For Building a better world: Transforming with Sustainability & Innovation as devised in an Arcadis blog article by an experienced professional could be a wise roadmap for all.
The image above is about This software-enabled energy-efficient electric motor is just one example of ESG investing at work behind the scenes (photo courtesy of Turntide Technologies).
Our world today is faced with significant challenges. Less urban spaces for growing populations. Energy supply disruptions and increasing energy bills. Hotter summers and harsher winters. Rising sea levels in coastal zones and heightened drought conditions in other areas. With so many shared challenges, there are opportunities to overcome them if we remove the constraints that are holding us back. Are we standing in our own way?
The last five years have seen the dawn of a new reality for the design, engineering and consultancy industry. While the pandemic slowed down projects, impacting budgets and forecasted work in some industries; our sector saw the decades-long traditional business operating model pushed to evolve, leading to new revenue streams and subsequently, the demand for an evolving, highly skilled talent base.
And with fast-approaching net-zero targets and new policies and regulations around environmental, social and governance (ESG) considerations, our industry is faced with increasing pressure to adopt new technologies and sustainable practices at pace with the transformation ahead.
We are at a critical juncture, and there are also huge market opportunities to thrive in tomorrow’s world. To truly change, global collaboration and integrated projects are the way forward. Practically this would mean moving beyond ‘time and materials’ contracts to explore more agile and attractive business models. We can’t do it alone.
Our efforts as designers, engineers, scientists and consultants to action transformative progress can only be fruitful if clients too are willing to evolve and incentivize change. It makes business sense too. Over the last five years, stock funds that were weighted towards companies with positive ESG scores have outperformed across global markets1. Inaction today will not only hurt the world, but also our collective ability – clients and consultants alike – to benefit from investing in tomorrow.
There has been some progress. From the increased adoption of technology and automation in projects, to shifts in consumer preferences for sustainable and socially conscious businesses and purchase decisions. While all this has led to changing expectations around types of services, it hasn’t yet shifted the dial far enough on ‘delivery’ mechanisms, how we are contracted to work and business partnership and incentive models to meet these trends. Therein lies the biggest opportunity for us to move the needle.
Digitalization – reshaping processes and solutions
According to PwC2, by 2030, up to 45% engineering activities could be automated using advanced technologies like Artificial Intelligence (AI), likely leading to significant productivity gains and cost savings. The Economist’s World Ahead 2023 analysis unpicked ‘Mixed Reality’ as an important trend. Advanced language models too, can be particularly beneficial in consultancy work in identifying data patterns, and generating insights for informed recommendations and decision making3. Are we ready to unlock the full potential of fast-evolving developments like this?
Data analytics and innovative technologies can improve project delivery, providing opportunities for improved decision making, collaboration, communication, and greater accuracy. In cities, for example, implementing AI systems will reduce water waste and predict demand more accurately, with smart meter installations expected to grow 28% by 20264. At Arcadis, we are already seeing promising pilots in the City of Canton, Ohio. By integrating data sources and running AI models, we have developed digital twins that create a virtual model of the utility company’s water distribution system, helping them reduce water loss by analyzing data to identify leaks in real-time, significantly earlier than could previously have been found.
Sustainability and ESG considerations have been driving forces for the transformation of various sectors. For example, as the demand for renewable energy increases aligned with net zero goals, engineering and design firms are increasingly advising on decarbonization strategies and projects related to solar, wind, and other forms of clean energy. The automotive industry is also undergoing a significant transformation as electric and autonomous vehicles become more prevalent. And the built environment sector is seeing a trend towards green buildings, retrofitting existing buildings and livable urban spaces.
An integrated project approach
Mega trends like climate adaptation and rapid urbanization are pushing businesses to realize that solutions to these problems cannot be achieved in isolation. For example, to solve decarbonization and reduce energy use, we are seeing much greater collaboration and integration between energy users across all sectors, including buildings, transport, and industry, with power producers and utility providers. Projects too are moving in a similar trend, with fast-changing regulatory, societal and market environments adding pressure. Clients are looking for partners who can work shoulder-to-shoulder with them through all stages of a project, from co-creating strategies through to implementation, making sense of the evolving landscape and the business case for investment. In the UK, for example, we are supporting Transport for North which covers cities including Manchester, Liverpool and Leeds with their decarbonization strategy, providing them with confidence that they are future proofed as they look to act on climate change.
All this is also leading to a shift in mindset – from focusing purely on siloed projects to wider solutions that integrate responses to water, energy and climate challenges. There’s a huge benefit in this integrated, systems-thinking approach. By 2050, the integration of sectors such as energy, transport, and buildings could result in cost savings of up to €200 billion per year in the European Union5 alone. And, from a socio-economic perspective, the integration of services such as water, wastewater, and climate resilience is key to achieving sustainable resilience in cities, posing a strong future business opportunity6, as demonstrated by the Wuhan Sponge City program.
While we have certainly transformed over the last few years, the question remains: are we moving fast enough? What practical steps can we take to adapt today so that we can continue thriving in the future?
Let’s be honest, the biggest needle movers of our time are sustainable practices, powered by innovation and digital tools that build resilience into our cities. As an industry, we have a significant opportunity to help mitigate the impacts of climate change through a focus on sustainable development and operations. However, with the IPCC warning that we are already falling behind, urgent action is needed to accelerate efforts. Projects need to have a more holistic, integrated approach, also considering the impact on society, particularly as challenges like climate change, water scarcity and energy affordability disproportionately affect vulnerable communities. This urgency requires immediate action from all stakeholders to create a more sustainable future for all. Considering nature and biodiversity, carbon emissions, and social impact in the planning and implementation of projects should be a given. Planning resilient cities will be key.
There is no single solution or organization that has all the answers. But collective working and partnering with other like-minded organizations can help the industry progress. For instance, digital disruptors bring to the table new technologies and a unique understanding into consumer buying behaviors and preferences. These present data and pain point insights which, if used effectively, will not only bring value at various stages of the project, but also help create better, more inclusive solutions for all. And we need to be bolder about the risks we take. New solutions like ChatGPT may seem intimidating, but if used effectively, can enhance processes and free up time for value added work. Working together and putting aside differences to achieve these common goals, supported by modern technologies, can help truly accelerate our industry’s transformation.
How are we creating the right environment, business models and opportunities for the transformation needed?
Building a strong talent pool, into the future: By 2028, one-third of skilled workforce will retire at a faster rate than younger workers enter the field to replace them, leaving more than 3 million skilled trade jobs unfilled7. Our industry and clients are seeing the greatest workforce transition of our time – with capability availability, early retirement and gig working being areas of concern that we need to anticipate and be ready for. These pose both a challenge, and a prospect. While there’s loss of institutional knowledge, there’s also an opportunity to drive ground-up change and new ways of thinking. Focusing on an agile workplace with space to develop and upskill will be key in creating employer attractiveness and ensuring we have the right people working on the right projects. We too are seeing this transformation and are taking steps to stay ahead. Arcadis’ Global Collaboration Policy, for instance, removes barriers to collaboration, cross teams and cross borders. And, through Arcadis programs like Digital Base Camp, Sustain Abilities, the Energy Transition Academy and Quest, powered by the Lovinklaan Foundation, we are investing in a learning platform for people to upskill in sustainability and digital, and also, expand their skillsets and learn-on-the-job from other teams through funded experiential project work.
But that’s not enough. We need to relook at how our industry operates, and get more hands-on-deck to help lead our industry’s transition. Consultants and clients alike need to be comfortable with being uncomfortable, taking measured risks with new ways of working and business models. To create space for sustainable practices, innovation and development, our traditional business model needs to shift from purely billable hours towards recognizing the value provided by employees. And leverage partnerships to go further. Finding partners to co-create with us can provide access to complementary skills, shared resources, and help us expand our market reach. Together, we can spark new ideas and solutions that may not have been possible otherwise, like our eCATS team in the Netherlands did when developing an innovative solution to transform redundant natural gas infrastructure for renewable energy storage.
The challenge ahead may seem daunting, but the time to act is now. We must be open to taking risks and testing new pilots and technologies, bold in our commitments around sustainability and willing to try new partnerships to accelerate our industry’s transition. Thriving in tomorrow’s world requires action today – no one organization has all the answers, but collectively, we can create solutions for a sustainable future.
Looking ahead, we’ve taken the best ideas, innovations and examples of integrated projects to shape six strategic pillars that can be considered to thrive in carbon neutral and prosperous cities of the future: Explore our perspective: ‘Charged up for Change’
The goals look ready-made for thematic funds, but can they be properly aligned to an investment framework?
By Theo Andrew
The Sustainable Development Goals (SDG) continue to capture the imagination of ETF issuers but questions have been raised about the ability to properly align them to an investment framework.
Used by both active and passive funds, they were thrust into the spotlight again in January after DWS launched a seven-strong range of thematic ETFs targeting the SDGs it believes “present a growth story”.
Other ETF issuers have also launched products tracking SDGs, albeit not so inextricably linked to the goals, including the L&G Clean Water UCITS ETF (GLUG), the iShares Global Water UCITS ETF (IH20) and the BNP Paribas Easy ECPI Circular Economy Leaders UCITS ETF (REUSE).
The goals comprise 17 interlinked objectives, including no poverty, zero hunger and clean water and sanitation, which aim to serve as a blueprint to advance global progress for “peace and prosperity” for the planet.
However, while offering a strong narrative to pitch to investors, many have questioned the validity of using the SDGs as an investment framework.
Kenneth Lamont, senior fund analyst at Morningstar, said he understood some of the concerns around using SDGs as an investment framework but added it was part of a broader problem around impact investing with ETFs.
“The question mark hanging over SDGs is part of the broader question of whether you can use ETFs to invest impactfully. Investors need to be able to measure that impact, that is the goal of the investment,” he said.
“Generally, it is questionable whether investors can ever have a real impact by investing in listed stocks.”
Stuart Forbes, co-founder at Rize ETF, agreed, adding the SDGs were not designed for public or private market investment.
“The way the goals are measured is through a series of indicators such as decreasing deforestation and habitat loss. It would be almost impossible to assess a company’s contribution to forestation in Brazil or Indonesia,” he said.
“The further you go with SDGs from an investment and thematic perspective, it is just not possible to align.”
Forbes said Rize ETF explored the idea of launching products linked to the goals, looking at SDG alignment tools, but that they “just do not make any sense”.
“Looking at what the funds are holding, they are almost all developed market economies, they are not servicing an underserved region of the world or having a significant social impact,” he added.
For example, DWS uses MSCI’s SDG alignment tools designed to provide a “holistic view” of companies’ net contribution towards addressing each of the SDGs.
However, Lamont added the thematic element of the SDGs is what makes them attractive. For example, he noted GLUG’s thematic approach, investing in companies’ infrastructure and technology.
“I find GLUG interesting because it does focus a lot on water technology. It is a completely different set of stocks that are actually trying to solve the problem. It is much more of a thematic approach than the traditional water sector fund.”
DWS also includes a thematic element to its SDG range, with sustainable revenue accounting for 75% of the MSCI indices it tracks, while the remaining 25% will be calculated using forward-looking thematic metrics.
Speaking to ETF Stream ahead of the launch in January, Olivier Souliac, senior Xtrackers product specialist at DWS, said it chose not to do all 17 SDGs due to the inability to align them all within an investment framework.
“The reason we have a revenue-based approach is that some of the SDGs such as zero hunger and education can only really be filled by society and governments and are not themes in the sense of being growth stories,” he said.
AI in Smart Cities is turning out to be of great help as demonstrated here in an AITHORITY article.
The image above is of Microsoft.
The evolution of Smart Cities has been inspiring and remarkable to watch. In the recent past, a typical resident might not have found the technical description of a smart city all that enticing, but today, citizens are more aware and more conscious. They are far more concerned about the environment and climatic changes.
Government and civic agencies across various countries, with the help of state-of-the-art artificial intelligence technology, are focusing on reducing carbon footprints, improving infrastructure, and meeting the sustainability goals of smart cities.
Did you know that according to a report by McKinsey Global Institute, ‘Smart Cities’ have the potential to refine the basic quality of life by 10-30%? It can reduce crimes, lower carbon emissions, better health management and improve traffic management and deliver an enhanced quality of life.
McKinsey Global Institute’s report stated that cities house more than half of the world’s population, and another 2.5 billion people are predicted to move there by 2050.
Today, artificial intelligence and the Internet of Things (IoT), the two concepts that have a major role to play in the development of Smart Cities, are better understood.
Let’s begin by understanding the definition of a Smart City. Smart Cities are an intelligent culmination of data and digital technology. They are synonymous with intelligent economic and civic infrastructure with minimal carbon footprints.
It ensures that its citizens enjoy cutting-edge technology, utility, and mobility while eliminating bureaucratic red tape. At the end of the day, a Smart City’s ultimate goal is to improve people’s quality of life, simplify living, boost economic growth, and contribute to its long-term development.
But, is it enough for cities to just fall under the Smart Cities bracket and do little to meet their sustainability goals? That’d be a very unlikely situation. Smart Cities can only be successful if they are built keeping the people as well as the environment in mind.
According to Unesco,
“A smart sustainable city is an innovative city that uses ICTs (information and communication technologies) and other means to improve quality of life, the efficiency of urban operation and services, and competitiveness while ensuring that it meets the needs of present and future generations with respect to economic, social, environmental as well as cultural aspects.”
From more accessible, efficient services to lowering people’s overall carbon footprint, the many smart city technologies now available and on the horizon might cut expenses, increase safety, better protect the environment, and improve our quality of life.
Intelligent Traffic Management systems can help to alleviate traffic congestion by warning vehicles of bottlenecks and delays. Using Deep Learning algorithms, it can predict and reduce traffic, hence lowering carbon emissions. Traffic infraction detection systems and AI-enabled cameras can drastically minimize road accidents.
AI is used to evaluate real-time traffic data from cameras and IoT devices, such as vehicles like cars, buses, and trains. It recognizes patterns in data and decreases safety hazards and reoccurring accidents, as well as controlling traffic light systems.
Artificial intelligence is rapidly transforming the world around us, and smart city technology, such as parking management and traffic control systems, is one of the most effective answers it offers. With the use of artificial intelligence, one may properly forecast the flow of people, cars, and objects at various locations of interconnected transportation networks.
Parking has always been one of the major concerns for urban residents, and spending even five minutes looking for a parking spot can be overwhelming. Smart parking spots will allow commuters to reserve parking reservations through a mobile app, reducing the amount of time spent looking for parking spots, cutting urban traffic, lessening our carbon footprint, and conserving gasoline.
AI video analytics can detect the number of vehicles and identify parking lines, thus helping in predicting vacant parking spots. This system comes especially handy when a big public event, concert, or game is about to take place and there are high chances of congestion and struggle to park. AI can assist in identifying likely busy regions and recommending the best parking spots. It can assist drivers in avoiding traffic and saving time.
By now, several countries are already leveraging intelligent parking systems to help their citizen save time as well as money. The parking system first spots vacant parking and notify through an app or an indicator. It can also assist in locating available parking spaces in congested places where traffic flow is frequently excessive.
This innovative parking solution collates data from different devices including sensors and cameras. Most of the time, these devices are embedded into the parking lots or are somewhere in proximity to instantly locate vacant spots.
Infrastructure data is truly a blessing. It empowers smart cities as well as different modes of transportation. Today, people have the luxury to opt for alternative transportation like e-bikes, and electric vehicles. Benefit from the usage of 4G, 5G, and IoT sensors to better analyze traffic patterns, trends, and effects through AI, cutting travel time, reducing unproductive idling, and lowering total climate impact.
In electric cars, AI assists in the control of energy consumption, safety, security, and the construction of a pollution-free eco-friendly environment, which is a wish of today’s and tomorrow’s civilizations.
Recently, computer giant Acer launched e-bikes powered by advanced artificial intelligence. The bike, aimed at urban commuters, weighs only 16kg and has been calibrated for “stable and nimble riding,” according to Acer. The intelligent ebiiAssist learns from the rider’s pedaling force, riding circumstances, and chosen level of help to provide a more personalized experience.
Is it even possible to fathom a smart city without thinking of a smart Energy Management System (EMS)? Now the next question is, what is energy management based on? Mostly, it is based on cutting-edge climate and geospatial technology powered by AI and data analytics. They have the ability to improve our reaction to climate change as well as the overall environmental quality of smart cities.
Energy Management System is a software-based solution that assists companies and businesses in monitoring, controlling, and optimizing their energy usage. Some of the top players in the global energy management systems market are IBM Corporation, General Electric Co., Cisco Systems Inc., and Siemens AG.
Consumers and businesses are becoming more conscious of the environmental impact of their actions and are seeking for solutions to lower their carbon footprint. This is driving the use of EMS solutions as a means of reducing energy consumption and meeting sustainability goals. The growing popularity of smart homes and buildings is driving the use of EMS solutions in the building automation market.
According to Vantage Market Research, the global energy management systems market was valued at $36.4 billion in 2021 and is predicted to rise at a compound annual growth rate (CAGR) of 15.8% from 2022 to 2028.
According to the American Water Works Association, the 237,600 water line breaks that occur in the United States each year cost public water utilities around $2.8 billion.
According to the American Society of Civil Engineers, aging, leaking pipes drain 7 billion gallons every day from our water systems. The World Bank estimated that non-revenue water (NRW) – the cost of water lost due to leaks, as well as standard theft and billing problems – is approaching $14 billion globally.
The World Bank estimated that non-revenue water (NRW) – the cost of water lost due to leaks, as well as standard theft and billing problems – is approaching $14 billion globally.
These numbers are worrisome. But, we have smart technologies to fix it. In the past decade, smart water meters have been the highlight of this evolution. Water losses in municipal water systems could be drastically reduced with the help of sensors and modern artificial intelligence (AI) technology.
Air pollution has a negative impact on millions of individuals around the world and global solutions are the only way to address these global issues. Artificial intelligence is a practical technique to dealing with and reducing air pollution. AI can collect sensor and satellite data and assist academics in the blending of climate models.
Let’s take a look at how artificial intelligence-based solutions for cleaner air.
AI technologies can greatly help government organizations and commercial firms by monitoring air purity levels and alerting personnel if air quality falls below a specific threshold.
A smart city has a wide range of components, and each one has its effects on the quality of urban dwellers. How we live, work, and play will change as smart cities grow and become more connected. From weather monitoring and pollution management to saving energy and water and waste management, Smart Cities may be a work in progress but they are gradually becoming the epitome of urban living.
An annual check-up for the climate movement on the daily Gulf Times of Qatar might seem at odds with the country’s specifics, but the wise words of the author would certainly be taken into account.
The image above is of INDIA Times