Independent Project Analysis (IPA) has begun research to examine how companies and project teams address sustainability issues in capital projects, specifically collecting data on the strategies and practices that are used and how these practices compare with international standards.
The United Nations defines sustainability as “development that meets the needs of the present without compromising the ability of future generations to meet their needs.” Growing public awareness of environmental, social, and corporate governance sustainability issues is driving changes in what products consumers purchase, how companies do business, and how capital investment decisions are made. As such, IPA’s sustainability database, which contains over 30 projects from around the world at this time, is expected to grow over the coming months.
In the extractive industries (oil, gas, and mining), sustainability loosely refers to activities and investments with local stakeholders and communities that enhance the livelihoods of local inhabitants and minimize the environmental impact in areas where the company is active. In the project world of today, sustainability affects ultimate project success. Developing and maintaining a “social license to operate” is essential for successful asset operation, and often the pattern is set during the early phases of project development.
Sustainability covers many areas of operation, from economics and environmental to social and cultural issues. Examples include resettlement; employment training and job replacement; development of infrastructure (hospitals, roads, phone, electricity, water, airports, waste management, etc.); and protection of human rights, cultural patrimony, and other heritage issues. Sustainability is increasingly prominent and can be a large portion of the scope in terms of cost – in some instances as much as 50 percent of the project’s total installed cost.
Fred Biery, IPA Manager of Mining, Minerals, and Metals, is scheduled to share early IPA sustainability research results at the International Finance Corporation (IFC) 2012 Sustainability Exchange to be held in Washington, D.C., from May 22 to 24, 2012. Additional findings will be shared at various conferences and meetings held around the world. Check back at www.IPAGlobal.com for updates.