Building a better case for infrastructure investment
Social impact should be a key driver for infrastructure investment, in addition to the traditional measures of economic return and job growth.
In the American city of Atlanta, an abandoned railroad track turned pedestrian path is connecting communities and erasing a redline that once separated them.
In the United Kingdom, a new crosstown rail line is not only expected to improve the commute into London, it may also help some residents live longer by connecting poorer parts of the city with the economic opportunities in the center.
In China, restoring a river running through the center of Nantong is enhancing the sustainability of this industrial port city and improving the wellbeing of the local population.
What connects these projects? Each one delivers “social impact” dividends and addresses pressing challenges that extend value beyond the more traditional economic benchmarks guiding most infrastructure investment today.
Infrastructure's value as a driver of economic growth is a tried and tested measure of success. Potential economic returns are almost always cited in building the case for investment. Indeed, governments looking to reboot economies when the coronavirus pandemic eases are likely to turn to infrastructure precisely for its strengths as an economic multiplier.
Infrastructure’s value as a driver of economic growth is a tried and tested measure of success. Potential economic returns are almost always cited in building the case for investment. Indeed, governments looking to reboot economies when the coronavirus pandemic eases are likely to turn to infrastructure precisely for its strengths as an economic multiplier.
In making the case for infrastructure, social benefits tend to fit the ‘nice to have’ category. In part, this is because they are harder to measure – making success harder to claim. But when it comes to extending value for communities looking to rebuild and adapt to our new normal, social returns are essential.
If the crisis prompts a re-appraisal of societal concerns – as we think it will – it is likely that social needs will get more attention in future. According to psychologist Abraham Maslow's influential theory on the hierarchy of needs, many people will shift toward a greater appreciation of benefits such as protecting public health, correcting social inequities, improving access, boosting quality of life, and enhancing wellbeing.
The move to consider social value has been building for some time due to a variety of factors. Moved to action by climate change worries, the public has been applying greater pressure on corporations and governments to do right by society in their investment decision-making. Companies are finding that a strong environment, social and governance (ESG) proposition can drive value and safeguard long-term success. And governments – mindful of the inextricable link between physical infrastructure and public benefits – are also setting terms during the procurement process that require greater social value considerations, like developing new skills in local populations.
In the wake of tragic and massive fires and hurricanes around the world, cities have been increasing investment in the resilience of physical systems, a proper assessment of which covers social as well as environmental pressures. Dealing with coronavirus is testing some of those systems to the maximum.
In the future, what’s needed is a greater focus on developing standardized, accepted measurement tools to better quantify direct and indirect social impacts. Environmental rating systems provide an organized framework and standardized metrics for measuring performance. If a similar system were developed for social impact, it would offer insight into, extend advocacy for and showcase projects that are not just best in the world, but best for the world.
Measuring social impacts: the long game
In the BeltLine project in Atlanta, Georgia, 22 miles of abandoned railway tracks circling the city’s urban core are giving way to a biking and pedestrian loop as part of a revitalization plan that will connect 45 neighborhoods, add jobs, affordable housing and 2,000 acres of new and upgraded parks.
AECOM provided engineering and design services for this highly touted 25-year urban landscaping project that embraces principles aligned with triple-bottom line reporting, an accounting framework that focuses on social and environmental concerns as much as profits. Established in the early 1990s, and the concept has given rise to other measurement frameworks, including social return on investment (SRoI) and ESG.
Beyond generating $5 billion in new commercial and residential development through its first decade, project backers see the BeltLine’s continuing potential in not just spurring redevelopment, but in easing divisions of class and race, supporting small businesses, promoting healthier living for residents and improving access.