Sustainability in infrastructure investment : building the business case
Reidy, Angela, Kumar, Arun, & Kajewski, Stephen L. (2014) Sustainability in infrastructure investment : building the business case. In Practical Responses to Climate Change Conference 2014, Engineers Australia, Melbourne Convention and Exhibition Centre, Melbourne, VIC, pp. 331-339.
Many infrastructure agencies adopt sustainability objectives at a corporate level and incorporate sustainability targets and indicators as part of corporate reporting processes. These objectives are expected to translate to all stages of the project delivery process, including project selection. For infrastructure capital works projects and programs, a robust project management approach involves the development of a business case to guide investment decision making. A key tool in the assessment of project options and selection of a delivery strategy is Cost Benefit Analysis (CBA). Infrastructure providers are required to undertake cost benefit analysis to support project selection through regulatory approval and budgetary processes. This tool has emerged through the prism of economic analysis rather than sustainability. A literature review reveals the limitations of CBA alone to effectively evaluate economic, environmental and social externalities or impacts that apply over a long time frame, and that are ultimately irreversible. Multi-Criteria Analysis (MCA) has been introduced as a means to incorporate a wider array of factors into decision making such as sustainability. This, however, presents new challenges with issues around how to transparently represent wider community values in the selection of a preferred solution.
Are these tools effective in assessing the wider sustainability costs and benefits taking into account that these are public works with long life spans and significant impacts across institutional boundaries? The research indicates a need to develop clear guidelines for investment decision making in order to better align with corporate sustainability objectives.
Findings from the literature review indicate that a more sustainable approach to investment decision-making framework should include: the incorporation of sustainability goals from corporate planning documents; problem definition and option generation using best practice investment management guidelines; improved guidelines for Business Case development using a combination of both Cost Benefit Analysis and Multi-Criteria Analysis; and an integrated public participation process.
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|Item Type:||Conference Paper|
|Keywords:||sustainability, infrastructure, business case, cost benefit analysis, investment decision making|
|Subjects:||Australian and New Zealand Standard Research Classification > ENGINEERING (090000)
Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000)
|Divisions:||Current > Schools > School of Civil Engineering & Built Environment
Current > QUT Faculties and Divisions > Science & Engineering Faculty
|Copyright Owner:||Copyright 2014 [please consult the author]|
|Deposited On:||01 Dec 2014 22:52|
|Last Modified:||15 Apr 2015 00:19|
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