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ISCA | Blog: Sustainable infrastructure set to deliver big dividends in our economic rebound

The twin crises of the Black Summer bushfires and Covid-19 have tested the resilience of Australia’s systems and recalibrated business-as-usual. The challenges and consequences ahead are interconnected – but so are the dividends that sustainable infrastructure can deliver to communities.

In few short months, we’ve stress-tested the systems and structures that underpin our nation. We’ve exposed weaknesses in our supply chains, inequities in our distribution of essential services and gained a new appreciation of social infrastructure at the heart of our communities.

Now, as governments gear up to stimulate the economy, we know spending on infrastructure will play a central role in our economic rebound. But just as the challenges we face are complex and interconnected, our infrastructure investment must deliver on a host of complex and interconnected priorities.

Governments know that public infrastructure is a great economic multiplier – and that every dollar they invest in public infrastructure delivers around four dollars in GDP value over the life of the asset.

But now, a new cost benefit analysis undertaken by RPS Group illustrates how sustainable infrastructure can deliver an even bigger dividend.

ISCA’s IS Rating Scheme was launched in 2012, and has since measured the social, environmental, governance and cultural outcomes delivered by more than $200 billion major infrastructure projects.

The study, IS Rating Scheme Return On Investment, finds infrastructure projects IS-rated projects are set to deliver a minimum of $1.60 in benefit for every dollar spent – and this figure could be as high as $2.40 in benefit.

What’s more, if the uptake of the IS Rating Scheme was doubled, the net benefit would soar to $90 million.

The independent analysis monetised benefits such as carbon, water, ecology and air emissions, because we know  IS-certified as-built assets deliver average savings of 18% in energy, 29% in water and 31% in materials when compared to standard practice.

While the study does not quantify wider social value such as health outcomes and human capital development, we have emerging evidence that illustrates the many qualitative benefits.

We know pursuing an IS Rating upskills the workforce, encourages innovation and drives process improvements. People learn to think more strategically across the asset lifecycle, which in turn enhances procurement and supply chain efficiencies. IS ratings also de-risk assets and boost financial performance.

Most importantly, infrastructure that considers emissions, resilience, liveability and long-term community value builds a better future for generations.
ISCA has embarked on a campaign that calls on all governments to embrace five practical actions:
  1. Mandate sustainability: Set the policy default for all infrastructure to sustainable and resilient, as well as economically productive
  2. Prioritise productivity multipliers: Invest in projects that that deliver both productivity multipliers  and non-market (benefits, including sustainability and liveability
  3. Leverage procurement: Stimulate local economies by developing skills and capacity and drive nation-wide innovation across the supply chain
  4. Commit to best practice: Adopt recognised standards on all shovel-ready projects to measure and achieve best practice sustainability performance
  5. Embrace transparency: Use assured performance data to communicate the outcomes delivered for business, communities and the workforce.
Over the next few years, infrastructure will play a mission critical role in our economic rebound. But we must ensure the money we spend today leverages not only the economic benefits, but the environmental, social and cultural benefits too.

Download the study below 
ISCA ROI Study_Exec Summary 2020
ISCA ROI Study_Full report 2020
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