Sustainable urban systems ensure that a society consumes resources in a manner that there shall be enough resources for the future members of society to utilise. They promote resource efficiency and environmental responsibility through optimal interconnected systems which include buildings, transportation, energy, water and waste management. 

Sustainable urban systems utilise green infrastructure and renewable technologies to minimise the adverse effects to the environment, promote social justice & public health, and foster inclusive economic development within the built environment.

Importance of creating sustainable urban systems 

A habitable planet is the precursor for the existence and flourishing of humankind. Although this statement appears to be self-evident, it is one that is often taken for granted. In the pursuit of economic growth, many projects are narrowly framed and assessed solely on extracting the highest financial value. This results in sub-optimal capital allocation to activities that deteriorate the environment and society . Clearly, this is not sustainable in the long term. 

The consequences of neglecting environment and social concerns are far-reaching. A negative impact on society and environment can lead to devastating consequences, ultimately destroying financial value of the projects. The notion that businesses depend on functioning societies and societies depend on a healthy environment is reflected in the wedding cake model. This concept is important as it reminds us on how much we need to respect the environment.

Our principles

The above concept can also be applied in designing sustainable urban systems. Incorporating this concept into the design reduces environmental degradation, promotes social well-being and optimises financial viability. A new evaluation approach needs to be considered: shifting from maximising financial returns solely and towards balancing environmental, social and economic concerns collectively. Sustainable urban systems should stand the test of time and hence, a need to plan for the longer term when designing them. 

We have indicated some of our thinking, sorted using the layered cake model below. Further, some examples from the urban transport system are provided for better illustration for the points below.

1st LAYER - ENVIRONMENT

a.Conserve, preserve and adaptive reuse.

We believe in revitalising existing infrastructure and buildings, where possible, to reduce embodied carbon while respecting the natural environment.  Not only does it breathe new life to old buildings, create an iconic landmark but it also enriches the sense of belonging for the community. This generates both positive social and environmental value. 

One such example is the repurposing the former Tanjong Pagar Railway Sation in Singapore. Opened in 1932 and gazetted as a national monument in 2011, the terminus will be restored and integrated with a new underground MRT station.  Users can enjoy the “unique blend of the past and the present” when completed.

b.Align along the path of least resistance.

We believe in identifying changes that make sustainable choices easier, and more effortless. By making sustainable options more convenient, it eases the transition and helps people to choose the more sustainable choices naturally.  

The adoption of electric vehicles (“EVs”) is one such case study. Public charging infrastructure must be expanded to encourage more motorists to switch to EVs. Norway, Iceland, Sweden, Netherlands and China are the leading nations in EV adoption.  Apart from generous incentives and perks e.g. free parking in cities, Norway established the largest network of public fast chargers per capita globally which addresses the range anxiety issue. In 2023, over nine in every 10 new cars sold in Norway are electric.  Adoption of EVs is linked to lower less air pollution and improved health. This reinforces the earlier concept that positive environmental impact support social well-being, which in this case, is generated from improved health. 

Active commute promotion is another example. End-of-trip facilities such as bicycle lots and shower rooms could be provided at office buildings to encourage more to cycle to work. In Singapore, office building owners will be accorded with higher scores during their green building certification if they provide such bicycle-friendly facilities. For more on Savills sustainability services offering, check out our colleagues in Sustainability and ESG services team.

c.Compact growth nodes.

We believe that well-planned compact cities can be more environmentally sustainable. There exists an inverse relationship between urban density and transport-related energy consumption  as compact cities reduce the need for lengthy commutes since residents stay closer to jobs and amenities. Their carbon footprint, therefore, is lesser in comparison to that of a sprawling city. That said, each city typology has its own unique challenges. Such is also the case with a compact city typology. It is often troubled by poorer air quality and higher urban heat island effect . Mitigating efforts such as demarcating car-free zones, installing green roofs and walls, and laying permeable pavements could address these negative externalities.

2ND LAYER - SOCIETY

a.Accessibility

We believe in designing urban systems that are accessible to all, regardless of age or ability. Social value can be created from more inclusive urban systems. Earlier this year, Savills provided an opinion piece on social value. To learn how to deliver greater social value, click here. 

Using urban mobility system as an example, social value can be created in the form of:

•Levelling access to employment opportunities. One of the biggest hurdles to hiring people with disability (“PWD”) is physical barrier in the public transport network. In Toronto, there are barrier-free access for wheelchair users in more than half of its subway and train while only one in every six stations is accessible to wheelchair users on Island on Montreal. A 2019 study  found that, on average, wheelchair users in Toronto have access to 75% of jobs that are accessible to an individual not in a wheelchair. With lower accessibility at the subway and train network on the Island on Montreal, this figure dipped to 46%.

•Maintaining social interaction. PWD are often excluded from social relationships and community participation. Again, physical barrier in transport network is a limiting factor. PWD are, therefore, more likely than their non-disabled peers to report loneliness, low social support and social isolation. Social values from better mental and physical health and lower risk of cognitive decline can be reaped from a more inclusive mobility system.

b.Affordability

We believe in creating urban systems that are affordable to residents while remaining economically viable. Improving affordability builds onto the earlier point on aligning along the path of least resistance, though as a financial instead of a non-financial determinant. In short, to encourage certain public behaviour via financial perks and incentives.

Public transport fare subsidies could generate social value. All modes of public transport – buses, trains and the tram – in Luxembourg are free to use since 2020. By making it free, this policy nudged residents to commute on the public transport network. Ridership on public transport is up by 25%  as car usage fell 11%. Social value can be derived from avoidance on potential social costs from higher usage of private cars. These include the social cost on carbon dioxide emission, health damages associated with exposure to particulate matter 2.5 exposure as well as stress, fatigue and irritability from traffic congestion. 

3RD LAYER - ECONOMY

a.Attract investment

We believe in creating business-friendly environment that attract investments. This may be via, among others, open foreign investment regime, extensive network of free-trade agreements and streamlining of procedures. Public-Private Partnerships (“PPP”) provides a framework to attract private capital investment. This can be particularly beneficial if the country is facing ageing infrastructure and suffering from inefficiencies. Data compiled by the World Bank indicate that the global PPP investment and projects have rebounded from the recent trough in 2020-2021, suggesting returning confidence from private investors.

Fig. 2 Private Participation in Infrastructure, PPP Projects

.

Brazil first announced its plans for airport privatisation in 2011. Main motivations include overcrowding, frequent delays and to assuage concerns on the ability of her transport infrastructure to cope with the influx of travellers for 2014 World Cup and 2016 Olympics. Since then, private-sector firms operate around 90% of the airports in Brazil  and will collectively invest some USD 1.5B over the 30-year concession contract to modernise the airports.

b.Create Jobs

We believe in developing urban systems that create a range of work chances, including blue, white and green collar jobs from both traditional and emerging sectors. Developing urban systems e.g. housing, transport, industrial infrastructure etc. lays the foundation for job creation. But this work must match the broader economic policies around tax, trade and job training initiatives as job creation is significantly influenced by economic policies. 

High speed rail has played a key role in spurring regional economic growth in China. For instance, the shortening of travel times between cities has stimulated domestic weekend trips. In turn, this created jobs from the tourism and hospitality sectors. 

Putting principles into practice

Understanding the principles behind sustainable urban systems is the first step but putting these principles into practice requires implementable methods and actions. Using the transport urban system as an example, developing a sustainable transport network plan requires multi-modal assessments e.g. regional economic analysis & positioning, supply chain overview, logistics & transport demand, assessment of environment, social and economic impact and value chain analysis. 

Sustainable urban systems may attract global investments from funds with an ESG-centric mandate to invest, build and operate this unique class of infrastructure. This is particularly so in the South-East Asia region where the proliferation of sustainability concepts is currently limited, in light of challenges such as fossil fuel consumption, financing and the need to balance growth and energy transition. 

There are unintended consequences in encouraging certain social behaviours. Well-intentioned policies are commonly met with unintended consequences. For instance, in promoting EVs adoption, reskilling may be required for workers to acquire specialised knowledge for battery diagnostics and potential of battery recycling hazards. A value chain analysis can assist to identify such risks. Value chain analysis is also useful to understand strategic positioning of industrial land parcels. Landlords can better position their land assets with say emerging economic activities identified through value chain analysis.

The Savills Integrated Real Estate Advisory Services team is ideally positioned to help you determine the optimal real estate solutions that support sustainable outcomes. Our services include, among others, investment advisory, master plan strategy (including value chain analysis), property economics and placemaking strategy. We have a wealth of global experience across the full spectrum of real estate sectors. The team adopts an integrated approach – leveraging local expertise, drawing on our international experience and working with global industry partners – to formulate end-to-end solutions for our clients.

Contact an advisor today.

  ¹https://www.lse.ac.uk/granthaminstitute/news/why-sustainability-means-leaving-behind-old-approaches-to-teaching-finance/

  ²https://www.stockholmresilience.org/research/research-news/2016-06-14-the-sdgs-wedding-cake.html

  ³https://www.straitstimes.com/singapore/platform-shelters-of-former-tanjong-pagar-railway-station-brought-back-after-6-years-in-storage

 ⁴https://www.wri.org/insights/countries-adopting-electric-vehicles-fastest

 ⁵https://ourworldindata.org/electric-car-sales

  ⁶https://transportgeography.org/contents/chapter4/environmental-footprint-of-transportation/urban-density-energy-consumption/

  ⁷https://www.isglobal.org/en/-/compact-cities-lower-carbon-emissions-poorer-environmental-quality

  ⁸https://www.sciencedirect.com/science/article/pii/S096585641730705X

 ⁹https://www.luxrelo.lu/post/three-years-of-free-ride-luxembourg-celebrates-success-of-bold-public-transport-initiative

¹⁰https://www.airwaysmag.com/legacy-posts/brazils-airports-private-management