The challenges that the pandemic delivered to society are obvious. But there have also been a few silver linings: people have seen how quality of life can be improved by cleaner air and streets reclaimed from the roar and congestion of cars; and inequalities and economic imbalances have been brought to the public consciousness.

Not surprisingly, society is now calling for a greener, fairer and more sustainable rebuild of the world economy. They want this experience to have led to something positive. This new reality is being seen as a clean slate; an opportunity for a new form of equitable and sustainable growth.

On the environmental side of the ESG equation, at least, governments clearly agree. And many have been making significant policy announcements to support that agenda. More than 22 regions and 450 cities have signed up to the UN's Race to Zero campaign, aiming for zero emissions by 2050. Major economies are also making commitments: Japan intends to achieve 'net zero' by 2050; China by 2060. The EU's Green Deal signals the block's intention to also reach the goal by 2050. President Biden's early promise to spend up to US$2 trillion on green infrastructure and energy is also encouraging.

The idea that the infrastructure sector should be putting environmental considerations front and center is already embedded in mainstream consciousness. Indeed, infrastructure may have the most critical part to play in driving a green recovery. The reality is that the construction and use of infrastructure is responsible for around 70 percent of all carbon emissions, largely through the energy and transport sectors, and the production of materials such as cement and steel. So it is not surprising that, over the last year, we have seen the infrastructure conversation dominated by net zero. Expect this to intensify even further.

At the same time, we are seeing a growing trend towards investors prioritizing 'sustainable' assets. BlackRock, one of the world's largest global asset managers, last year announced that they would be assessing ESG metrics as part of their investment approach across all portfolios. Others, including the Canada Pension Plan Investment Board have done taken similar steps. And while, for now, that does not mean investment in carbon-heavy assets will stop, a recent report by Goldman Sachs (PDF 1.12 MB) estimates that hurdle rates for renewables are now just 3 to 5 percent, versus 10 to 20 percent for hydrocarbon developments.

The economics underpinning the market have also rapidly changed. Recent estimates suggest that - in countries that represent two-thirds of the population - renewable energy is now the cheapest form of power.

However, carbon reduction, while critical, is only one part of the ESG agenda. Indeed, to deliver on the needs and expectations of society, governments and infrastructure players will want to start acting on a range of other fronts as well.

The social lens of ESG is particularly challenging for an industry that frequently features remote and arms-length operations and long, fragmented supply chains. Over the next few years all businesses will be expected to focus more on employment conditions - on training, healthcare and fair pay for example - and to be able to provide assurance that no part of their supply chain involves child labor or modern slavery. Parts of the infrastructure sector have a long way to go to bring their standards up to those of the best.

Fully embracing diversity remains a key objective for the industry too. Many now recognize that a diversity of views - across race, gender identity, ability and social status, for example - delivers enhanced resilience, better decision-making and stronger community participation. Planners and investors want to know their assets are serving a diverse population, and that their assumptions are not relying on the misconception that 'one size fits all' when it comes to infrastructure.

Governance will be of concern too. Transparency and probity are now set to become the 'table stakes' across all businesses. The days when parts of the construction industry were associated with money laundering and tax evasion needs to become history. There is an opportunity for the best global contractors to distinguish themselves through the rigor and transparency of their disclosure.

The combination of investor pressure, improving economics for sustainable infrastructure, and rapidly changing societal attitudes add up to the perfect conditions for a golden, or rather green, era for infrastructure. And all those working in the sector can be proud to be part of the movement that will safeguard the future of our planet.

Over the coming year, we expect to see the infrastructure agenda be powerfully influenced by a focus on environmental, social and governance outcomes aimed at ensuring actions are contributing to a fairer, more inclusive and more equitable world. We call on infrastructure developers and policy makers to respond; the world will be a better place for it.

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