3.4 Environmental Pillar, TICCS®+

Infrastructure companies invest in large, immobile capital assets that have little to no alternative use. Given their significant physical footprint, they typically impact important areas of land and require substantial amounts of materials and natural resources to build, operate, maintain, refurbish, and decommission. Throughout their lifecycle, infrastructure assets thus impact all aspects of natural capital, from biodiversity to water, land, and the atmosphere.

Indeed, as the backbone of modern economic activity, the ultimate role of infrastructure is often to support the consumption of energy by economic agents engaged in activities that require considerable amounts of energy, the vast majority of which is currently sourced from fossil fuel. Hence, most infrastructure contributes to greenhouse gas emissions to a degree.

Infrastructure assets are also exposed to multiple environmental risks based on their location, design and activities. Their rigid and static nature implies that acute and chronic physical risk events can cause significant damage to assets. Physical hazards can render the infrastructure asset inoperable (flooded roads as a result of a severe precipitation event), cause damage to the asset (damaged road as a result of a landslide) or to the supporting infrastructure (damaged pipeline that supplies water to a coal power plant). Environmental degradation may also limit or prevent an infrastructure from functioning normally if certain natural resources become unavailable (e.g. water used as coolant in a power station).