With over 3,000 participants at the Financial Sustainability Forum 2024 in Dubai, there were a lot of great conversations to be had. One that stood out to us was with Laura Jepson, lead public sector sustainability practice, Middle East, Deloitte, who explored the challenges of developing smart cities in a sustainable way across the region.
In a conversation with Mark Walker, editorial director, The Fintech Times, Jepson said:
MW: Can you tell us a bit about yourself and your role within the company?
Laura Jepson, lead public sector sustainability practice, Middle East, Deloitte
LP: My name is Laura Jepson and I lead our public sector sustainability practice in the Middle East. I sit in our strategy team and help governments think through some of the policy lenses around sustainability transformations.
My background is in economic development and city transformation. A lot of the work I do focuses on ensuring governments are delivering municipal services in an environmentally friendly way. For example, afforestation, rebuilding cities, mobility networks, and utilities delivering waste management – these are all ways in which a city can be made more sustainable.
Most of my work is in the UAE and the Kingdom of Saudi Arabia (KSA). The KSA is now standing out among the rest of the GCC countries, as it looks to rethink how cities are run. It has created royal commissions that are consolidating a lot of the decision-making in cities. The thinking behind this is that it’s making it easier to look at the city holistically, from economic development, from livability and from a sustainability perspective.
It is essentially like saying ‘Let’s put one person in charge of doing this’.
With a background in city transformation – where have you worked before and what challenges have you seen?
I’m originally from Toronto, Canada and so whenever I’m able, I use Toronto as a benchmark city. Although right now it could definitely use some improvements of its own! One city that I lived in which had an interesting model was London. There, the city has a Deputy Mayor of sustainability whose whole remit is to drive the sustainability agenda.
This isn’t an easy job though. There are a lot of challenges with sustainability because it touches on so many different things. I think a lot of people naturally think about decarbonisation and net zero, but when you’re thinking about a city, you have to consider things like waste management systems and circularity. It is about bringing nature back into the city and ensuring there are strong food systems in place that support it too. This involves relying less on imports and promoting things like community gardens and vertical farming.
Another crucial aspect is the urban, rural connection. A lot of the population hubs rely on things that come from rural areas and so you need to ensure you’re bringing economic benefit to rural areas.
These are only some of the areas that need to be considered when talking about sustainability in a city context. There are loads of different areas of expertise so it’s really difficult to create sustainable transformation in a city when you need to coordinate across all these verticals with different stakeholders and entities.
Putting one person in charge who can consolidate and drive a particular vision across multiple sectors is going to drive change for the better. Coordination is great and necessary, but sometimes you need one voice to make the decisions.
What can economies like the UAE and KSA learn from other cities that have undergone transformations?
Let’s say you want to make buildings run more efficiently at a city-wide level. When there is already an environment in place and you try to retrofit all those systems, it is a huge undertaking. It’s very costly. For example, if you want to build a building with sensors embedded in elevators, walls and vents, there is a huge upfront cost. Although it is better in the long term.
They’re now at a bit of an inflection point, because there are a lot of different interesting solutions out there, but there are not necessarily economies of scale in them. Building things new is difficult because you’re guessing at what’s going to work and what everybody else is going to use. At the end of the day, we want to have these economies of scale so you can share information. In turn, this will make things cheaper and run the way that everybody else is letting them in the future
However, if you have a built environment already, there is less pressure to make a decision right away. Especially since you know it’s going to be a custom-built solution because it’s got to fit your realities. Because of this, there are challenges and benefits to both greenfield and brownfield sustainability transformations. I think the number one thing is to think creatively about what the solutions look like.
Case and point
I was in France recently, doing a tour of an old town and when we parked our rental car, I realized that the parking spaces along the road weren’t concrete and weren’t stone like the rest of the street. They dug them up, put snow in and then laid metal or plastic in the place that the car is parked on. This accomplishes several things:
It improves drainage due to water absorption.
It reduces urban heat because it absorbs it rather than reflecting it, like concrete does.
It’s not really regreening, but it does make it so there are no weeds. So it’s like, it’s just not, not concrete. I haven’t looked at the cost, I just observed it, but I couldn’t imagine that it would be that much more expensive to do that. It would be a similar price as to just lay down lay down concrete, and if you’re not laying down concrete, then you have access to the the plumbing, the utility systems, and everything underneath. You just pull up the gate, put to the side, dig out the dirt and get to whatever you’re after.
The UAE is fragmented from an overarching governmental point of view – does that play well into a city-by-city approach?
In the UAE’s case, it plays well: Dubai can make decisions that are suited for Dubai. Abu Dhabi can make decisions that are that are suited to Abu Dhabi, and so on.
A lot of things can impact a city’s development, from its history to its ethnographic makeup to its socioeconomic makeup – you need different solutions for different areas. This is where high levels of autonomy can help. You need to have a city government that’s able to bring some nuance into the decision-making, and if you’ve got an overbearing central government that makes it really difficult to do.
That’s actually one of the things the KSA was thinking about when it went to its royal commission models – it realised it needed to give them more autonomy.
I’m a big fan of the devolution of power. I think the more local you make these decisions, the more it addresses the specific needs of each community. For example, Dubai is its own entity, it’s not the UAE. In London, power is devolved even further as it has councils. Each council can do what’s best for its own area.
Of course, there are challenges associated with this. Ensuring you still have a cohesive city is of the utmost importance, but making sure local communities are empowered and bringing individuals into the picture makes them feel like they are part of the decision-making process that is making their community more sustainable for their children.
The more personal and local you can make it, the better.
What are some of the challenges with trying to align views on a community, city, country and world level?
Coordination and alignment – huge problem. If you look at the world level for example, what is going to be the new go-to fuel source for things like planes? If one airline wants to use one source, let’s say hydrogen, and another wants to use algae, what impact is this going to have on the infrastructure the port needs to have.
These are hugely complex problems that have many different layers to them. Coordination, alignment and choosing what the solution is without being overbearing is one of the major challenges.
The other major challenge that has to be said is financing. The most recent cost for these changes I’ve seen is around $7trillion a year up to 2030.
I’ve heard people quote numbers as high as $49trillion a year but we only got $300billion agreed at COP29. Of course its better than the $200billion we had before and it’s certainly better than zero but there’s still a huge gap in these estimations.
There is still so much that needs to be done and in the debate around “how do we fund this, how do we change this”, I’m a big believer in you can have economic prosperity and sustainable transformation – it is not just one or the other. I do think we need to rethink concepts of growth though.
Take GDP growth over the year – exponential curves can’t exist in reality. There’s going to need to be a plateau, and people don’t like admitting that. However, I don’t think our GDP necessarily needs to be constantly increasing, and I don’t think it necessarily needs to be “constant growth” in the way that we define it today. You can certainly have prosperity and a level of growth based on a different definition – let’s get rid of GDP and find a proper definition for growth.
Innovation and investments can build prosperity which will in turn feed the transformation and create money in the system that is going to be able to finance this change.
If we’re doing it right, then we’re not just putting money into the system and saving it there – we’re generating returns for investors who choose to invest in great areas and innovate in them.
What do you think will have needed to have happened by this time next year in order to us closer to that goal of aligning finances?
There are two ways to look at this, locally and internationally.
Locally, I think the number one thing that Dubai needs to do is build its circularity and waste management. There is a national circularity strategy, but I’d like to see more coming out of that in terms of impact on the ground.
Dubai is a city that likes to consume things, and that’s not going to change and it shouldn’t change either. It’s one of the great things about Dubai, but it needs to be done in a more circular way, so that we’re thinking about the impact that we’re having.
From an international point of view, financing is the biggest thing that needs to be figured out. How can do we galvanise the international system to invest and make a real business case for blended finance. The World Bank is doing a lot better under its current governor than it was before, but I still think there’s more that it could do. I want to see more commitments and more action around financing some of the issues.
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