Hello, my name is Ryan Prime. And I'm the sustainability director for a large multinational heavy civil construction company called Skanska USA Civil. I'm gonna be talking to you today about sustainable development as it pertains to construction industry. Over the last ten years I've seen the definition of sustainable development, or more casually referred to as sustainability. Change quite frequently and quite broadly as projects come online and lessons are learned. So we're gonna touch on the definition of what sustainability is today in the market. And we'll get into some of the key concepts moving forward. So here's today's agenda. I'm gonna briefly talk about project delivery methods. And what I mean by project delivery is how a project is awarded. And that's important because how a project's awarded is gonna determine the risk allocation, and risk allocation is essentially who's got the risk. I'm gonna define sustainable construction, both traditionally and the definition that the industry is giving it today. We're gonna talk a little bit about how sustainability is measured. And bullet point four gives the answer to that question away a little bit by saying that they're typically rating systems out there. I'm gonna do a deep dive into one particular rating system, which is unique to public infrastructure projects, and that is the Envision rating system. And I'm gonna end speaking a little bit about the future of the industry and where it's headed and any opportunities that are presenting themselves today. So let's talk a little bit about project delivery. And I know there's another module in this lecture that is gonna go into quite deep detail on this, so I'm just gonna skim the surface. You got three main ways a project is awarded. We have a bid build, a design build, and public, private partnership also commonly referred to as a P three. In a bid build situation, you have an owner who wants to build a bridge or a train station and they hire a engineering firm. That engineering firm does an environmental assessment. They also come up with a conceptual design and that design goes through a series of value engineering exercises. They then come up with a final concept, they do drawings for that concept and also create a set of specifications. Those drawings and specifications then become a set of bid documents, hence the bid then build. So those bid documents go out to contractors. Those contractors review the bid documents, submit a price, and a schedule. And if they are the lowest bidder, they win the job and they go on to build. In the design build scenario, the design aspect of the project shifts to a design, build joint venture. So the owner will come up with a very conceptual design, they will do a full design, and then we'll do typically, detailed specifications. But they will give you a performance criteria. An example would be if you are building a house. And you as the owner said, I want a colonial house and I want five bedrooms, three bathrooms. And then you put that out to bid by a design build joint ventures. So that design build joint venture is then tasked with designing it and ultimately building it. The reason why that's important is because we shift from an award in a bid build situation where the winner is the lowest bidder. To, in a design build situation, the winner is the best value. And typically, they receive a technical score and a price score. So you don't necessarily have to be the lowest bidder. You can have better value, you can be adding in different features. Getting back to the example of the home, you could be adding different layouts or different features to the home. Even if it's a higher price the owner may decide that that's a better value for the money to be spent. And then lastly is the public private partnership. Just recently we had a very large project go P three in the New York area. It was the La Guardia Central Terminal building redevelopment, that is a P three. And in that case, it's essentially a design build taken a step further. Not only is the team designing and building, but there's a developer involved who will provide funding in the form of cash, and financing in the form of loans from banks. The design builder will then design it, build it, and usually then there's a concession period where the team operates and maintains the asset. So again, those are three very broad categories of project delivery and there are nuances to all of them. There are other types of delivery methods. But for the focus of this presentation we're going to look at these three and keep these three in mind. So risk allocation, the reason why we went into these three delivery methods is because we wanna talk a little bit about risk. In the bid build situation, the owner holds the lion share of risk. They're the ones who are designing the project, they're getting the community buy in. They're getting the environmental and any other regulatory agency approvals. If there's an issue with the design or an issue with any of the permits, it all goes back to the owner. So in a bid build situation, owner has the most risk, contractor has reduced risk. As you progress to a design build or P three, the risk sharing is like a seesaw. The contractor developer takes on more risk. And the less risk ends up in the owner side. So on a public private partnership, the developer and contractor are taking on the full design. Any risks associated with materials or equipment financing, mostly all the permitting and approvals that are required to get these projects complete. Any coordination with the communities, all that now is shifted from the owner to the successful bidder in a P three project, which ultimately becomes the developer. So what does that mean for the construction industry? Well it means a lot of things. It means that both the owners and developers and contractors need to do a proper risk analysis. And once that risk analysis is complete, through the procurement process there really needs to be a fair and transparent risk allocation process. So just because one entity will take on the risk doesn't necessarily mean that they're the most equipped to handle that risk. So that has to be a very transparent and fully vetted process. Another aspect that comes up moving from bid build into design build or P three is that the owners now, because they can't just say we give it to the lowest bidder. They need to now justify picking one team over the other. So you really start looking at best value of taxpayer money. On the other side, design builders and developers need to focus on basically being an owner. And understanding the issues and needs of an owner, because now they are taking on that responsibility. They have a lot more control, but however, they have a lot more risk, so needing to fully understand those risks. And lastly because of all this, sustainable development has bubbled up to the top of the list. And I've seen it in the last ten years completely change the way projects are not only planned, but now being delivered. And it's been great to see. And there's only, the sky's the limit in terms of where this is gonna go in the industry. So let's stop for a second and just go back and talk a little bit about where the idea of sustainable development came from. And it can be traced back to this report in 1987 where they defined sustainable development. As development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This definition is strictly a material or resource targeted definition that's what they're really getting at here. Is that we won't use or overuse our resources today so that it compromises the future. So thinking about resources, let's talk a little bit about the use of resources. And this is a plot that was put together by the World Wildlife Fund. It plots quality of life on the x axis versus the consumption of resources or the ecological footprint on the y axis. And in their definition, they believe that the sustainability quadrant is somewhere where you have a very high human development index, so a high quality of life. And you'll notice there on the y axis it's in the 0.8 to 1.0 range. So you have high quality of life yet you're not overusing your resources. So you're anywhere from 0 to 1.5 on the ecological footprint. So then they plotted the countries from around the world. And the size of the circle on this plot is the population and obviously the United States and Canada are high up there. So for a lot of the developed countries, like the US and Canada, we are way overusing the amount of resources that we should be. And you'll notice that actually no country falls within the sustainability quadrant. So you're either overusing the amount of resources practices and your quality of life is high, or you're under using the amount of resources and your quality of life is very low. So that was a traditional definition of sustainability. Now what has happened today is we have this shift from an idea that sustainability is just something that's green or something that has to do with protecting trees to something that is much more holistic. And today's definition of sustainability touches on all these concepts throughout the industry. It touches on, or it encompasses rather, safety, green, diversity inclusion, community, quality, ethics and economics. And for the next 20 or so slides I'm gonna take each one of these concepts and I'm gonna explain what it is and how we manage it. And a sustainable project has a balanced focus on all these aspects of a project. If any of these aspects are competing against one another, and take priority over one another, you have an unbalanced project. And you do run the risk of not fully realizing the potential of that project. And in the worst case you could have a project that is unsuccessful.
