Owners and operators of infrastructure have always had to meet varied expectations of users and local
communities, public authorities and, often, regulators. Where an asset is owned and/or operated by a
private company,
expectations are further altered and complicated
by the need to ensure a fair return for investors.
Earning the trust of all stakeholders is a challenge,
but maintaining it through the lifetime of an asset
is even more difficult.
As an important factor in enabling productive long-term relationships with stakeholders, trust not
only confers private infrastructure owners and operators with a social license to operate but also
assists in building a solid track record, ensuring industry credibility and establishing
organizational resilience.
Infrastructure assets provide essential services to support the functioning of
society and economies. The expectations of different stakeholders play a critical role in driving the
agenda of owners and operators.
Governments and regulators seek tangible societal benefits and support for national
economic growth. They also expect an appropriate balance between consumer prices, long-term resilience
and shareholder returns.
Users and communities expect safe and reliable services at a manageable cost. They
also expect transparency regarding key asset development decisions.
Investors expect solid and steady financial performance that anticipates changes in
market demand and regulation. They also seek transparent risk and ESG reporting.
Infrastructure assets provide essential services to support the functioning of society
and economies. The expectations of different stakeholders play a critical role in
driving the agenda of owners and operators.
Governments and regulators seek tangible societal benefits and support for national
economic growth. They also expect an appropriate balance between consumer prices,
long-term resilience and shareholder returns.
Users and communities expect safe and reliable services at a manageable cost. They also
expect transparency regarding key asset development decisions.
Investors expect solid and steady financial performance that anticipates changes in
market demand and regulation. They also seek transparent risk and ESG reporting.
Three dynamics are complicating the trust challenge for owners and operators. Understanding
these ongoing trends is the first step in mitigating their potential impacts. Taking action to
address the underlying issues will ultimately protect a business against cascading impacts.
Pandemic Recovery
The steep decrease in demand for many infrastructure assets during the pandemic has had profound
effects on revenue and profit, in many cases causing delays in planned capital expenditures.
Uncertainty remains regarding when or if demand will return to pre-pandemic levels. Government
subsidies for new infrastructure have often been tied to its potential to bolster economic
recovery, national resilience, and security.
Accelerating impacts of climate change
With climate change infrastructure becomes more exposed to physical risks, both in terms of
extreme weather events and chronic climatic trends. Mobilizing investments in resilience is
increasingly urgent. A wide range of transition risks are emerging, creating concerns over
the possibility of stranded assets and posing new liability and reputational risks. Many
stakeholders are demanding low-carbon assets with minimal environmental damage to construct and
operate, and transparent reporting on climate metrics.
Heightened cyber threats
Technological innovations continue to offer infrastructure owners and operators outsized gains in
efficiency, cost savings and more. However, data proliferation and the associated increase in
digital connectivity come at a cost. Assets face substantial risks from increasingly
sophisticated threat actors who can disrupt operations and steal or misuse customer data.
.
The pandemic has impacted some infrastructure sectors more than others.
Whilst digital infrastructure has thrived, transportation has faced many challenges.
As demand returns, concerns about service reliability and health and safety can create trust issues
with users and potential knock-on risks for investors.
Although government subsidies are intended to drive economic recovery...
... It is unclear whether they will help existing infrastructure businesses or harm
them by creating substitutes and alternatives. This may cause worries among investors regarding returns and
asset valuations.
Physical damage can trigger cascading failures that lead to loss of trust from users
and communities, and complicate relationships with investors and public sector authorities.
Assets are often not designed to withstand future, and even current, climate
conditions.
Uncertainty surrounding the pace and direction of decarbonization can translate into
an unwillingness to invest in climate adaptation measures and exacerbate pre-existing concerns about the
ability of firms to make necessary transformations.
Data proliferation and increasing asset connectivity have created new
vulnerabilities to cyber threats. Data privacy and security risks can challenge the credibility of
owners and operators.
Cyberattacks can cause failures of critical infrastructure that sometimes are excluded
from traditional insurance policies, raising concerns regarding resilience and preparedness
among investors and public authorities.
The pandemic has impacted some infrastructure sectors more than others.
Whilst digital infrastructure has thrived, transportation has faced many challenges. As
demand returns, concerns about service reliability and health and safety can create
trust issues with users and potential knock-on risks for investors.
Although government subsidies are intended to drive economic recovery...
... It is unclear whether they will help existing infrastructure businesses or harm them
by creating substitutes and alternatives. This may cause worries among investors regarding
returns and asset valuations.
Physical damage can trigger cascading failures that lead to loss of trust from users and
communities, and complicate relationships with investors and public sector authorities.
Assets are often not designed to withstand future, and even current, climate
conditions.
Uncertainty surrounding the pace and direction of decarbonization can translate into an
unwillingness to invest in climate adaptation measures and exacerbate pre-existing
concerns about the ability of firms to make necessary transformations.
Data proliferation and increasing asset connectivity have created new vulnerabilities to
cyber threats. Data privacy and security risks can challenge the credibility of owners
and operators.
Cyberattacks can cause failures of critical infrastructure that sometimes are excluded
from traditional insurance policies, raising concerns regarding resilience and preparedness
among investors and public authorities.
Learn more in our report
Private infrastructure owners and operators can respond to evolving expectations from
stakeholders
linked to
the challenges posed by the pandemic recovery, climate change, and cyber risk by reimagining
partnerships
with stakeholders and identifying new opportunities for collaboration. Adapting to a rapidly
changing
regulatory environment is essential to minimize liability and reputational risks. Investing in
new tools
and
technologies to enhance resilience is another critical step.
