Presentation make by Alison Hoare - Senior research fellow, Energy, Environment and Resources, Chatham House - at the 2nd OECD Forum on Governance of Infrastructure, Paris, 20th March 2017. For more information see www.oecd.org/gov/oecd-forum-on-governance-of-infrastructure-2017.htm

1. Implementing standards for sustainable infrastructure:
the role of procurement
Alison Hoare, Senior research fellow, Energy, Environment and Resources, Chatham House
Productivity, Jobs, Wellbeing: Making Infrastructure Deliver. OECD, 20 March 2017, Paris

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Infrastructure & deforestation
Source: Hosonuma et al. (2012) An assessment of deforestation and forest degradation drivers in
developing countries. Environmental Research Letters 7
10% of deforestation in tropics/subtropics driven by infrastructure
(2000-10)

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Infrastructure as an agent of change
Infrastructure & supply chains
• 50% raw materials & 80% mineral raw materials used by
construction sector
• Major source of contracts & business opportunities
Source: Schouten & Bachmann,
2017. Roads to Peace? DIIS &
UNOPS

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Sustainable procurement
Source: KfW (2014) Toolbox. Sustainable procurement

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Sustainable procurement to promote best practice
Source: KfW (2014) Toolbox. Sustainable Procurement
Lifecycle assessments from tenders for a road construction
project, Finland

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Sustainable procurement to promote best practice
Motorway reconstruction, A6 Almere, Netherlands
• Tenders assessed on price & quality, including sustainability
• Sustainability assessed with:
• CO2e performance ladder – rates companies on basis of
energy savings, efficient use of materials & use of renewable
energy;
• DuboCalc – based on life-cycle analysis of the sustainability of
materials used in a contract
• Results of tender process
• Design that reduced the need for transport
• Lower material consumption, through design and use of recycled
materials
• 50% reduction in forecast CO2 emissions

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of International Affairs
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China’s Belt & Road Initiative: promoting best practice

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of International Affairs
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China’s Belt & Road Initiative: promoting best practice
‘The Belt and Road Initiative aims to promote the connectivity of
Asian, European and African continents and their adjacent seas,
establish and strengthen partnerships among the countries along the
Belt and Road, set up all-dimensional, multi-tiered and composite
connectivity networks, and realize diversified, independent,
balanced and sustainable development in these countries.’
Source: China’s National Development & Reform Commission, March 2015
To enhance the “greenness” of China’s outward investment, domestic
financial institutions and the multilateral development banks in
which China is participating should be supported and encouraged to
strengthen their environmental risk management and
develop green supply chain management (inter alia) in
implementing OBOR and other overseas projects.
Source: Guidelines for establishing the green financial system. August 2016

9. Special Project
Vehicle (SPV)
Government
(as procuring
authority)
Contractors
Debt investors
• Banks & others
Other sponsors
• Banks, private
equity funds, SW
funds, insurance
companies,
pensions
Government
(as sponsor)
Aid, public
sector
support
• MDBs, aid
agencies
Investors
(corporate
finance)
• Banks, ECAs
• Viability gap
funding
• Capacity
building
• Loans
• Grants
Equity
Loans
Loans, equity,
guarantees…
Subsidies,
grants,
guarantees…
Project
agreement
Contracts

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How banks can promote sustainable procurement
Investment
criteria
Environmental
policies
Procurement
policies
Capacity building
Sustainable
procurement

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Recent developments & best practice
Procurement policies: New policies encouraging / clarifying the
use of sustainable procurement by borrowers
Environmental policies: Linkages between safeguards /
environmental policies & procurement policies made more explicit
Investment criteria: Strengthening of targets for green investments
& integration of stronger environmental criteria in economic
assessments
Capacity building: Increasing resources for project development
and capacity building

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Opportunities & challenges
The opportunities
• Dynamic policy space
• New technologies & approaches for sustainable construction &
procurement
The challenges
• Limited expertise within public institutions
• Absence of tools or criteria to assess sustainability
• Limited market capacity
• Limited data on best practices

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Goal 9: Build resilient
infrastructure, promote inclusive
and sustainable industrialization
and foster innovation
‘Ramping up investment in sustainable infrastructure is
the growth story of the future… it can spur innovation,
creativity and efficiency of energy, mobility and logistics.
It can help to lay the foundation for sustainable
industrialisation.’
Source: The 2016 New Climate Economy Report. The Sustainable Infrastructure Imperative. Financing for Better Growth
and Development.

14. Thank you
Chatham House | The Royal Institute of International Affairs
alhoare@chathamhouse.org
www.chathamhouse.org