The Intersection of Sustainability, Infrastructure, and Investment: Key Trends and Insights

In the midst of Climate Week 2023, I started thinking about some of the issues affecting the critical infrastructure needs including addressing sustainability and closing the investment gap. Specifically, I looked at three key initiatives helping to drive progress in these areas across the US are the UN Sustainable Development Goals (UN SDGs), the Global Infrastructure Hub's (GI Hub) infrastructure investment goals, and the Infrastructure Investment and Jobs Act (IIJA) recently passed in the United States. Understanding the intersection of these efforts can provide valuable insights into future trends and opportunities.

The UN SDGs are a collection of 17 goals focused on ending poverty, protecting the planet, and ensuring prosperity for all as part of the 2030 Agenda for Sustainable Development. Infrastructure development and investment are crucial for meeting many of the SDGs, including Goal 9 on industry, innovation and infrastructure and Goal 11 on sustainable cities and communities.

In 2017, the GI Hub estimated that there will be a staggering USD$15 trillion global infrastructure investment gap by 2040, of which the US will have a USD$3.8 trillion gap (source: GI Hub Outlook). The GI Hub identified 26 levers that governments can pull to help close this gap, including:

• 5 Revenue (funding)-type levers.
• 7 Risk management-type levers.
• 14 Financing-type levers.

The Infrastructure Act passed in the US in 2021 takes a bullish approach to help the US close its infrastructure investment gap. The IIJA dedicates $1.2 trillion to restoring infrastructure such as roads, bridges, rail, transit, ports, airports, the electric grid, and expanding access to broadband. The Act has a strong emphasis on climate resilience and sustainability, with investment targeted at areas such as EV charging infrastructure, renewable energy development, and upgrading water infrastructure. Up to 40% of the benefits are aimed at disadvantaged communities.

Several key trends to watch at the intersection of these initiatives include:

• Increasing private sector involvement in sustainable infrastructure investment through public-private partnerships and blended finance models. Private capital can help close the enormous infrastructure investment gaps.
• Technology innovation improving infrastructure sustainability, resilience, and productivity through areas like intelligent transport systems, smart grids, and the Internet of Things.
• Growth of infrastructure as an asset class as investors seek stable returns and diversification. Institutional investors are increasing allocations.
• Focus on "future-primed" infrastructure able to adapt to megatrends like urbanization, climate change, and automation. Planning and design with flexibility in mind is key.
• Emphasis on inclusive, equitable infrastructure improving access for all to services, resources, and economic opportunity. Infrastructure investment that addresses community needs has cascading social benefits.

Some strategic opportunities at the intersection of sustainability, infrastructure, and investment include:

• Leveraging government infrastructure investment to catalyze larger private capital inflows.
• Promoting adaptable, resilient designs optimized for long-term sustainability.
• Accelerating adoption of high-impact clean technologies such as renewable energy, EV charging, and battery storage through supportive infrastructure.
• Prioritizing inclusive infrastructure initiatives improving access to water, sanitation, broadband, and transit.
• Forming new collaborations and partnerships across public, private, and nonprofit sectors.

The scale of investment and cooperation needed to meet development goals focused on sustainability and infrastructure is enormous, but so too is the opportunity to build back better and shape a more inclusive, resilient future. Paying attention to the key trends and strategic opportunities at the intersection of these efforts can help provide focus and spur innovation. The global community has the chance to lay the foundation for transformation to more sustainable, equitable societies.

United Nations

UN Sustainable Development Group

Public-Private Infrastructure Advisory Facility – Global Infrastructure Hub