Jacobs Solutions entered its latest quarter holding a record US$32.4 billion backlog – and still missed its earnings forecast. Chief executive Bob Pragada reported revenue growth of just 2 per cent and attributed part of the shortfall to delays in water treatment and sustainable energy megaprojects, the same sustainability-focused programmes that built the backlog. The projects designed to signal future progress became the ones dragging present performance.
That pattern is not about weak intentions. Across infrastructure and major capital projects, sustainability commitments erode in delivery not because organisations lack ambition but because sustainability sits outside the decisions that determine scope, design and cost. That structural position is what makes the gap between commitment and delivery predictable – and what turns underperformance into something more than a reputational problem, reaching into financing terms, compliance obligations and where capital flows.
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The Predictable Shape of the Problem
Sustainability’s breakdown in capital delivery follows a consistent sequence. Specialists arrive after the business case, scope and key design decisions are set. Their accountability sits in a parallel function – present on the org chart, light on authority. When timelines compress or budgets tighten, sustainability requirements get renegotiated because they carry less governance weight than cost and schedule. Policy research from the Asian Development Bank Institute identifies exactly this pattern in quality infrastructure delivery: sustainability assessment can come “too late in the project cycle”, “accountability is often weak”, and mitigation requirements may be “not required or not enforced” at project level.
The costs compound over time. As climate and sustainability reporting obligations grow more specific and verifiable, infrastructure owners are increasingly required to account for what was delivered, not only what was intended. Gaps between commitments and project-level performance translate into compliance exposure, disputes over obligations, erosion of stakeholder trust, and weaker long-term asset value. These are structural penalties for a governance model designed for a looser accountability environment than the one now in place.
What Frameworks Measure and What They Cannot Create
Frameworks have proliferated as the industry’s answer to execution failure. But adopting a framework and solving the governance problem it was designed to measure are not the same thing. The Infrastructure Sustainability Council’s IS Rating Scheme is an independently verified performance tool covering planning, design, procurement, construction and operation – a common language for clients, funders and regulators assessing how projects perform against sustainability criteria. The Council states plainly that “the third-party independent verification process assesses project claims against the IS Rating Scheme requirements.” Verification rigorously tests what a project can substantiate. It cannot supply the decision rights, reporting lines, or accountability structures the project does not already have.
The IS Rating Scheme is only as useful as what it has to assess. When sustainability is embedded in governance from inception and tied to procurement and risk, the scheme tends to surface strong performance. Apply the same tool to a project where sustainability sits outside decision-making, and it records the constraints and missed opportunities with equal rigour – the scheme is indifferent to which result it finds. The Hydropower Sustainability Alliance’s Make your hydropower finance-ready guide takes a related position, urging developers to apply the Hydropower Sustainability Standard and independent assurance to address environmental and social risks early, so that lenders, insurers and offtakers have something credible to assess. Mainstream project finance takes this further still. The Equator Principles embed environmental and social requirements in financing covenants, require periodic compliance reporting post-close and, for higher-risk projects, mandate independent monitoring – with remedies for non-compliance that can extend to “including calling an event of default.” Sustainability underperformance, in other words, is no longer purely a reputational liability; it can trigger financing consequences that are contractual and enforceable.
These frameworks represent genuine progress. They codify expectations, set measurable benchmarks and give investors, regulators and communities a structured basis for seeing how projects perform against environmental and social commitments. What they cannot do is decide who holds decision rights or how trade-offs are made when pressures rise. Treating a rating, standard or covenant package as the governance solution – rather than as a test of whether governance already exists – leaves the structural drivers of under-delivery intact. The question frameworks raise but cannot answer is: who inside the project is accountable for sustainability when it conflicts with cost and schedule?
Accountability That Survives the Pressure
Sustainability commitments lose out in capital delivery when they lack the governance standing to survive trade-offs. Advisory functions, parallel reporting lines and committee-level oversight create the appearance of accountability while leaving sustainability exposed whenever cost and schedule decisions need to be made quickly. The pattern repeats because the structural conditions that protect sustainability commitments – decision rights, board-level oversight, accountability mechanisms with real authority – are precisely the conditions most organisations do not extend to sustainability functions.
The World Bank’s Eskom Investment Support Project in South Africa, which included the Medupi power station, shows what happens when those conditions are absent. The Bank characterised the project as involving “substantial environmental and social risks” and it became subject to an Inspection Panel process. Environmental and social obligations became central to project decision-making only after formal institutional oversight was triggered – not because internal governance had protected them from the outset.
When sustainability accountability is positioned inside the same executive and board structures that govern cost, schedule and risk, it holds standing in those choices rather than being treated as an advisory overlay. Cate Harris, who served as Group Head of Sustainability and Lendlease Foundation at Lendlease Group over more than seventeen years, worked within that kind of governance architecture. Under MissionZero, she linked climate and social value targets – including ambitions toward AbsoluteZero emissions and a phase-out of fossil fuels – directly to enterprise strategy, risk management and performance oversight, reporting into established executive and board governance. As Project Director for Lendlease’s global headquarters at Barangaroo, she applied the same principle at project scale, so sustainability objectives shaped design, workplace change and health and wellbeing outcomes alongside delivery fundamentals.
Lendlease has faced revenue declines, substantial losses, a falling share price and a major simplification strategy involving significant asset sales and a planned exit from most offshore development and construction. That commercial context tests whether governance embedded during growth survives financial pressure rather than being quietly renegotiated when conditions tighten. Governance-embedded sustainability is a necessary condition for accountability – but when in the project lifecycle that governance is engaged determines how much of the footprint it can actually change.
The Leverage Point Is Earlier Than the Industry Thinks
The ability to reduce a project’s whole-life carbon is not evenly distributed across the project lifecycle. Australia’s National Sustainable Procurement in Infrastructure Guideline states that this potential is typically “maximised at the earliest stages of a project lifecycle” and advises setting decarbonisation requirements “at the beginning of the project” so carbon management is integrated through planning, design and delivery. Once scope, design and procurement decisions are locked in, the available choices narrow from strategic to marginal.
The tools to act on that window are well established. Lifecycle assessment traces where emissions and waste actually arise across materials, construction, operations and end-of-life – rather than where they’re assumed to sit, which is rarely the same place. Ranking interventions by ease and magnitude gives project teams a structured view of which actions matter most and which are practical to implement. A costed action plan built from that ranking connects each sustainability measure directly to cost control and risk reduction, so decisions about carbon and waste sit in the same commercial frame as everything else.
The A303 Stonehenge Improvement Scheme in the United Kingdom spent years developing a road improvement through the Stonehenge World Heritage Site landscape before being cancelled. Historic England’s statement on the decision is framed around the World Heritage setting – a landscape constraint that needed to be design-shaping from the start had become delivery-stopping by the end. Cancellation, after years of sunk effort, is what the options look like when fundamental environmental and stakeholder constraints aren’t resolved before positions harden.
Monique Chelin, a sustainability consultant and founder of MJC Sustainability with experience across mining, infrastructure, and major capital projects in Australia, Asia, Africa, and the Middle East, prefers to be involved from project inception. When helping a client reduce carbon or waste, she uses lifecycle assessment to identify where emissions and waste impacts arise, then ranks improvement opportunities by both ease and magnitude – separating the actions that are straightforward to implement from those that move the dial most. That ranking feeds into a costed action plan that ties each sustainability measure to project cost and risk considerations, giving decision-makers a prioritised basis for action rather than an undifferentiated list of options. Because this process begins before scope, design and procurement choices are made, it shapes those decisions rather than negotiating around their consequences – and shaping those decisions is where governance over sustainability outcomes has the most to offer.
The Structure Is the Strategy
Sustainability’s execution gap in capital delivery isn’t a commitment problem. Organisations have targets. They’ve got dedicated teams, reporting frameworks and external ratings. The gap is positional: sustainability tends to arrive after the decisions that matter, report through channels that carry no authority, and get treated as renegotiable when costs and timelines come under pressure. That pattern is consistent enough that it reads less as a series of individual failures than as a predictable feature of how capital projects are governed.
Closing that gap requires two structural conditions working together, not sequentially. Governance that places sustainability inside the same decision-making hierarchy as cost and schedule gives it standing when trade-offs arise. Engagement at project inception gives it influence before scope, design and procurement choices foreclose the options. Neither works well without the other. Governance applied after design decisions lock in recovers only marginal adjustments. Early engagement without governance backing gets renegotiated under pressure. Ratings, standards and financing covenants can hold organisations accountable to what was agreed – but only if what was agreed was shaped by real decision rights from the start. The structure has to precede the strategy, because without it the strategy is just aspiration.
Delivery slippage on sustainability-focused programmes now shows up in quarterly results, in analyst models, and in capital allocation decisions. Boards that treat sustainability governance as a reporting exercise are making a structural bet – that their delivery model is more resilient than the evidence suggests. The gap between what an organisation commits to and what its projects actually build is no longer a communications problem. It’s a governance one. And it shows up in the numbers.
