Thomson Reuters - Defining and Measuring Performance by Sumeet Manchanda at GIB Summit

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Presented at the 4th Global Infrastructure Basel Summit 21 & 22 May 2014.
Read more about the world leading platform for Sustainable Infrastructure Finance at www.gib-foundation.org.
Next Summit: 27 & 28 May 2015 in Switzerland

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Thomson Reuters - Defining and Measuring Performance by Sumeet Manchanda at GIB Summit

  1. 1. Defining and Measuring Performance for Sustainability in Infrastructure Development Global Infrastructure Basel, 21 May 2014
  2. 2. Agenda Main question Performance based contracts take us some of the way but do we need to go further – challenging but necessary Comments • Performance based contracts • Definitions – what should we mean by performance in sustainable infrastructure? • Measurement for sustainability – what can, and/or should we measure? • Challenges and opportunities Notes: High level, abstract, stating the obvious 2
  3. 3. Performance based contracts - flexibility Waste infrastructure solutions -Moving from recycling outcomes to carbon performance -Can be met through variety of infrastructure solutions -High waste reuse + incineration + landfill -High recycling + landfill -Recycling + AD + gasification and fuel preparation Waste infrastructure solutions -Moving from recycling outcomes to carbon performance -Can be met through variety of infrastructure solutions -High waste reuse + incineration + landfill -High recycling + landfill -Recycling + AD + gasification and fuel preparation Energy efficiency in buildings -Energy performance leading to payback and carbon outcomes -Can be met through different technologies -Challenges in asset ownership/ leasing, financing and asset transfer Energy efficiency in buildings -Energy performance leading to payback and carbon outcomes -Can be met through different technologies -Challenges in asset ownership/ leasing, financing and asset transfer Energy generation -Energy generation and carbon performance -Can be met through different ways e.g. Combination of low carbon, renewable and fossil fuels Energy generation -Energy generation and carbon performance -Can be met through different ways e.g. Combination of low carbon, renewable and fossil fuels
  4. 4. Infrastructure that facilitates triple bottom line Investor economic returns GDP Asset creation Facilitation of wider economy Investor economic returns GDP Asset creation Facilitation of wider economy Climate change mitigation/ adaptation Natural resource consumption/ depletion Pollution Climate change mitigation/ adaptation Natural resource consumption/ depletion Pollution Livelihoods protection/ creation Skills creation Empowerment/ choice/ opportunity Health impacts Livelihoods protection/ creation Skills creation Empowerment/ choice/ opportunity Health impacts EconomicEconomic EnvironmentalEnvironmental SocialSocial
  5. 5. Project level considerations DevelopmentDevelopment ConstructionConstruction OperationOperation De- commission De- commission ConsiderationsConsiderations Energy Waste Water Biodiversity Materials Livelihoods Transparency Governance etc. Energy Waste Water Biodiversity Materials Livelihoods Transparency Governance etc.
  6. 6. Outcome based measurement – difficult. National policy level e.g. National Green Accounts India proposal “Basis for economic evaluation should be comprehensive notion of wealth”: •Reproductive capital •Human capital •Natural capital National policy level e.g. National Green Accounts India proposal “Basis for economic evaluation should be comprehensive notion of wealth”: •Reproductive capital •Human capital •Natural capital Policy/ Project Level e.g. UK Green Book Methodology Attempts to quantify and monetise different project benefits to generate a societal IRR Examples: Carbon reduction, job creation, etc. Example of considerations: displacement, leakage, additionality Policy/ Project Level e.g. UK Green Book Methodology Attempts to quantify and monetise different project benefits to generate a societal IRR Examples: Carbon reduction, job creation, etc. Example of considerations: displacement, leakage, additionality Outcome Level e.g. Energy, Carbon and Cost reduction -Persistence factors -Technology replacement timings Outcome Level e.g. Energy, Carbon and Cost reduction -Persistence factors -Technology replacement timings
  7. 7. Challenges and opportunities • Challenges – Difficulty in measuring e.g. Natural capital. (value of one village pond will be different from another as depends on the context) – Metrics not fully developed/ not widely known – High resource capacity required to perform comprehensive measurements and monitoring • Opportunities – Tools do exist to help – carbon and ecological footprinting; ecosystem services valuation; social impact assessment tools – Considerable opportunity to improve natural and human capital rather than ‘avoid or mitigate negative outcomes’ - public sector risk-sharing role can facilitate this
  8. 8. THANK YOU! Sumeet Manchanda Sumeet.Manchanda@thomsonreuters.com
  9. 9. Disclaimer A Point Carbon publication Copyright © 2014, by Point Carbon, a Thomson Reuters Company All rights reserved. No portion of this publication may be photocopied, reproduced, scanned into an electronic retrieval system, copied to a database, retransmitted, forwarded or otherwise redistributed without prior written authorization from Point Carbon. See Point Carbon’s “Terms and Conditions” at www.pointcarbon.com The data provided in this report were prepared by Point Carbon’s Advisory Services division. We have used publicly available materials and referenced them accordingly. Publications of Point Carbon’s Advisory Services division are provided for information purposes only. Prices are indicative and Point Carbon does not offer to buy or sell or solicit offers to buy or sell any financial instrument or offer recommendations to purchase, hold or sell any commodity or make any other investment decision. Other than disclosures relating to Point Carbon, the information contained in this publication has been obtained from sources that Point Carbon believes to be reliable, but no representation or warranty, express or implied, is made as to the accuracy or completeness of this information. The opinions and views expressed in this publication are those of Point Carbon and are subject to change without notice, and Point Carbon has no obligation to update either the opinions or the information contained in this publication. 9
  10. 10. Disclaimer A Point Carbon publication Copyright © 2014, by Point Carbon, a Thomson Reuters Company All rights reserved. No portion of this publication may be photocopied, reproduced, scanned into an electronic retrieval system, copied to a database, retransmitted, forwarded or otherwise redistributed without prior written authorization from Point Carbon. See Point Carbon’s “Terms and Conditions” at www.pointcarbon.com The data provided in this report were prepared by Point Carbon’s Advisory Services division. We have used publicly available materials and referenced them accordingly. Publications of Point Carbon’s Advisory Services division are provided for information purposes only. Prices are indicative and Point Carbon does not offer to buy or sell or solicit offers to buy or sell any financial instrument or offer recommendations to purchase, hold or sell any commodity or make any other investment decision. Other than disclosures relating to Point Carbon, the information contained in this publication has been obtained from sources that Point Carbon believes to be reliable, but no representation or warranty, express or implied, is made as to the accuracy or completeness of this information. The opinions and views expressed in this publication are those of Point Carbon and are subject to change without notice, and Point Carbon has no obligation to update either the opinions or the information contained in this publication. 9

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