Impact(sustainability)

Abstract

Sustainability has become a crucial 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 .

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 . At the portfolio level, organizations can identify areas where they can have the greatest impact and prioritize projects that contribute to their sustainability goals .

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 .

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 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 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 where different practices are analyzed in companies and their ways of sustainability reporting.

Social Return on Investment (SROI)

Social Return on Investment (SROI) is a methodology used to measure the social, environmental, and economic impact of a project. It seeks to quantify the social value generated by a project by measuring outcomes against resources invested.

In the context of sustainability projects program and portfolio management, SROI can be a useful tool for project managers to measure the impact of their projects and demonstrate the value created for society and the environment. This is particularly important given the growing interest in sustainable development goals (SDGs) and the need to demonstrate progress towards achieving them.

SROI takes a holistic approach to measuring impact, considering the social, environmental, and economic outcomes of a project. This makes it well-suited for measuring the impact of sustainability projects, which typically aim to achieve multiple goals across different dimensions of sustainability.

Project managers can use the SROI methodology to identify the most significant impacts of their projects and prioritize resources accordingly. For example, a sustainability project aimed at reducing greenhouse gas emissions could use SROI to measure the social, environmental, and economic benefits of different interventions, such as energy efficiency improvements, renewable energy installations, and behavior change programs. By comparing the costs and benefits of each intervention, project managers can identify the most effective strategies for achieving their sustainability goals.

SROI can also help project managers to engage stakeholders and communicate the impact of their projects. By providing a clear and quantifiable measure of social value, SROI can help to build trust and legitimacy with stakeholders, including funders, regulators, and community members. It can also help to demonstrate the contribution of a project towards achieving the SDGs, which can be an important factor in securing funding and support.

In terms of project management, SROI requires careful planning, data collection, and analysis to ensure that the results are credible and useful. Project managers need to consider the social and environmental impacts of their projects from the outset, and work with stakeholders to identify the most relevant and meaningful outcomes. They also need to collect and analyze data on these outcomes, and use appropriate valuation methods to assign a financial value to the social and environmental benefits generated by the project.

Some resources on SROI and its connection to project management and sustainable development goals include:

The Guide to Social Return on Investment (Social Value UK, 2021) provides an introduction to SROI and guidance on how to conduct an SROI analysis, including stakeholder engagement, impact mapping, and valuation methods. The United Nations Development Programme's report on Social Return on Investment for Sustainable Development (2017) explores the use of SROI as a tool for measuring the social impact of sustainable development projects and provides case studies of SROI analysis in different contexts. The SDG Impact Standards for Enterprises (Sustainable Development Solutions Network, 2021) is a framework that provides guidance on how enterprises can measure and report on their impact towards the SDGs, including the use of SROI as a methodology for measuring social value. Overall, SROI can be a valuable tool for project managers to measure and communicate the impact of their sustainability projects, and to demonstrate their contribution towards achieving the SDGs. By carefully planning and implementing SROI analysis, project managers can identify the most effective strategies for achieving their sustainability goals and engage stakeholders in the process.