How Can we Achieve Sustainability when Managing Projects?

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Introduction

Cora Systems CEO Philip Martin explores the steps organizations must take to execute projects in a more sustainable and eco-friendly fashion.

The recent COP26 conference in Glasgow has brought climate change to the forefront of all our minds. Whether it’s at a government, business, or individual level in the way we lead our personal lives, we have to become better at managing our carbon footprints. When it comes to the economy, we have to be savvier in how we manage projects. Organizations should give greater consideration to the environmental impact of their projects and strive to execute them in a more sustainable manner.

The project management industry widely agrees on the necessity of addressing the issue appropriately. According to a recent report by the Association for Project Management (APM), it found that it’s cropping up regularly with its members:

“We see a lot more tenders for projects asking about the climate impact, your policies and your attitudes to minimizing climate impacts.”

What is Sustainable Project Management?

According to Science Direct, sustainable project management (SPM) is defined as:

“The planning, monitoring and controlling of project delivery and support processes, with consideration of the environmental, economic and social aspects of the life-cycle of the project’s resources, processes, deliverables and effects, aimed at realizing benefits for stakeholders, and performed in a transparent, fair and ethical way that includes proactive stakeholder participation.”

What are the priorities when it comes to SPM? 

Did you conduct an environmental study before initiating the project? Are you enforcing a recycling policy? Are you incorporating renewable energy resources to counteract emissions? Do your project’s core materials, such as Portland cement and steel – known for high carbon emissions – align with sustainable practices? Consider sourcing environmentally friendly materials, whether they’re reused or recycled, for your projects.

Tackling Your Carbon Footprint

Until now, we’ve examined carbon reduction solely in terms of energy – the energy consumption of each industry, households, and farming. Under the Climate Action Plan, there’s a need to shift focus to embedded carbon, which refers to the carbon consumed in producing a product. Society should be transitioning away from products with high embedded carbon.

Effectively managing carbon footprints across the economy poses a complex challenge. Much of the discussion may involve superficial commitments, often serving as elaborate public relations exercises. However, it’s about controlling, managing, and ultimately transforming the way operations are conducted. Project controls can play a crucial role. They delve into costs, establish metrics for essential items, and concentrate efforts on the right areas for intervention.

What Gets Measured Gets Done

To comprehend your carbon footprint, you must begin measuring various aspects. Establishing key performance indicators (KPIs), which involve standardizing specific metric sets adapted to industry types, is crucial. Gaining control over your project costs is attainable through a rapid analysis of project codes to identify any increases in material or skillset prices.

As you forecast your project, you can link costs to particular items that are cost-coded in your finance system (e.g., SAP, JD Edwards, etc.). With this capability, now you’re starting to get an idea of costs from a project today with a similar project from three years ago. You can see cost trends. That allows you to put OKRs (objectives and key results) around particular carbon footprint items.

How much paper do you purchase, and what are your electricity costs? If you’re a pharmaceutical company with a new product in development, consider how you’ll produce it, the associated costs, energy consumption from non-renewable sources, and the use of non-sustainable materials. These factors relate to your forecasts, and incorporating sustainability into the R&D outlook for the next 10-20 years is crucial.

Concrete, among the top three materials with high embedded carbon, requires consideration in scenario planning. If a proper carbon accounting tool is integrated, embedded carbon becomes a significant factor in comparing options. For instance, in house building, where there’s typically a 50-50 mix between timber frame and concrete blocks, this becomes a simple yet impactful example.

How Can Software Help Achieve Sustainability when Managing Projects?

There are standardized sustainability calculators, according to industry sector, that measure carbon footprints, e.g. the MSCI ESG ratings and the S&P global sustainability ratings. Both approaches look at ESG (environmental, social, and governance) risk management rather than general sustainability. This means the risks associated with different ESG metrics vary depending on the firm’s industry, but they provide useful guidelines and very granular detail if you drill down by sector.

In the UK, a carbon accounting tool assesses water utilities, considering embedded carbon and operational energy consumption, determining each provider’s carbon footprint. Irish Water, the national operator, ranks as the second-largest electricity consumer in Ireland.

Regarding strategic project management, when assembling your project portfolio, collect essential data for each project to inform decisions. Traditionally, various factors influence a company’s strategy, including compliance, risk, ROI, NPR, etc. Sustainability factors such as electricity and maintenance spending and the project’s carbon footprint are crucial. Different sectors use diverse metrics for sustainability, requiring portfolio managers to consistently assess projects before inclusion.

Implementing Sustainability Project Management Initiatives

 According to the Project Management Institute, for example:

“To integrate sustainability successfully on your project, you will need your initial project team on board, meaning you need to provide team training and learning on sustainability.”

“This team learning is a fundamental requirement for successful integration of sustainability in a project. From the many case studies available, the team leaders/project managers experience more commitment and engagement in their project and a higher performing team when sustainability is an underlying purpose for the team.”

In corporate initiatives, company goodwill and senior management support play a pivotal role. While some countries are committed to environmental sustainability, others remain indifferent. However, initiating metric standardization within an environmentally conscious country’s vertical increases the likelihood of global standardization.

Examining previous business process changes, such as the widespread adoption of standardized risk analysis, illustrates how practices become ingrained. In the early stages of projects, risk analysis was infrequent, but now it’s standardized: multiplying impact by probability yields a score. This universally accepted approach to risk assessment demonstrates progress.

Years ago, there was no such thing as benefits realization. It is now becoming a global requirement for building and selecting your portfolios. Within the Benefits Realization feature of Cora PPM, you can track the sustainability factors on a project. 

Conclusion

Climate change discussions can be overwhelming, yet industry can address the issue through incremental changes in project management efficiency. With existing tools and capabilities at our disposal, implementing these changes requires motivation. There’s no doubt we’ll meet the challenge.

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