The double-edged sword of £23bn investment in infrastructure

Posted on by Tom Grand

Tom Grand Headshot Achilles Risk Management

Tom Grand, Regional Director in the UKI for Achilles, a leading supplier of risk management services, explores the risk and opportunity for the utilities sector, in a complex political climate.

It’s not every day that a £23bn in new infrastructure could be viewed as a ‘double-edged sword’, but that’s the exact situation facing the utilities sector. Because the potential ‘bonanza’ of opportunities unveiled by chancellor Philip Hammond in his Autumn statement also brings a higher level of risk for contractors seeking a share of the prize.

In a complex political climate, there will be mounting scrutiny on the delivery of new infrastructure. Further, increasingly, we are seeing the public sector imposing strict environmental criteria on projects, and transferring liability onto main contractors.

In this world of increasing accountability and risk, the potential for ‘greenwashing’ by suppliers is well and truly over. The contractors who will thrive are those which can deliver world class standards in sustainability and delivery. It is critical that main contractors engage supply chains and work collaboratively to deliver the best outcomes in terms of operations and sustainability.

Several companies serving the water sector – including Saint-Gobain PAM, Anglian Water and Balfour Beatty – are already leading by example in terms of being truly sustainable. They have reduced emissions year-on-year for six years on one of the world’s most rigorous carbon reductions programmes, CEMARS (Carbon & Energy Management and Reduction Scheme). These firms have evidenced their commitment via robust and verified data.

Anglian Water is also a role model for industry in terms of engaging the supply chain. Having significantly reduced its own emissions, the company extended the implementation of CEMARS to its main suppliers, saving a further 111,000 tonnes of emissions.  There is no doubt that this is a significant achievement in environmental terms, this is a significant achievement. But it also represents a significant cost saving – proving that sustainability and protecting the bottom line go hand in hand.

The UK water sector should follows show the same leadership.  Yet, research shows that more than three-quarters (77 per cent) of utilities firms do not monitor the carbon emissions and energy use of their main suppliers.* (independent research survey of 65 utilities companies globally by IFF).

One solution is for main contractors to ‘qualify out’ suppliers which do not share high standards regarding sustainability. Almost all water companies in the UK use Achilles UVDB – a supplier pre-qualification and verification/audit scheme. There, contractors must answer questions about their operations, as well as sustainability, with sections on carbon reduction.

By giving the supply chain clear guidelines on how they are expected to operate, water contractors can lead the way in delivering sustainable infrastructure and revenue; bringing stability at a time of continued political and economic uncertainty.

Tom Grand is Regional Director in the UKI for Achilles – which operates UVDB and has the licence to run CEMARS in the UK

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