The Sustainable Asset Valuation (SAVi) tool
IISD aims to 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’s Sustainable Asset Valuation tool (SAVi) assesses the extent to which environmental, social and economic risks and externalities affect the financial performance of infrastructure assets. It also calculates the societal and economic benefits of sustainable infrastructure, such as employment, productivity, income and contributions to GDP.
How SAVi Works
SAVi puts a financial value on risks and externalities that are not well understood and therefore ignored in traditional investment assessments. These can include legal and environmental risks, resource and revenue risks, and climate-change related risks. SAVi assesses the impact of these risks on the financial performance of an infrastructure project or portfolio.
SAVi combines the outputs of system dynamics simulation and project finance models. SAVi can currently be applied to several asset types: energy, roads, buildings, irrigation, sewerage treatment and nature-based infrastructure. Models on railways and waste management are in the pipeline.
We customize SAVi to the needs of our clients, whether they are looking at a single project, a portfolio of projects, or an economic or industrial policy. We identify externalities and risks on a case-by-case basis in collaboration with the client.
How can SAVi help?
For governments looking to invest in infrastructure, SAVI can answer critical questions such as:
- How does environmental, social and economic performance increase value for money for taxpayers?
- Is sustainable infrastructure systematically more expensive to build?
- 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.
SAVi in use
Some of the clients of SAVi assessments include: the Ministry of Infrastructure and Water Management of the Netherlands, the Directorate of Tourism of Jammu & Kashmir in India, UN Environment, WWF, the Moroccan Road Agency, and the Senegalese Government Agency for the Implementation of the Plan for an Emerging Senegal.