Sustainable capital projects: Assembling the right pieces to build for the future

When it comes to delivering the capital projects that will put your company’s—not to mention the planet’s—decarbonization commitments within reach, business as usual isn’t good enough. More than 60% of global emissions come from energy, transport, buildings and water infrastructure, according to the Organisation for Economic Co-operation and Development (OECD). Clearly, an entirely new approach to planning, collaboration and execution will be needed. Bringing together a diverse set of capabilities—including digital experience, tax and supply chain management, among others—at the earliest stages can unlock the potential of these projects.

Teaming and alliances are the way forward

The margin for error is slim. There are many of these highly complex projects in the pipeline, and the resources, manpower and supply chain capacity needed to complete them are in short supply. Project delays can put your climate change and other environmental, social and governance (ESG) goals at risk. The same is true for a project that’s delivered on time but doesn’t make good on its promises to reduce its owner’s climate impact. The result: wasted money, reputational damage and disappointed investors, customers and other stakeholders.

Excellence in core engineering, procurement and construction (EPC) capabilities is necessary but not sufficient in isolation to meet this challenge. The projects that will help achieve a company’s net zero commitments won’t benefit from traditional contracting approaches. To achieve leading edge results, understand that it’s crucial to take a multidisciplinary, cross-functional approach from the beginning. In other words, convening the right players from Day One—and providing effective coordination and oversight—can make all the difference. It’s often assumed that technology, tax and finance, reporting and supply chain management are considerations that can wait until after a project is launched. In reality, that approach often increases risk and leads to delays.

When a project is essential to meeting a decarbonization goal that’s just over the horizon, speed is critical. Many companies are making significant infrastructure investments in support of their efforts to decarbonize their businesses. Yet challenges associated with supply chain disruption, lack of manpower and sheer volume of investment are creating new problems that demand a different approach. To meet science-based targets, minimizing the time between conceiving a project and putting it into operation matters greatly. The only way to achieve these aggressive targets is through alliances, teaming and novel approaches to contracting.

“The level of net zero-related capital spending far exceeds the industry’s capacity to deliver, so new delivery approaches are required. These approaches will need bold thinking and a shift in the traditional program delivery paradigm."

Daryl Walcroft,Global Leader, Engineering and Construction, PwC US

The pillars of next-gen capital projects

Planning for these foundational capabilities from the inception of a project can help make sure that it’s delivered on time and fulfills its sustainability promises.

Digital

Technology is transforming the capital projects and infrastructure space. Integrating digital and cloud technologies with physical infrastructure is key to delivering efficient, connected and agile assets across the project life cycle. It’s not just about collecting the right data, but analyzing it and turning it into insights that can inform strategy and provide transparency that enables owners to demonstrate compliance with ESG mandates and goals.

Reporting

Now more than ever, public company stakeholders expect a clear picture of their climate impact. New rules proposed by the SEC will require companies to increase disclosures in this area. Even without these requirements, however, the expectations of crucial stakeholder groups have never been higher. Institutional investors, employees and customers are all seeking greater transparency. That’s why reporting should be a consideration from the very beginning of a project.

Supply chain management

Without careful planning, sourcing decisions can undermine a project’s contribution to decarbonization goals. To help reduce this risk, it’s important to have the ability to assess and mitigate supply chain emissions from the very beginning of a project. Remember, however, that emissions aren’t the only ESG challenge in the supply chain. Responsible sourcing and fair labor practices are also key issues that should be addressed at the start. It isn’t just about sustainability—a greener supply chain is also a more resilient one.

Governance and oversight

Capital projects that help put sustainability goals within reach require a diverse team of specialists. But who will make sure they are all working together effectively? It’s important not to neglect project governance. Putting the right systems and structures in place at the outset can keep all the players in harmony.

Building greener, from the foundation up

Bringing all these pieces together at the beginning of a project can help you get it built faster, more efficiently, more transparently and with better risk management. That can help it start contributing to financial and sustainability goals faster. Baking these critical capabilities in from the start also helps reduce the likelihood of costly missteps. Take the supply chain as an example. Considering responsible sourcing and supply chain resilience at the beginning of a project can help you see to it that materials that contribute to, rather than detract from, the project’s ESG goals are available on schedule. Moreover, a smarter approach to teaming and alliances doesn’t just pay dividends at the beginning of a project. The benefits continue throughout its life cycle.

For companies with emissions goals that hinge on capital projects, the stakes are high. Hitting decarbonization targets is important to regulators, shareholders, customers and employees alike. Many such targets are rapidly approaching—and many may be less than a decade away. Delayed or underperforming projects carry significant risk.

That’s why it’s essential to assemble the right team from the very beginning. Your team should include experience and disciplines that may not always be considered early in the project life cycle. Large programs designed to help companies meet decarbonization goals can be most successful if owners, delivery partners and service providers think differently—and broadly—about the contracting and delivery approach. Doing so can help you be sure that all the right pieces are in place for success.




Ready to get started? Here are a few steps to consider:

  • Identify areas of collaboration across disciplines early in the project life cycle
  • Couple business specialists with the program delivery team
  • Establish a proven, scalable technology platform at the outset of the project

Contact us

Casey Herman

Casey Herman

US ESG Leader, PwC US

Daryl  Walcroft

Daryl Walcroft

Principal, Capital Projects & Infrastructure Leader, PwC US

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