Sustainable development and infrastructure

The building of infrastructure has a profound and irreversible impact on the environment and on people’s lives. During and after construction, new infrastructure results in changes to the landscape, flora and fauna, altering flows and links between areas and thus changing the opportunities open to the community. The building of infrastructure is, therefore, not only a “question of money”. It is also necessary to consider and assess a project’s sustainability in economic, environmental and social terms, which form the three key pillars for sustainable development.

Companies play a decisive role in this process. Infrastructure in itself has a major environmental impact, in hydrogeological terms, on the surrounding area: if the approach to design and construction is not environmentally friendly, there is a risk of causing irreparable damage. Inadequately built, upgraded and maintained infrastructure can result in irreversible damage, with fatal consequences for nature and human beings, as well as having a notable impact on the quality of life of the surrounding communities, in terms of noise and air pollution, at times resulting in significant social costs. Infrastructure that is not easily accessible, that does not effectively connect areas and people, can have a negative economic impact, limiting or even impeding trade. The companies that operate in this sector thus need to adopt sustainable business policies, promoting the adoption of sustainable principles among their stakeholders. They are, in other words, called upon to be what has been defined as socially responsible.

If applied to companies, the concept of sustainable development, a shared value of global and systemic importance, thus becomes that of Corporate Social Responsibility, defined by the EU’s institutions as “the responsibility of enterprises for their impacts on society” (European Commission, 2011). The concept of Corporate Social Responsibility has given rise to a new way of “doing business”, as opposed to the traditional purpose of such entities, where concerns of a financial nature are of central importance.

Companies have a variety of options open to them in responding to these new obligations and requirements, the nature of which can be seen from the practices actually adopted and which fall within a continuous range between two types of approach. On the one hand, an “end‐of‐pipe” approach, where the company reacts to events after they have happened. This business sees issues relating to sustainability as an imposition, viewing them as a sort of restriction and responding only in order to cover its tracks: the interaction between the company, on the one hand, and the environment and society, on the other, is of a defensive/reactive nature. The company takes steps to resolve the potentially negative effects of its processes and products after the event, without considering what changes it could make to the way it operates to prevent such effects. A truly sustainable approach to development, on the other hand, requires a strategic perspective, focusing on the creation of value over the medium to long term and aiming to achieve a dynamic balance between all stakeholders. The company takes proactive steps to ensure it has a positive impact on the environment and society, generating improvements by preventing negative effects, in contrast to so‐called greenwashing initiatives.

Sustainable development principles require companies to cease giving priority to financial aspects and a short‐termist approach and to take a balanced, strategic view of the environmental and social issues that are important to stakeholders, within the context of the medium to long term. Adopting a sustainable mindset means rethinking strategic objectives, organisational structures, corporate governance, the tools used and the way that performance is measured. This cannot effectively take place unless the company first arrives at a coherent definition of its mission and its core values. This requires a radical change of direction, with a major impact on corporate culture, if the company is to remain competitive. The need for a strategic approach to sustainability, which aims to generate long‐term value for the various categories of stakeholder, is the key message for companies (Porter and Van Der Linde 1995a; 1995b).

Companies that are truly sustainable are, therefore, those capable of identifying areas of mutual interest with their stakeholders and of pursuing those interests over the long term; areas in which doing good and doing well are not in conflict but feed off and enhance each other. Above all in this sector, given that infrastructure generates significant environmental, social and economic effects, which can only be tackled if all the various stakeholders – those who directly or indirectly benefit from or are harmed by the related impact ‐ adopt a shared approach. To operate in the infrastructure sector requires the adoption of a pluralist approach: the stakeholder engagement process is critical if long‐term objectives are to be achieved. Engagement with government bodies in order to ensure the right kind of policies are introduced; engagement with the automotive sector and road users, so that the vehicles used and driving behaviours play a key role from the point of view of safety, as well as in terms of environmental impact; engagement with the communities who live close to the infrastructure, so as to avoid, or in any event as far as possible limit, any negative impact on their lives and, on the contrary, create opportunities for growth. This issue cannot but be of strategic importance, requiring the company to shape and design its business model accordingly: environmental and social considerations cannot be taken into account with an end‐of‐pipe approach, as the negative effects of the failure to adopt a proactive view of sustainability often cannot be completely reversed once the damage has been done, given that it is very likely to be irreparable.

The approach must be unified and all‐encompassing, strategically oriented and appropriately backed up at the operational and organisational level: environmental and social concerns must become a part of the company’s DNA. With regard to the environment, the company must thus establish a culture based on prevention, dialogue and protection, assessing the impact of processes, products and services on natural resources, on the air, water, soil, biodiversity and on human health, making more or less radical changes in order to safeguard environmental assets. The social dimension takes in a wide range of issues, including not only the company’s own human resources, in terms of occupational health, safety, well‐being and human rights, but also relations with the local community. Such relations should not merely take the form of corporate giving, but should result in concrete initiatives such as development projects in which the company plays a part, assuming responsibility for the repercussions for the relevant community in order to create value over the long term. Common to all these aspects is the central role played by the supply chain: in certain sectors, firms have adopted business models in which operating processes have in effect been contracted out to third parties (contractors and sub‐contractors). In these situations, the choice of commercial partner is probably even more critical, as is their involvement in the adoption of a sustainable way of doing business; companies thus play a central role in promoting the spread and adoption of sustainable development principles among external parties, above all those that form part of their supply chain.

The above features of a sustainable business model are very relevant to the infrastructure sector, in which the key elements of the concept of sustainable development assume added importance. In first place, the characteristics of the activity carried out: infrastructure construction, by its very nature, calls for long‐term considerations to be taken into account, in relation to both the construction of new transport networks and 3 the upgrade of existing ones, and their use. Secondly, in terms of the environment, infrastructure has a very significant impact on ecosystems, which by necessity calls for a preventive approach, prior consideration of the potential repercussions and constant monitoring, both during construction and once the infrastructure has entered service. In addition, on the social and economic front, infrastructure has always played a major role in the development of communities: access to transport networks enabling the safe movement of people and goods is key to generating value on a global scale.

Since the time of the Venetian Republic, people have been aware that the design and construction of infrastructure works gave rise to extremely delicate issues when looked at from the public interest perspective. As well‐documented by Giavazzi and Barbieri, a system for selecting members of the Magistratura delle Acque (the body responsible for managing Venice’s water resources) was devised in such a way as to keep public and private interests separate.

A country’s infrastructure system is an engine for growth, driving the development of geographical areas and supply chains by effectively connecting the various players. In certain sectors, such as culture and tourism, it is no less than essential, guaranteeing access to places of interest. In a country such as Italy, which its unique natural, artistic and cultural heritage, the availability of an adequate infrastructure system that not only takes into account, but above all enhances, the key characteristics of that heritage, is central to kick‐starting development and making the most of a potential that has yet to be fully exploited.

An infrastructure sector, made up of actors for whom the concept of sustainability has assumed strategic importance, thus has a pivotal role to play in facilitating solid and concerted efforts capable of enabling further progress along the road to creating value at global level.