Revision as of 19:48, 5 May 2023

Abstract

Sustainability has become a crucial consideration in project management. As organizations strive to align with the Sustainable Development Goals (SDGs), project managers must find ways to ensure that their projects contribute to a more sustainable future. This article explores the role of impact assessment in sustainability projects and how project, program, and portfolio management methodologies can be adapted to prioritize sustainability.

One key aspect of assessing impact is the use of sustainable indicators. Indicators can provide valuable insights into the effectiveness of sustainability projects and help to track progress towards achieving SDGs ^[1].

However, the usage of sustainability into project management methodologies requires a significant shift in mindset and priorities. Project managers must consider the long-term impact of their projects, not just the immediate benefits and deliverables ^[2]. At the portfolio level, organizations can identify areas where they can have the greatest impact and prioritize projects that contribute to their sustainability goals ^[3].

In conclusion, the article emphasizes the need for project managers to consider the impact of their projects on sustainability goals. This requires a collaborative effort from all stakeholders involved in the project, but the benefits can be significant, both for the organization and for the planet.

Big Idea

Since the publication of the Brundtland Report in 1987, there has been a constant interest in the development of indicators to measure and/or evaluate aspects of sustainable development. This growing interest received a major boost after the Earth Summit in 1992 where Agenda 21 specified the need to develop indicators of sustainable development for use at the national, regional, and global levels (United Nations, 1992). The United Nations Sustainable Development Goals (SDGs) provide a comprehensive framework for measuring progress towards sustainable development, and include a range of indicators for tracking progress on specific goals ^[4].

Sustainable development consists of three dimensions: the environmental, the social, and the economic areas. Project, program and portfolio managers could find benefit in representing these three dimensions under a Venn diagram as M.L. Brusseau ^[5] which illustrates how these three pillars are interconnected and interdependent. The diagram would show the areas where the pillars overlap, indicating the ways in which each pillar contributes to and depends on the others.

For example, the area where the social and environmental pillars overlap might represent initiatives that aim to improve people's health and well-being by reducing pollution and protecting the natural environment. The area where the economic and environmental pillars overlap might represent investments in renewable energy and sustainable agriculture, which both create economic benefits while also reducing environmental harm. Overall, a Venn diagram about sustainability can be a useful tool for understanding the complex relationships between different aspects of sustainable development and the need for balance between them.

To be more specific, the field of project sustainability measurement and reporting is constantly evolving, as organizations seek to more accurately and comprehensively understand, measure and be informed about the impact of their sustainability projects. Latest developments in the state of the art for measuring the impact of sustainability projects using sustainable indicators are:

Integrated Reporting - Integrated reporting is a framework that seeks to provide a comprehensive view of an organization's value creation over time, by integrating financial and non-financial indicators of performance. By including sustainability indicators in their reporting, organizations can better communicate their impact on the environment and society, as well as their financial performance. The International Integrated Reporting Council (IIRC) provides guidelines on how to implement an integrated reporting approach.

Social Return on Investment (SROI)- SROI is an approach for measuring the social, environmental, and economic value created by a project. It is based on identifying and valuing the outcomes that result from the project, and assessing the costs associated with achieving those outcomes. SROI can be a useful tool for demonstrating the long-term benefits of sustainability projects, as well as for understanding and prioritizing investments that will have the greatest impact. The SROI Network provides guidelines on how to implement an SROI analysis.

Life Cycle Assessment (LCA) - LCA is a framework for quantifying the environmental impacts of a product, service, or process over its entire life cycle, from raw material extraction to disposal. LCA can help companies to identify areas where they can reduce their environmental impact, and prioritize sustainability improvements. The International Organization for Standardization (ISO) provides standards for conducting LCA studies.

Integrated Reporting

Integrated reporting is a framework to reporting on organizational performance that seeks to provide a more comprehensive view of an organization's value creation over time by integrating financial and non-financial indicators of performance. It shows that an organization's ability to create value is not only determined by its financial performance, but also by its impact on the environment, society and stakeholders.

One aspect of integrated reporting to always keep in mind is project management. Organizations often undertake sustainability projects to improve their social and environmental performance, but measuring the impact of these projects can be challenging. Despite many indicators for the sustainable goals are nowadays in usage, often it becomes difficult to implement projects in line with them. Integrated reporting can help organizations to better manage sustainability projects by providing an approach for tracking and reporting on progress towards sustainability goals.

Integrated reporting enables organizations to communicate the links between their strategy, governance, and sustainability performance in a more holistic way, helping them to demonstrate their commitment to sustainability and long-term value creation, which is often forgotten in projects but it plays a crucial role when it comes to sustainability. It also provides stakeholders with a more complete picture of an organization's value creation, enabling them to have a clear view and take actions about their interactions with the organization.

The International Integrated Reporting Council (IIRC) has provided guidance on how to implement an integrated reporting approach. The IIRC Framework defines integrated reporting as "a concise communication about how an organization's strategy, governance, performance, and prospects lead to the creation of value over the short, medium, and long term." The framework includes six guiding principles for integrated reporting, which are:

1.Strategic focus and future orientation

2.Connectivity of information

3.Stakeholder engagement

4.Materiality

5.Conciseness

6.Reliability and completeness

By following the six principles, organizations can ensure that their integrated reporting is relevant, credible, and transparent, and provides a clear and comprehensive view of their value creation.

In terms of project management, integrated reporting can help organizations to better track and report on progress towards sustainability goals by providing a structured approach to measuring and reporting on sustainability performance. This can include setting sustainability deliverables, tracking progress towards them, and reporting on the results of sustainability projects.

Integrated reporting can also help organizations to identify areas where they need to improve their sustainability performance or approach. By providing a more comprehensive view of an organization's value creation, integrated reporting can help organizations to identify gaps in their sustainability performance and develop strategies for addressing these gaps.

Many studies have been addressed regarding this topic, especially for a framework that has been already used in past and it's now edited with sustainable indicators. For example ^[6] analyzes the challenges and the benefits of implementing sustainability reporting in universities, often involved with organization in sustainable projects.

Another worth to mention literature regarding this topic is ^[7] where different practices are analyzed in companies and their ways of sustainability reporting.

Social Return on Investment (SROI)

Life Cycle Assessment (LCA)

Annotated bibliography

1. ↑ Ahi, P., Searcy, C., & Kramar, R. (2021). Sustainability performance measurement and reporting: A systematic review. Journal of Cleaner Production, 295, 126389
2. ↑ Kerzner, H. (2021). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons
3. ↑ Buggenhout, J., Colpaert, P., & Vanhoucke, M. (2021). An optimization approach for portfolio selection in project management under sustainability constraints. Journal of Cleaner Production, 290, 125631
4. ↑ https://sdgs.un.org/goals
5. ↑ M.L. Brusseau, in Environmental and Pollution Science (Third Edition), 2019
6. ↑ Adams, C. A., & Simnett, R. (2011). Sustainability reporting and performance management in universities: Challenges and benefits. Australian Accounting Review, 21(3), 207-220. This article discusses the challenges and benefits of implementing sustainability reporting in universities, including the role of performance management and project management in sustainability reporting
7. ↑ Hartmann, F., & Perego, P. (2014). Sustainability reporting: An exploratory study of Italian companies. Journal of Cleaner Production, 85, 172-184. This article examines sustainability reporting practices in Italian companies and discusses the role of project management in sustainability reporting.