As the brutal reality of the Russian invasion of Ukraine is making clear, investors can no longer afford to ignore geopolitical risk, as commentators have made clear. Compartmentalising issues and attempting to avoid politics won’t wash.

This is particularly true with infrastructure projects where eye-watering costs and long lead times – plus the fact that schemes bake-in relationships and impacts for decades – mean the political stakes are already high.

The National Infrastructure Commission is an important voice for the long-term in the UK.  However, as Sustainability First’s response to their recent Baseline Assessment Report notes, this fails to mention geopolitical risk or cyber security, let alone the current cost of living crisis. These omissions need to be addressed. 

In a deeply uncertain world, understanding the political and social context in which any infrastructure is built, owned and operated is crucial, and cannot be done without considering wider geopolitics and the global climate crisis. 

For example, we need energy in our homes and businesses that is reliable and affordable while also addressing Net Zero and climate resilience. We need infrastructure that will enable both; connected renewable energy that reduces import dependency and increases security of supply. Coupled, of course, with strategic and joined-up sustainability programmes on energy and water efficiency. 

The latest IPCC analysis highlights the importance of inclusive, integrated and long-term planning, regulation and monitoring for infrastructure as a key area for adaptation to avoid climate disaster.  Adaptive planning and regulation, scenario planning and stress testing – within, and between sectors to address interdependencies – are vital. This is especially true of the water and energy sectors which can be inextricably bound together but are not always discussed in the same breath. 

Whilst starting to shift, current policy and regulatory approaches are still too often focused on price and short-term measures of efficiency and will not deliver the transformative environmental or social outcomes that we need. 

Infrastructure investment can clearly be a force for good.  It can enable the transition to a fair and green economy and help build resilience.  It can provide decent jobs, help us level up, and build connections between communities. 

But this can only happen once we acknowledge that infrastructure doesn’t operate in isolation from the citizens who use it and communities in which it operates.  This ‘social scaffolding’ is vital to build public support for investment, to help ensure communities are willing for works to be carried out and to build resilience for times of crisis.   

Inclusive engagement, with communities and workers, is a necessary precondition if utility companies are to gain and maintain a licence to operate. 

And the politics? At this time of crisis, at least in the UK, we need to ensure all political parties focus on the outcomes we need to achieve: a decarbonised economy that is sustainable socially and environmentally. Government can then set frameworks of principles that enable transformative change for sustainability.  

The fragility of our current systems is again being exposed. We need to ensure future infrastructure investment helps facilitate a fair and just transition to Net Zero and climate resilience in a way that improves all our well-being, not just the short-term returns of the few.   Investors need to put their money where ESG drives.  The risks are real and are crystalising.  And governments need to explain the short-term costs, and potential opportunities, for long-term resilience gain.