Vaclav Smil, scientist and quantifier extraordinaire, paints a relentless, arresting picture of our collective dependency on fossil fuels in his excellent book, How the World Really Works. Take the fossil-fuel footprint of the humble, healthy tomato:
“When bought in a Scandinavian supermarket, tomatoes from Almería’s [Spain] heated plastic greenhouses have a stunningly high embedded production and transportation energy cost. Its total is equivalent to about 650 mL/kg, or more than five tablespoons (each containing 14.8 millilitres) of diesel fuel per medium-sized (125 gram) tomato,” he writes, quipping: “How many vegans enjoying the salad are aware of its substantial fossil fuel pedigree?”
Call it radical realism, but at the end of Smil’s book, you are left in no doubt about the scale of the challenge that is weaning our societies off carbon-intensive fossil fuels. You are also left in no doubt about how dangerous both denialism and ‘greenwishing’ are, given the enormity of the task ahead.
In that sense, a recent cover story published by affiliate title Infrastructure Investor (registration or subscription required) is an attempt to take a hard look at the building blocks of infrastructure and draw attention to construction’s carbon intensity alongside the technologies being developed to make building more sustainable and resilient. It also shines a light on the managers and firms thinking about this problem, and the solutions they are putting in place.
As the Material Girl might have sung, we are living in a materials world, and this is a materials asset class. It’s time, then, to take a holistic look at it, so investors are fully aware of what’s in their portfolios, how vulnerable to climate change their assets are, how insurable they’ll be in the future and, also, how they can expect to be valued in a more volatile world. This is particularly pertinent for new-build assets, where a lot can and should be done to prepare for the challenging times ahead.
There is evidence investors are seeking this knowledge. “Investors are definitely more engaged now and their expectations are higher. There is a much bigger desire to have tangible facts that can evidence action,” Diana Callebaut, head of global investments at Pollination – and former head of infrastructure at Australian superfund Cbus – said. That was echoed by Taronga Ventures co-founder Avi Naidu: “Capital is the biggest driver of this, and many asset managers have begun to realise that doors of capital are beginning to close if you are not thinking about this.”
We appreciate this kind of in-depth sustainability look-through is not front of mind for many of investors in 2023, an uncertain and difficult year where being able to carry on with business-as-usual – let alone spend money on costlier, newer technologies – sounds like no small victory.
We are also wary of getting caught up in the ongoing tug of war around ESG, a dangerous distraction where sustainable construction gets labelled as ‘wokestruction’ and instantly dismissed. That will inevitably happen, in some quarters, and will inevitably miss the point.
The point, as Bill Green, managing partner at Climate Adaptive Infrastructure, put it to us in December 2021, is that “we are building infrastructure today for a planet that no longer exists”.
To build infrastructure for the planet that does exist today requires not only a change of mindset, but an honest and forensic look – Smil style – at how infrastructure is built and maintained. That is the discussion we are hoping to promote with this cover story. And when you think about it that way, 2023 seems, if anything, already late to be having it.