The Sustainable Asset Valuation (SAVi) tool
Our tool helps demonstrate how sustainable infrastructure delivers better value-for-money for governments and taxpayers, and offers better financial returns for investors.
Sustainable infrastructure holds enormous potential for alleviating poverty, improving access to basic services, creating employment and business, and ultimately contributing to the well-being of people and the planet.
IISD defines sustainable infrastructure as assets that:
- Lower carbon and environmental footprints
- Provide for the stewardship of natural ecosystems
- Move beyond compliance on core labour standards and human rights
- Trigger green technological and industrial innovation
- Spur investment in education, skills building and research & development
- Increase employment and the growth of green jobs
- Are financially viable
- Crowd-in domestic investors and businesses
- Increase opportunities for foreign direct investment and domestic value addition
- Optimize value for money for taxpayers and investors across the asset life cycle
IISD developed the Sustainable Asset Valuation tool (SAVi) to help governments and investors financially value environmental, social and economic risks and externalities that are ignored in conventional investment assessments.
How SAVi makes a difference
SAVi can be used to answer critical questions for national and regional governments looking to invest in infrastructure, such as: how does environmental, social and economic performance increase value for money for tax payers; is sustainable infrastructure systematically more expensive to build; and do sustainable assets trigger positive externalities such as higher GDP, employments, innovation and productivity?
SAVi can compare and contrast the environmental, social and economic performance of business-as-usual infrastructure with more sustainable alternatives and also determine the climate resilience of planned infrastructure projects. With the analysis in hand, governments can determine trade-offs and prioritize projects and policies based on how they contribute to sustainable development.
In turn, investors can use the results of a SAVi analysis to assess the impacts of improved sustainability performance on future cash flows and financial returns. The analyses can also be used to prepare disclosure statements, as recommended by the Financial Stability Board, and quantify and report on environmental, social and economic co-benefits and avoided costs generated by infrastructure projects—and thus their contributions to sustainable development.
How is SAVi built?
Building SAVi took us on a unique journey, as we wanted to value infrastructure in a systemic manner. We also sought to combine sound science with financial analysis.
The result is the first of its kind.
SAVi combines the outputs of system dynamics simulation and project finance models.
Using Vensim, our system dynamics simulation qualifies the relationship between the infrastructure asset and its geographical location and socioeconomic context.
The project finance model follows the Corality SMART financial modelling methodology.
What can SAVi determine?
SAVi builds the costs of environmental, social and governance risks and externalities into the following:
- Extended Cost benefits analysis
- Gross Margin
- Net present value
- Value for Money
- Internal Rate of Return
- Credit Ratio (Loan Life Coverage Ratio and the Debt Service Coverage Ratio)
How can I use SAVi?
IISD engages with potential users of SAVi to gain insight into project characteristics and to determine material risks and externalities. We then customise the tool to the specific asset and develop valuations on the above matrixes.
We would value the opportunity to work with you on assets and projects in the pipeline, under planning and construction or that are already in use. Contact Oshani Perera to learn more.
For a deep dive into SAVi, please view our interactive presentation:
Sustainable Asset Valuation Tool: Water infrastructureTechnical background document for the Sustainable Asset Valuation Tool of IISD (SAVi) for water infrastructure. Read More
Sustainable Asset Valuation Tool: RoadsTechnical background document for the Sustainable Asset Valuation Tool of IISD (SAVi) for road infrastructure. Read More
Sustainable Asset Valuation Tool: Energy infrastructureTechnical background document for the Sustainable Asset Valuation Tool of IISD (SAVi) for energy infrastructure. Read More
Sustainable Asset Valuation Tool: BuildingsTechnical background document for the Sustainable Asset Valuation Tool of IISD (SAVi) for buildings. Read More
Sustainable Asset Valuation (SAVi) Tool brochureThis brochure highlights IISD's Sustainable Asset Valuation (SAVi) Tool, which helps governments assess the finanical impact of climate and other environmental, social, ecnomic and governance risks on infrastructure. Read More
How to Implement Strategic, Smart, Sustainable Public ProcurementPublic procurement is “not a back-office function anymore, but a crucial pillar for delivering government services, and a strategic one for tackling climate change.” Read More