In this episode we tackle the evolving challenges of managing infrastructure investment risk in a rapidly changing world.
As systemic threats like climate change, population growth and social inequality intensify, infrastructure funding models centred on individual assets, on clearly defined risks, and on relatively predictable climate conditions are reaching their limit.
In short, if we are to continue to attract private sector cash to underpin investment in our vital public assets, we need new thinking.
My guest today is doing that thinking and helping to take the necessary action.
Donna Lopata is senior manager for corporate engagement at the Sydney based Investor Group on Climate Change and has just been working with the Institute for Sustainable Futures at the University of Technology Sydney on some ground-breaking research into Systems Stewardship, a radical new way for infrastructure investors to approach the management of risk in this changing world.
Donna’s work caught my attention at the recent Transforming Infrastructure Performance Summit in Melbourne. In her presentation she pointed out that the Australian infrastructure investment industry is waking up to a stark reality: if the overarching economic and environmental systems fail, no individual portfolio is safe.
However, the IGCC’s report: Systems Stewardship: Managing Interconnected Climate Risks for Lasting Value suggest that a fundamental shift is already underway. Yet while some 85% of investment professionals now apply "systems thinking," a significant implementation gap remains, hampering the transition from high-level belief statements to concrete action.
Bridging this gap requires rethinking everything from procurement and carbon assessment to the very fundamental of assessing risk.
Resources
