New research programme pursues a sustainable future for capital-intensive industries

Green Wall

The Smith School of Enterprise and Environment at the University of Oxford has today launched a new programme designed to support the transition of capital-intensive industries to environmental sustainability.

Globally, trillions of dollars are invested each year in fixed assets for capital-intensive industries including mining, oil and gas, primary production and infrastructure. These projects have often been coupled with negative environmental impacts, deforestation, pollution and high carbon outputs.

But despite this, the world's fixed assets are falling behind in keeping pace with human need. Large segments of the global population cannot access even the most basic assets—housing, clean water or electricity, or waste disposal. Key to addressing this challenge without further environmental damage this will be the transformation of capital-intensive industries towards sustainability.

To facilitate this transition, there is an urgent need to better understand the sector as a whole. Specific challenges range from unpicking poor forecasting and business performance - the return of capital employed across the sector is just over 5% - to addressing the pervasive association of capital projects with negative environmental impacts.

To help address this, the Smith School of Enterprise and Environment has launched the 'Oxford Programme on the Sustainable Future of Capital-Intensive Industries', the first programme globally which aims to help the sector address key challenges across enterprise, environment and technology.

The programme is led by Dr Atif Ansar, Fellow of the Smith School of Enterprise and the Environment and the Saïd Business School, University of Oxford. Its founding benefactor is Marex Spectron, a world leading commodity broker across metals, energy and agricultural markets.

Overall, it is a lack of data that accounts for many of the poorly formed long-term decisions endemic across capital-intensive industries. Until now, a global understanding of challenges, opportunities and best practice across the sector has been impossible. The programme will harness advances in big data analysis alongside emerging technologies such as machine learning, automation and artificial intelligence to provide large global datasets on capital-intensive industries that place the environment at their core alongside more traditional financial metrics.

The programme will help capital-intensive industries not only with enterprise-related challenges, but to understand the policies and processes behind above-average environmental and social performance. Ultimately, it aims to help decision makers achieve better economic, environmental and social outcomes.

Dr Atif Ansar said: "Capital intensive industries must reconcile their business strategy with the need for environmental conservation. Powered by research insights and technology advances, what is good for people and the planet can also be good for business. Our programme aims to help capital-intensive industries to move beyond the false dichotomy of profit and protecting the environment to take a leadership role in sustainability."

Professor Cameron Hepburn, Director of the Smith School of Enterprise and the Environment, said: "It is more and more widely accepted that companies must have a plan in place to achieve net zero or risk stranded assets, divestment and loss of income. For capital-intensive industries, this programme represents a powerful first step towards a better global understanding of the changes that will be necessary in coming years."

Ian Lowitt, CEO of Marex Spectron, added: "Commodities are at the heart of the global economy and an important component of our environmental challenge. The search for new technologies, the impact of environmental policy and the facilitating role of derivatives markets are key elements of addressing this environmental challenge. Funding research in partnership with a world-class institution, such as the Smith School, will make a genuine difference. Our clients, and the programme, will both benefit from the engagement opportunities it will provide and we are proud to be the founding sponsor."