Global sustainable infrastructure, explained
Rahul Bhushan
MD, Europe and Global Head of Index at ARK Invest (CO-FOUNDER OF RIZE ETF) | Thematic and Sustainable Investing Strategist | Angel | Lecturer | Father of two ????????
In the intricate tapestry of society, infrastructure stands as the unassuming thread that weaves together the fabric of progress. Often overlooked, it serves as the backbone of our daily lives, enabling everything from the simple act of turning on a light switch to the complex mechanisms that power entire industries. Here, we explore the essential nature of infrastructure in fostering economic growth and how it plays a fundamental role in achieving global development objectives.
Infrastructure is the foundation upon which modern societies are built. Its significance is best understood by considering the services we rely on daily: energy, transportation, communication, water supply, sanitation, waste management and more. These basic amenities are not only essential for a functional society, but also vital for individual well-being. They create a framework that supports a healthier, more efficient and interconnected community.
Beyond meeting basic needs, infrastructure plays a pivotal role in driving economic growth. Think of it as the catalyst that sparks innovation and progress. The diverse facets of infrastructure, from energy systems to transportation networks, form the backbone of industries and commerce. They provide the pathways for businesses to flourish, attracting investments, generating opportunities and fostering job creation. In this way, infrastructure is not just a necessity but a driving force behind global prosperity.
Addressing the Infrastructure Gap
As the global economic pursuit advances, the gap between infrastructure demand and supply is widening. Currently, the infrastructure gap, or the disparity between existing supply of infrastructure and demand for future infrastructure, is estimated at over $USD 1 trillion annually, and growing, posing a significant challenge.[1] Moreover, bridging the infrastructure gap is crucial to fulfilling the United Nations’ 2030 Agenda for Sustainable Development, commonly specified as the Sustainable Development Goals (SDGs).
Accordingly, the long-lasting effects of infrastructure investments necessitate strategic choices that align with our future sustainability goals. It’s not merely about plugging the infrastructure gap, but doing so with a vision for a resilient, equitable and environmentally responsible future.
While SDG 9 explicitly highlights the significance of Infrastructure, Industries and Innovation, the reach of infrastructure’s impact is far-reaching. It intersects with other goals such as Climate Action (SDG 13) and the preservation of ecosystems and biodiversity (SDGs 14 and 15).[2] This interconnectedness reflects the pervasive influence of infrastructure across the SDGs, supporting economic growth, social inclusivity and environmental stewardship.
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An Integrated Approach for the Future
To address the infrastructure challenges of today and tomorrow, therefore, an integrated approach is essential. Basic infrastructure services often face threats from conflicts and environmental vulnerabilities. Construction and maintenance of built infrastructure can strain natural resources and ecosystems. Poor planning and execution can lead to detrimental effects on local communities and environments. This integration, rooted in the triad of economic growth, social inclusivity and environmental protection, becomes the bedrock upon which sustainable development stands.
Accordingly, sustainable infrastructure is more than a concept; it’s a set of guiding principles for responsible progress. It encompasses socio-economic inclusivity, environmental resilience and efficiency. A concise definition by the Inter American Development Bank encapsulates this essence:
Infrastructure that is designed, constructed, operated and retired with considerations for economic, social, environmental and institutional sustainability across its lifecycle.”[3]
Incorporating these principles into infrastructure development ensures a legacy of progress that respects both the needs of the present and the possibilities of the future.
Conclusion
Infrastructure’s role in development is anything but mundane. It’s the heartbeat of progress, pulsating with the energy that powers economies, connects societies and enhances lives. As we navigate the challenges of a rapidly changing world, embracing sustainable infrastructure isn’t a luxury; it’s a necessity. By recognising its critical importance, we lay the groundwork for a future where development is harmoniously balanced with the well-being of our planet and its inhabitants.
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