Sustainability in Project Management. Governance and Integration of the P5 Standard

In 2012, The Rio+20 United Nations Conference on Sustainable Development centered on the notion that sustainable development is dependent upon both public and private sectors being fully engaged by leveraging frameworks that support the advancement of sustainable development initiatives, taking into account the importance of corporate social responsibility (Rio, 2012). With the United Nations Millennium Development Goals set to expire in 2015, giving way to the Post-2015 Engagement Architecture, a framework that is expected to establish priorities and strategies for the next era. Project management is uniquely positioned to drive these efforts through both governance and use. This paper focuses on the key integration points for sustainability to project governance and methods using the GPM P5 Standard for People, Planet, Profit, Project Products and Processes. P5 provides for useful benchmarking across industry and fundamentally helps organizations demonstrate the reality of their commitment to sustainability by allowing stakeholders to better understand the organization’s contribution to sustainable development. Introduction Extreme Weather, Melting of the icecaps, and rising sea levels are topics that frequent the news, social media, and conversation. According to the US Environmental Protection Agency, scientists have pieced together thousand of years of the earth’s climate history and environmental problems prior to the industrial revolution in the 1700s can be explained by natural causes while warming since the mid 20th century cannot be. (US EPA, 2014) While there is no quick fix, there are lessons that we can learn from our past to ensure that our today and our children’s tomorrow is not compromised beyond repair. Organizations are increasing the importance of sustainability as a survey conducted by Accenture with the support of the UN Global Compact of 1000 CEOs from 27 industries across 103 countries concluded with 93% regarding sustainability as the key to success. (Accenture, 2013) This same study uncovered that:  68% of CEOs do not believe the global economy is on track to meet the demands of a growing population  67% report that business is not making sufficient efforts to address global sustainability challenges  62% believe they cannot quantify the value of their sustainability initiatives  37% see the lack of a link to business value as a barrier to accelerating progress The United Nations Post-2015 Engagement Architecture (UNGC, 2013) outlines the core functions necessary to for corporate sustainability to play a positive role in sustainable development and provides the foundation for sustainability reporting standards such as the Global Reporting Initiative’s G4 Framework. Sustainability in Project Management, by Joel Carboni; page 2 ©2014, Joel Carboni | [email protected] | @joelcarboni. Published at www.asapm.org The challenge to project management, the discipline that’s sole purpose is to manage and deliver change, is current working practices for project management do not readily align with the principles that drive this new architecture and reporting framework. The inability to drive global change as active contributors to the achievement of sustainable development goals indicates that we are not in line with the needs of society or the direction that the global economy is shifting towards. This paper aims to outline a concrete method to align project management with the architecture and the Global Reporting Initiative’s G4 Framework for sustainability reporting to enable projects to be measured and managed in ways that directly correlate to sustainable development goals. The Post 2015 Engagement Architecture and Sustainability Reporting In order to align governance and delivery of portfolios, programs and projects to sustainability objectives it is we must first understand how the UN’s Engagement Architecture functions. Below are four of the key building blocks that are illustrated in figure 1 (UNGC, 2013) that will serve as the framework to drive sustainability initiatives in organizations worldwide. 1. Sustainable Development Priorities / Long Term Business Goals the opportunity to advance sustainable development goals is strong motivation for business to integrate sustainability into strategies and operations. These motivators drive long-term business strategy as the understanding of the growing convergence of public and private interests. 2. Transparency and Accountability – as more companies increase their sustainability reporting efforts, the need to compile thorough and legible records becomes critical. 3. Platforms for Action and Partnership – In order for corporate sustainability to have the impacts on a global scale that is necessary, collaborative platforms such as the UN Global Compact, Global Reporting Initiative, World Business Council for Sustainable Development, World Economic Forum, and Business for Social Responsibility must be supported and work in collaboration with a shard objective. 4. Drivers and Incentives – a growing driver for corporate sustainability can be found within each market the company operates. Stakeholder, investors, employees and consumers are demanding more sustainable solutions. Figure 1. The UN Post 2015 Engagement Architecture Sustainability in Project Management, by Joel Carboni; page 3 ©2014, Joel Carboni | [email protected] | @joelcarboni. Published at www.asapm.org The four core blocks are the framework that supports an organization’s ability to identify, prevent, mitigate and account for any negative impacts it may have on society and the environment by incorporating these principles into corporate strategy and then reported on. Sustainability reporting is increasingly becoming the key platform for communicating organizational, economic, environmental, social and governance performance, reflecting positive and negative impacts. A Governance & Accountability Institute study found 72 percent of the top 500 companies ranked by Standard & Poor issued a report on their social responsibility and sustainability initiatives in 2013 up from 53% in 2012 and 20% in 2011 (GA, 2014). As of June 25 th , 2014, 6,321 organizations have submitted over 15,234 reports to the Global Reporting Initiative alone (GRI, 2014). In sustainability reports, information related to an organization’s product/service impacts to society and the environment are an ongoing challenge. In the GRI G4 Reporting Framework, there are five aspects in relation to products that are required (G4, 2013). 1. Customer Health and Safety 2. Product and Service Labeling 3. Marketing Communications 4. Customer Privacy 5. Compliance Presenting to the European Chamber of Commerce in Beijing, Timothy Hui, Head of Focal Point GRI for China stated that the volume of reporting is increasing which is positive, however so is the volume of information in each report. Information is submitted on topics such as employee health and safety programs to carbon emission reduction goals to philanthropy initiatives (T. Hui, Presentation, May 27th, 2014). These are all worthwhile topics however they are operationally focused and the emphasis needs to focus on what the organization produces from a product and service perspective. What is Material for Sustainability Reporting? Materiality in the context of the GRI G4 reporting framework include topics that have a direct or indirect impact on an organization’s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large as shown in figure 2 below. In fl u e n ce o n S ta ke h o ld e r A ss e ss m e n ts a n d D e ci si o n s Medium to High Materiality Very High Materiality No or Low Materiality Medium to High Materiality Significance of Economic, Environmental, and Social Impacts Figure 2 Materiality Matrix based on GRI G4 Sustainability in Project Management, by Joel Carboni; page 4 ©2014, Joel Carboni | [email protected] | @joelcarboni. Published at www.asapm.org The threshold for defining material topics to report should be set to identify those opportunities and risks which are most important to stakeholders, the economy, environment, and society, or the reporting organization, and therefore merit particular focus in a sustainability report (GRI, 2013). In this context, project management processes and their resulting products are material, as they do not live solely within the confines of the environment in which they were intended. Project impacts on society and the environment in which they are utilized must be accounted for as a measure of project success (GPM, 2014) as well as a factor for sustainability reporting. Bringing Project Management into Focus The GPM P5 Standard for Sustainability in Project Management takes into consideration the product’s life cycle from a social, environmental, and economic perspective. According to the standard, during each project phase sustainability should be accounted for to ensure the project’s product from the time the idea is conceived until it is handed off in its final form, including planning, product realization, designing and developing production, and servicing (GPM, 2014). The standard outlines an impact analysis that is conducted during project initiation with incremental updates throughout the project life cycle to define and prioritize sustainability risks and opportunities in order to improve a project’s value; the impact to the environment, society and economy as well as the project’s alignment organizational strategy.