Delivering Sustainable Capital Projects has been saved
Delivering Sustainable Capital Projects
Capital projects have a uniquely large impact on climate change. These are long-term projects most commonly involving construction, infrastructure and ongoing asset maintenance and are generally large in scale and cost. The built environment sector alone contributes 45% of UK Greenhouse Gas (GHG) emissions, and so can contribute significantly to achieving our local and global net zero goals. The sector has the capability and mandate to ‘rewrite the future’ of sustainability.
Our team advises the largest and most complex major capital programmes to make large scale strategic, transformation, investment, sustainability and delivery decisions. It is also a vision that creates a positive cultural legacy by encouraging sustainable operations, social change and biodiversity.
The path to net zero
The move towards a clean energy future is under way and is changing how capital projects are delivered. Corporations and governments have made bold commitments to reach net zero: where the amount of GHG emissions going into the atmosphere are balanced by the amount removed from it.
Capital projects have shown how they can help ‘rewrite the future’ with solutions to our climate crisis, but to achieve net zero targets, capital project organisations must adapt. Right now, business enablers and public pressure are converging to motivate change, so the companies that lead on climate action will improve their reputations.
In a new report: Delivery Sustainable Capital Projects, we draw on research and insights from across Deloitte, as well as examples from the capital projects industry, to outline the case for change. Our report defines the benefits and characteristics of the Sustainable Capital Project (SCP) Lifecycle, and highlights the exciting potential for making a difference now.
The time to act
We are at a turning point in the climate crisis. The technology and solutions for reducing net zero emissions are now as effective and compelling as the societal and political pressures to act.
Capital projects operate in the industries responsible for the highest levels of waste and emissions, and therefore have a disproportionate ability, opportunity and responsibility to meet local and global sustainability goals.
Some capital project organisations, such as Shell, have begun to declare carbon neutrality goals, but the industry still lacks in changing to achieve net zero. Although commitments have been made, these have been criticised for not delivering big changes now – typically because industries such as oil and gas have historically put carbon at the core of their business.
Countries recovering from the effects of COVID-19 are putting infrastructure investment high on the agenda, with the UK looking to ‘build back better, greener and fairer’. This presents an immediate opportunity to embed sustainability at scale, so now is the time for action.
Transformation helps both planet and business
End-to-end sustainability across the capital project lifecycle can improve top and bottom-line value, and benefits both employees and society. Sustainable projects can also support positive social and cultural transformation, to improve an organisation’s reputation while still meeting its commercial requirements. And importantly, current talent and future leaders will actively favour organisations with strong environmental and social values.
Capital project organisations that act now to embrace ESG principles will benefit from greater investment, attraction and retention of top talent, and improved credit quality.
The cost of sustainable delivery is lower than ever before meaning that transformation has become an industry norm rather than a pioneering risk. Regulatory incentives and taxes on pollution from governments also make the commercial argument more compelling.
Practical steps throughout the lifecycle
Capital-intensive organisations must assess both their emissions and appetite for change. Our SCP Lifecycle model helps pinpoint emission hotspots and helps to embed sustainability across project operations. It assists organisations in aligning project design and financing with ESG principles, to drive action on emissions throughout the value chain.
Capital project organisations embracing the SCP Lifecycle will need to change their operating model to see the long-term benefits. In our latest report we explore the practical steps needed for sustainable delivery: from building sustainability metrics into project reporting, to appointing net zero specialists to governance roles.
Embedding the SCP Lifecycle involves a thorough challenge to traditional methods, to embed sustainable thinking throughout the project, and create lasting change.
How we can help
Deloitte understands the ‘stick or twist’ dilemma that many organisations are now facing. We help clients digest the challenges and get started on their own net zero agendas, identifying ambitious targets across the lifecycle.
With expertise across capital project industries, and experience in designing and managing large capital projects, the Deloitte Capital Programmes team is well-placed to help deliver sustainable capital projects.
Read our full report here and explore our vision for sustainable capital projects.
Get in touch with one of our capital project leaders today.