Environmental, social and governance (“ESG”) themes are becoming central in infrastructure projects. This emphasis permeates the chain of stakeholders including governments, public and private sponsors, lenders and advisors. Successful infrastructure projects are often a result of public-private cooperation, accompanied by stringent assessments and enabling regulations, not least on the ESG front.
The significance of ESG in infrastructure investments is evident in the United Nations Sustainable Development Goals (“SDGs”), which are adopted by all UN member states, including Singapore and a number of other Asian countries. Goal 9 of the SDGs sets out the importance of investments in infrastructure as a crucial driver of economic growth and development and it also illustrates the need for a balance of social, economic and environmental sustainability in infrastructure projects.
The need for such balance has been reinforced by the COVID-19 pandemic, which comes as a wake-up call to governments. In Asia, the pandemic has translated to a demand for higher quality, environmentally safer and more sustainable infrastructure projects.
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This article was produced in collaboration with Rajah & Tann Singapore.