How to implement and benefit from a multi-value flow in local communities
Unpacking the concept of an interconnected flow of social, economic, and environmental benefits experienced by a wide range of beneficiaries and risk holders.
Words by Dark Matter Labs | published in EWSC Research & Insight
Key Takeaways:
The following article explores the concept of multi-value flow, which describes the interconnected flow of social, economic, and environmental benefits experienced by a wide range of beneficiaries and risk holders. It highlights three key actions to implement and benefit from a multi-value flow:
- Comprehensive bundles of long-term multiple benefits should be identified and captured through shared standards and methodologies across the actors involved. This will ensure that beneficiaries receive incentives and encourage their accountabilities and active engagement.
- Alignment and agreement on a clear target between all stakeholders are fundamental to unlocking shared ownership, fostering collective actions, and leveraging co-investment opportunities.
- Implementing processes and structures that catalyse local communities to understand and experience multiple benefits will effectively harness their capabilities and lead to a chain of benefits.
1. Understanding the Context: Increasing common risks and unclear responsibility to act
Integrated Water Management (IWM) is recognised for its potential to bring a wide range of benefits and mitigate risks collectively. Addressing complex water-related challenges, such as flood risk, water scarcity or water quality requires more than simply fulfilling the core duties of individual stakeholders. One particular barrier to tackle these challenges is the lack of clarity around who bears responsibility for specific implementation, especially when emerging risks affect multiple stakeholders across public authorities, housing developers, water sectors, and communities.
Sustainable Drainage Systems (SuDS) — a widely known physical delivery of IWM — serves as a prime example of an intervention that can benefit a wide range of stakeholders. SuDS are systems for managing stormwater locally (as close to its source as possible) by mimicking natural drainage like basins, rain gardens, and green roofs. These can improve multiple water challenges, including flood risk and water pollution. By recognising these benefits, in January 2023, the Department of Environment, Food and Rural Affairs (DEFRA) announced that implementing SuDS will become mandatory for all new development in 2024. However, to ensure that the implementation is meaningful and goes beyond mere box-ticking activities, it is necessary to address who will be responsible for the various elements of a successful scheme to achieve shared benefits. These are:
- Building new capabilities to plan, design, implement and maintain SuDS;
- Developing a governance framework for resource allocation and decision-making
- Establishing an effective assessment process, including monitoring its performance and capturing the benefits it provides;
- Creating sustainable funding streams to support the ongoing maintenance of SuDS;
- Developing a new supply chain to provide the necessary supplies for SuDS implementation;
The keys to successful delivery of outcomes from SuDS, are maintenance and management, including funding, capabilities, assessment and resourcing. Unfortunately, these aspects often lack collective engagement because of the complexity of the system. Management issues fall outside the core duty of water companies and housing developers. While the local community of residents can ensure quality and long-term care for the facilities, they have limited opportunities for participation in the development process. Local authorities are well-positioned to improve residents’ living environment by supporting SuDS; however, they are already stretched with limited capacity (Benson & Lorenzoni, 2017).
As highlighted by Defra’s Catchment Based Approach Policy Framework, water management cannot fall to a single organisation as it requires collaborative actions. Understanding, aligning, and capturing common benefits, is crucial to create meaningful opportunities to rearrange responsibilities across beneficiaries.
2. Exploring Possibilities: How do system-level multiple benefits flow?
SuDS is not only effective in addressing multiple water challenges but also generating a range of valuable outcomes across the whole system, benefiting a set of stakeholders widely. Multi-value flow generates beyond monetary or economic benefits to encompass natural and social values. These diverse types of multi-value evolve through the interplay of social, natural and financial capital. To accomplish this, we will look into different forms of capital, highlighting their interconnectedness and interdependence. Specifically, we will focus on:
(1) uncovering the distinct nature of each capital;
(2) understanding their interlinkages and potential for generating a sustainable flow of capital management.
(1) The distinct operational characteristics of each form of capital
Recognising the distinct nature of financial, social and natural capital is key to unlocking a wide range of sustainable benefits. This section explores their difference and how each form influences the other, shedding light on their operational features.
The planetary boundary concept emphasises the finite regenerating capacity of nature, which has implications for financial and social capital. Conversely, improving natural capital would mean increasing conventional financial capital and social capital.
While natural capital influences all stakeholders, its influence varies depending on ownership. Shared natural capital, like water quality and biodiversity, offers shared benefits, but privately owned natural capital, like land or food production, creates distinct value for owners. On the contrary, exploiting shared natural capital can harm individual and financial capital, such as degrading soil quality and reducing profits.
Unlike natural capital, which shares impact, financial capital operates within a narrow framework and does not fully reflect the factors contributing to its generation. The form of capital stems from specific ownership, determining the recipient or payer of value. The legal right to this capital rest with the owner, even if it alters the outcome of interconnected natural or social capital (Thygesen, 2019, p. 7). Thus, ownership (what is or is not mine) becomes significant as it shapes the responsibility and value provision.
Furthermore, financial capital plays a crucial role in influencing economic growth, resource allocation, and individual incentives for investment. Its value is determined by various factors, including the assets it represents, the perceived risk and return associated with those assets, and the supply and demand dynamics in financial markets. This value, in turn, drives investment, economic development, and the overall functioning of markets.
Social capital, on the other hand, encompasses a bricolage of interacting with diverse place-specific elements, including local culture and norms. This form of capital serves as the foundation of community-based action, emerging from mutual cooperation to fulfil economic and social needs. Its highly contextual nature is rooted in reciprocity and mutual benefits fostering linkages of trust rather than one-sided transactions (Wesselow, 2023, p. 1).
Thus, it can generate additional value for all the parties involved. A noteworthy example of such economic systems is gift economies, which operate on giving and sharing without explicit expectations of immediate or direct reciprocity or monetary compensation. Unlocking the values inherent in social capital necessitates a combination of transactional processes in a monetary economy and relational practices in a gift economy. Trust, social value, and social relationships play crucial roles in this endeavour. Social capital offers collective benefits to a broader range of actors, including site-specific advantages.
(2) Building sustainable capital and value flow
Comprehensive facilitation of these forms of capital unlocks the opportunities for generating a wide range of benefits. Based on an understanding of their unique characteristics, the integrated operation of these types of capital forms the foundation for sustainable capital management and the realisation of viable outcomes. Each capital functions and contributes in the following ways:
- Well-managed natural capital creates value for individual and local communities. Its proper management and utilisation establish the foundation for multiple benefits and contribute to social and financial capital sustainability. Realising these benefits requires collective efforts for shared objectives in managing this capital.
- Social capital generates mutual benefits and spreads widely through collective actions, relationships, and trust. It fosters collaboration and cooperation among individuals and communities, resulting in positive social outcomes and scaling capital and benefits, including financial capital.
- Financial capital serves as a key mechanism for resource allocation. It encompasses utilisation of social capital and aspects of natural capital to a certain extent. The effective management of all forms of capital with integrity attracts value and enhances the flow of financial capacity.
Implementing sound management practices that consider the interrelationships between different forms of capital will increase the overall value derived from such management. In turn, it promotes a more robust flow of financial capital. However, there are still barriers that need to be addressed, such as, a lack of understanding regarding the value of interventions like SuDs and the need for organisational structure that enable the integrated processing and management of different forms of capital. Despite these challenges, there have been a few notable cases that have achieved a multi-value flow and effective capital flow. In the next section, we will uncover the actions and tools that played a key role in building such a flow.
3. Creating Opportunity: Building multiple benefits flow
The following section presents key learnings from examining existing practices that provide a potential actionable pathway. Unlocking multiple values through the interconnectedness of capital requires considering the following actions:
- Long-term and multiple value accounting and recognition
- Alignment of mutual benefits across stakeholders
- Community steward integrated capital flow
These learnings are informed by insights from three distinct cases that demonstrate the organisation of a portfolio of values resulting in regenerative mutual benefits for various stakeholders. The following cases present comprehensive facilitation of financial, social and environmental capital. Compound forms of capital contribute to long-term resilience through a multi-stakeholder approach, with a strong emphasis on the in-depth involvement of the local community rather than being relying solely on a single organisation. We analysed the cases through a literature review and drew insights from DML’s pilot project. These are the cases:
- Urban stormwater management in Augustenborg, Malmö, Sweden: The project focuses on creating socially, economically and environmentally sustainable neighbourhoods. Through active community involvement, this initiative mitigated risks and generated a wide scope of benefits.
- Samsø, the island demonstrating conversion to renewable energy in Denmark: The island has achieved self-sufficiency in renewable/sustainable energy by gifting the first construction and fostering a reciprocal cycle of giving and sharing. This cycle contributed to establishing economic sustainability and scalability of the project;
- TreeAI initiative, a pilot project operated in Glasgow, United Kingdom, led by Dark Matter Labs and Lucidmind: The initiative provides a cross-organisational impact assessment and investment tool. This tool aims to fund, manage and maintain portfolios of outcomes derived from urban trees. The initiative focuses on the significance of recognising and capturing the multiple values among various stakeholders
3.1 Long-term and multiple-value accounting and recognition
As interventions and initiatives progress over time, they generate a wide range of value and reduce potential risks and liabilities. However, the initial high cost of transitioning to sustainable infrastructure often poses a significant barrier. It is crucial to recognise that despite this challenge, such transitions can create numerous opportunities that bring socially and economically sustainable benefits.
For instance, the cost of maintaining a sustainable drainage system, like an open stormwater system in Augustenborg, is roughly double that of a conventional sewage system. However, as the severity and frequency of climate change-related risk increase, so does the cost of repairing damages caused by these events. The effectively managed system in Augustenborg has avoided potential repair costs compared to other areas that experienced severe damage during the same climate events. Considering the rising occurrence of extreme weather events, the overall evaluation of the system’s cost in Augustenborg has proven more sustainable than conventional drainage systems.
Additionally, Augustenborg has delivered a multitude of benefits that contribute to its regenerative foundation as it has progressed over time beyond the adaptation related to extreme rainfall. These benefits include the development of public spaces for children to play and for residents to engage in outdoor activities, an enhancement of biodiversity, and a reduction in the area’s unemployment rate.
Still, attracting investors and involvement for future benefit remains a challenge. As highlighted in the TreesAI interim learning report from the Glasgow pilot, the lack of inter-operable models and shared metrics, built on proprietary software and misaligned frameworks inhibits the long-term bundling of shared risks. That is why the Tree AI initiative — which aims to connect nature stewards, project developers, investors and beneficiaries interested in environmental services — has built an open-source cloud-based impact assessment scenario tool. Through the Glasgow pilot’s Work Group (a governance structure that brings together the TreesAI team with Glasgow City Council, SEPA, Scottish Water, FloodRE, Nationwide, Clyde Climate Forest and Scottish Flood Forum) this tool is being tested with stakeholders alongside a wider valuation tool built on GI-VAL.
The mentioned cases had distinct partners and organisational structures, which differ from the WSC. However, they highlight the potential of long-term infrastructure design in mitigating risks and fostering resilience. It becomes crucial to recognise and capture the following:
→ Evolving benefits and reducing risks create greater long-term economic values
→ Wider spillover values provide cumulative and aggregated benefits to various stakeholders in a mutually beneficial manner
→ Creating tangibility of impact enables coordinating multiple projects across organisations and attracts a vast pool of beneficiaries, including investors
However, unlocking this range of values requires collaborative actions with aligned goals.
3.2 Aligning mutual benefits across stakeholders
Collective efforts begin with recognising the independence of multiple shared values. Aligning the objectives to deliver expected values is the foundation for building shared accountability rather than distributing liabilities and duties among organisations.
The case of Samsø demonstrates how the collective ownership and management of common physical assets fosters a sense of shared responsibility and common objectives. On the island, the community collectively owns the local infrastructure, such as the heating plant and windmill, making them stewards of these assets and driving sustainable efforts. This shared ownership of physical infrastructure has contributed to collective achievements, increasing confidence and providing legitimacy for the project’s expansion.
In the case of Augustenborg, a broader ambition was pursued, aiming to benefit the local community as a whole and go beyond addressing single individual objectives. As a high unemployment rate characterised Augustenborg, the goal of the implementation was to create a socially, economically, and environmentally sustainable neighbourhood, not solely focused on flood risk mitigation. This led to a deliberate focus on placing residents and local partners at the centre of the planning and implementation process. Diverse engagement activities included intense public consultation, regular meetings, community workshops and informal gatherings. Consequently, a high participation rate and leadership among stakeholders resulted in the successful delivery of outcomes still in operation after launching the project more than 20 years ago.
Drawing from experiences of the Tree AI initiative, when diverse stakeholders are brought together the importance of investing in alignment and surfacing assumptions, whether about our different roles, contributions, ideas of ‘success’/ intended outcomes of the shared mission is critical. That is why the Work Group has been focused on drafting a clear MoU which sets out objectives at the start, which can get us to a place of mutual understanding (forthcoming). Further, this has been developed as a part of Beyond the Rules, which focuses on standardised many-to-many partnership agreements, that help to coordinate resources between multiple parties.
The above cases demonstrate the importance of aligning clear common targets that benefit all partners involved. The following tools and actions can enable the establishment of agreement across multi-stakeholders:
→ Common physical assets owned by the community involved: Shared ownership of assets among communities make the benefits visible, empowering confidence and providing shared responsibility and care for assets management.
→ Aligning interests and setting common goals: Setting goals that directly benefit stakeholders promotes collective actions and the involvement of various stakeholders.
→ Setting clear common targets through shared standards: Integrating shared standards enables the establishment of clear shared goals that guide the actions of all parties involved.
→ Coordinating and aligning goals across various stakeholders is the foundation of ensuring involvement and achievement of a portfolio of value that encompasses both immediate and long-term benefits. The shifting process of generating benefits and the design of community involvement in each step enables coordinating these goals and driving the desired outcomes.
3.3 Locally steward integrated capital flow
By placing the engagement of local stewards in the centre of the process and involving them in various steps, benefits flow sustainably. Capability gaps and the need for new skills to ensure effective, sustainable infrastructure management, like SuDs, are often overlooked due to a conception of significant barriers. However, the Samsø and Augustenborg case studies highlight the creation of an integrated circuit of capital flows established on a strong foundation of active involvement from residents and local businesses.
For example, Samsø showcases the importance of allocating funds by prioritising community engagement and achieving sustainable goals across economic, social and environmental values. Funding from declaring itself as a ‘sustainable energy island’ in 1997 was insufficient; however, the local authority leveraged the resources to actively engage with local communities instead of using them to build infrastructure through external expertise. The authority emphasised the potential for business growth by transitioning to sustainable practices to local parties like local businesses and craftspeople. Recognising these transitions as opportunities for future business growth led to their willingness to reskill and contribute to infrastructure development. Some of which were gifted or communally implemented formed shared ownership among residents. These contributions initiated a chain of integrated capital. With the capacity to maintain the infrastructure locally, social capital can help the community in adapting to emerging needs. A strong motivation to care for the infrastructure resulted in supporting other social capital, such as the Energy Academy, which expanded to other projects, like the biofuel ferry. Further, the generation of financial capital was also achieved through several self-sufficient energy production facilities, leading to the sale of surplus to the rest of Denmark.
Benefits of a community-based approach in bringing SuDS to cities range from the importance of incorporating local needs, increasing social capital and stewardship, with trees lasting much longer when involving communities in their maintenance (which has been shown to reduce the mortality rate from 30% to 5%). The TreesAI Glasgow pilot aims to deliver this through three aspects: a participatory approach to bringing local communities, including local business, local government and residents into decision-making; baseline monitoring via citizen sensing and post-planting care training. Ensuring active community involvement in the process and fostering communication about flood-risk drive long-term stewardship (Effective Future Communication of Flood Risk in Scotland | CREW | Scotland’s Centre of Expertise for Waters, 2022). In the Glasgow pilot, collaboration with Trees for Cities and Scottish Flood Forum advocate for a community engagement approach. It is important to recognise that communities are highly contextual, and the defining their community and strategy should be designed in a way that works best for them.
In terms of baseline monitoring, citizens can participate in mapping and monitoring urban trees using mobile apps or online platforms. By collecting data on tree species, size, health, and location, citizens contribute to creating comprehensive inventories of urban trees. This information can guide urban planners, policymakers, and community organisations in making informed decisions about tree planting, maintenance, and preservation — while helping residents to feel a stronger sense of belonging and ownership. In terms of post-planting care, using the over 30 year old Tree Warden programme, the pilot will look to build Glasgow’s first Tree Warden programme.
In terms of decision-making, through the pilot, the TreesAI initiative is drafting multi-stakeholder value contracts and agreements that drive public good, focused transactions. Within these contracts, community clauses will be embedded, for example, guidelines to ethically using citizens’ sensing and machine learning technology — or community-based decision-making.
While these cases operated at a specific scale and already had active citizenship within the area, the role of local communities remains crucial for effective and sustainable asset management. The management structure and process should ensure that stakeholders directly experience the benefits of interventions, fostering confidence, stewardship, and care for the evolving asset. Various means enable to achieve, such as:
→ Initial gifting intervention through local communities’ involvement and building shared ownership
→ Investment in local capability building, including re-skilling and knowledge sharing
→ Promoting and investing in participation, engaging local communities in the decision-making process
These actions create a reciprocal cycle of wide-ranging values that evolves sustainably over time.
4. Pathway forward: Innovating towards system-level shifts
Recognising multiple potential benefits of an intervention like SuDs and understanding the interdependency of the benefits stresses the need for cross-organisational actions and sets the foundation of collaboration. To tackle growing water challenges, leveraging integrated capital across financial, environmental and social capital is essential to unlocking multiple values for all the parties involved. By innovating the process and prioritisation with this integrated approach, challenges can be transformed into opportunities, addressing complexity and creating system-level shifts sustainably.
The following three key propositions can be applied to enable the successful delivery of Water Smart Communities (WSC):
- Comprehensive bundles of long-term multiple benefits should be identified and captured through shared standards and methodologies across the actors involved. This will ensure that beneficiaries receive incentives, and encourage their accountabilities and active engagement.
- Alignment and agreement on a clear target between all stakeholders are fundamental to unlocking shared ownership, fostering collective actions, and leveraging co-investment opportunities.
- Implementing processes and structures that catalyse local communities to understand and experience multiple benefits will effectively harness their capabilities and lead to a chain of benefits.
This article is written by Dark Matter Labs (DLM). DLM contributed towards developing a transition model pathway, given its experience in building and orchestrating systemic transitions. This article is one of five produced by DML, see: Enhancing stewardship and decision-making for sustainable water management, Mitigating water-related risks through local stewardship, Essential frameworks for the sustainable development of common goods, and Mitigating water-related risks through integrated asset management for more.
As Discovery research lead and series editor, Arup’s Transformation & Design Studio led the multi-partner research effort contributing public innovation and strategic design expertise.
This is one of a series of insight articles produced as part of the EWSC innovation programme, exploring how integrated water management can be delivered through innovative housing and stewardship models. For an overview of the project, latest news or to get in touch visit https://www.ewsc.org.uk/.
