The Future of Environmental Social Governance (ESG) in PPP

Artelia Director of Asset Management, Robert Marr and colleagues Jibran Mirza and Nicola Paice recently took part in a Partnerships Bulletin Hub event, bringing together the public and private sectors to explore the future of ESG in PPP.  It’s a subject Artelia is passionate about so we thought we would share some of their top takeaways from the event:

Embedding ESG within partnerships

• Partnership projects are fundamental to making the future but we often underestimate the potential due to our perceptions of time.
• Whilst it’s good to imagine the future, it is even better to work out how to get to the imagined outcomes and PPP projects have a big role to play here.
• Social enterprises work best when the relationships are actual partnerships, not totally transactional or informally collaborative in nature.
• More jobs don’t always mean more social mobility for a region. It can cause upheaval in the existing social system so the “S” in the ESG needs to be very wide ranging.
• Industry and Government need to work a lot closer with each other in a mutually respectful way to ensure the ESG outcomes are best met.
• Social value can get overtaken by environmental issues, so there is a need to give it equal weighting as part of PPP delivery.

The role of infrastructure in achieving our sustainability goals:

• The worldwide energy sector has reached the tipping point where it is no longer economically feasible to invest large amounts into fossil fuels. The future will see reliance on nuclear and renewables.
• Interesting concepts for power generation are emerging: Small modular nuclear reactors; hydrogen production and storage in heavy industry cluster areas like Teeside; EV Fleets (such as those owned by rental companies) which are unused in the winter months could link together as one big battery – the technology in a car battery being sufficient to power a typical house for a week.
• The first Hydrogen trucks are likely to hit our roads in 2026 but will the infrastructure be available for them?
• Digitalisation is old news…next is AI and robotics.
• Did you know Milton Keynes is leading the way in robotic parcel delivery and that we could be just 10 years or so away from a £20k butler!

What governance actually means in practice

Organisations need to really consider the wider impacts of their corporate ESG Policy – for example, if the policy states that you do not buy from countries with a poor record of slavery then this may preclude purchasing electric vehicles as lithium car batteries have potential human rights issues with extraction and processing.

With thanks to Partnerships Bulleting for running such a fascinating Hub event. We look forward to putting these learnings into practice and pursuing the ESG agenda on future PPP projects.