needs of our growing population. New transport links, housing, energy supplies and communications connectivity are all key to meeting the UN’s Sustainable Development Goals. And as we look to a post-pandemic recovery, there is also an expectation that we can build our way out of many of our economic woes.
But nature has been paying the price of this development. Alarms are sounding over biodiversity loss and ecosystem damage. And the pressure is on to find new ways to unite the drivers for development with the health of the natural world.
Over the past year, the infrastructure sector in particular has been crippled by market ambiguity and lukewarm investor sentiment. But as vaccines are rolled out, the first glimmers of light at the end of the tunnel are just about visible. With this reboot, the chance to reset the path we were travelling has been recognised by many. This must include building with the natural world in mind and supporting sustainable development, particularly in emerging markets.
The pressures of the pandemic have thrown new focus on the need for more innovation and resilience as we come out of the crisis. It’s something bigger than any one party can solve alone – governments, finance institutions and the private sector all have a role to play. And, of course, the insurance sector can influence the direction and viability of projects through what it chooses to underwrite and the premiums it offers.
Using the answers nature has given us
We are losing plant and animal species at an unprecedented rate. And communities around the world are coming under increasing pressure from climate change.
Speaking at a recent European Investment Bank (EIB) webinar, Amy Fraenkel, Executive Secretary of the Convention on the Conservation of Migratory Species of Wild Animals, said: “Often decisions to invest in a particular type of infrastructure occur without a full consideration of options for achieving the desired services and without a full cost benefit evaluation of the impacts of any planned infrastructure on the natural environment.
“It is critically important that these elements be part of an upstream planning process, sometimes referred to as strategic environments assessment.”
There is a measurable financial cost to this biodiversity loss and environmental damage. According to research by the Swiss Re Institute, 55% of global GDP depends on intact biodiversity and ecosystem services. But a fifth of countries are at risk of ecosystem collapse.
Humans encroaching into and damaging the natural world has also been highlighted as a risk factor for the spread of future zoonotic infectious diseases.
We need to find ways to mitigate and reverse the damage we have inflicted on our planet. And it is becoming increasingly clear Mother Nature already has solutions to many of the problems we face. We need to work hand in hand with her to incorporate this natural engineering into our infrastructure.
Building in sustainability
Sustainability is at the heart of the challenge. By prioritising and investing in projects that promote the health of our planet, we can ensure that our infrastructure is both more resilient and inclusive.
During the EIB webinar, Amar Bhattacharya, Senior Fellow – Global Economy and Development, Center for Sustainable Development at the Brookings Institution, said we are entering a unique transformative period. “The world needs to build almost the same stock of infrastructure that exists on the planet today over these coming two decades.
“And if we repeat what we did in the past, then we will not just kill the planet, but we will not even serve the people who are on it. So, this is the opportunity for us to rethink the way we approach the sustainability of investments. And in some sense, not just their environmental impacts, but also their social impacts and the economic durability of these investments.”
Positive progress and changing attitudes
There are signs the banking and financial sectors are moving to include biodiversity as a factor in infrastructure investments. This is evidenced by the UN network Principles for Responsible Investment, which has seen its membership grow more this year than ever before in its 15-year history.
There are also some encouraging instances of public-private partnerships promoting biodiversity. Club Infrastructures Linéaires et Biodiversité (CILB) is an example of public authorities and private contractors working together to establish a biodiversity reference network that can be used to inform infrastructure decision making. This group, which features some of France’s biggest companies, devises schemes and works with NGOs to put biodiversity at the heart of infrastructure.
Similarly, the European Green Deal, which is targeting carbon neutrality in Europe by 2050, has set a framework in which administrations, citizens and the private sector can come together to build a sustainable future. The current climate provides the ideal opportunity to capitalise on this: the EU is providing an additional EUR 750 billion for its countries to invest in infrastructure as part of their economic recovery from the coronavirus.
And from our own experience at Swiss Re underwriting green infrastructure, we know it is possible for infrastructure to be not just sympathetic to biodiversity, but to actively promote it.
With attention turning to economic recovery, we now need to turn these exceptions into the norm. Together, we have the power to build in safeguards to ensure biodiversity for the future.