Executive summary This module is not a detailed study of all aspects of sustainability. The goal of this module is a general introduction into sustainability with a focus on the impact and the effect on projects © University of Southern Queensland 2 MGT8021 – Project sustainability management throughout their life p. With this knowledge it should be possible for you to identify, understand and address the key issues related to definition and delivery of projects that adhere to current concepts of sustainability, and how to plan for the sustainment of those projects throughout their life p.
The concept of sustainability is explored in terms of consumption of resources – this can apply to inputs that are required to the project ‘system’ in order to deliver the project outcomes, the processes by which the project is managed, and the nature of the outputs and their need for resources throughout their useful life p. A range of project sectors is considered in order to understand the different implications for each sector. Also, it must be remembered that sustainability works inside of a closed loop system.
In all of your deliberations about sustainability and project management you must remember the need to maintain a systems approach. 1. 1 Sustainability issues in a project environment Sustainability is a term that evokes emotion in people about certain events or practices that affect our long term survival of ourselves and all other aspects of our planet. We need to be able to work through this emotion and focus on what is important in an objective and reflective way. By their very nature projects use and affect many resources throughout the life of the project.
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Some of these resources are consumed or adversely affected by the project. For example, if there was a project to build a new major airport, there would be many issues to consider, and the issue is can their resolution be sustained for the life of the airport? So, the question we need to ask when addressing the project is ‘Can this project be sustained and for how long? ’ The resources required to sustain the project may be physical (natural resources) or they might simply be people (human resources). They could also include local resources as well as imported resources.
As a result there are many dimensions of sustainability to consider in a project environment. In 1983 the United Nations World Commission on Environment and Development (WCED) convened under Gro Harlem Brundtland a commission to address the growing concern about the accelerating deterioration of the human environment and natural resources and the consequences of that deterioration for economic and social development. This became known as the Brundtland Commission. The Brundtland Commission defined sustainable development in its 1987 Report titled Our Common Future as:
Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs (World Commission on Environment and Development 1987) A full copy of the report is available at http://www. un-documents. net/wced-ocf. htm There are other definitions but this one is often used as the baseline definition. The question that needs to be proactively addressed as we look at the resources required to construct and sustain a project, ‘will it be possible to sustain current and future resources? ’ There are two aspects of sustainability to a project.
In the design and construction phases of the project, resources of all kinds are consumed. Similarly, during its operational life there is a need to © University of Southern Queensland MGT8021 – Project sustainability management 3 provide resources so that the project can continue to operate profitably and efficiently throughout its life. This through life provision of resources is also known as the sustainment phase. This term is used by Defence, but it is also being used in the wider commercial areas. Blanchard (p. 350) provides a short description about sustaining system maintenance and support functions.
But, to sustain these functions requires a capability to provide the range and depth of services for the expected life of the project, including extensions. We often think of project life in terms of years, but, more than likely, it will be decades or in the case of dams, centuries. So, it is important in terms of the project to understand the life of the project as well as the sustaining events for it. When dealing with terms that can have meanings depending upon the context of the situation as well as the potential for emotion, it is important to have a sound base on which to use the word, and to be able to defend its usage.
A search of the Oxford English Dictionary shows that sustainability first appeared in the mid-1960s in a form that is consistent with contemporary usage. Its usage in the context of sustainable development is first referenced in 1972. So, it is a relatively new word. The On-Line Oxford English Dictionary defines sustainable development as follows: sustainable development n. (a) Econ. economic development which can be sustained in the long term; (b) Ecol. utilization and development of natural resources in ways which are compatible with the maintenance of these resources, and with the conservation of the environment, for future generations.
When developing a project it is necessary to be able to determine the current and future needs of the project and the ability of the providers of the future to meet those needs. To carry out the sustainment work of maintenance will require facilities and workshops of different sources. Although these are technical designs, they are controlled by other factors such as planning laws. Therefore, to start developing a definition for sustainability we need to start by considering the wider meaning of sustainable development. Reading activity 1. 1 Selected reading 1. is the Sustainable Development Guidelines for the Brisbane City Council which is a large local government body in Queensland Australia (Brisbane City Council 2005). This reading will provide more indepth detail about sustainable development as required by a local government authority. On completion of this reading, carry out research to find out what your local government authority requires in terms of sustainable development. Compare the two approaches. Selected reading 1. 2 is a paper based on the work done by the Western Australia government on sustainability (Hartz-Karp & Newman 2006).
Governments at all levels have an interest in sustainable development, and this paper describes the issues in setting up a sustainability program from first principles. After completing these readings, reflect on the wider issues of sustainability and the sustaining outcomes described by Blanchard. Can you identify the links between the different needs? © University of Southern Queensland 4 MGT8021 – Project sustainability management 1. 2 Reporting sustainability Given the diverse industries involved in projects, it would be difficult to have comparative and transparent reporting without some form of consistent process.
This is achieved though the Global Reporting Initiative™ (GRI) (Global Reporting Initiative 2008). The GRI is the world de facto standard on sustainability reporting. This is achieved though a set of guidelines, currently known as the G3. The purpose of these guidelines is for organizations to report their social, economic and environmental performance as routinely and with the same discipline as the financial reports. Many organizations routinely report on their sustainability credentials using the GRI G3 guidelines as the reporting standard.
Reading activity 1. 2 Log onto www. globalreporting. org and familiarize yourself with the general content of the site. Read the G3 Guidelines to appreciate the range and depth of issues addressed in sustainability reporting. As can be seen from the G3 Guidelines, reporting imposes a significant workload on an organization. Also, as this is an important communication document for the organization, some industries can expect to have their sustainability report critically evaluated by groups within the community. Reading activity 1. 3
Log onto websites for large organizations such as those suggested below and do internal searches for sustainability. Read these approaches and reports and see the extent to which this work is done. Now, if you were on a project within an organization such as this, with these reporting requirements, how would you approach this work? ? BHP Billiton at www. bhpbilliton. com ? Rio Tinto at www. riotinto. com ? Hydro Tasmania at www. hydro. com. au 1. 3 Sustainability impacts on management of projects Projects do not occur in a vacuum. They occur in a business environment that is closely monitored by many people.
Many of these people have no direct involvement on the project, but they are interested in it because of the way it could affect their lifestyle or the natural environment in some way. Traditionally, we talk about the shareholders of a project. Increasingly, business is being forced to consider Triple Bottom line (TBL) reporting. In this paradigm, shareholders are replaced by stakeholders. From a project management approach it is now necessary to make sure that a broader range of stakeholders than just shareholders is clearly identified. It is now © University of Southern Queensland
MGT8021 – Project sustainability management 5 necessary to address the needs of stakeholders other than just shareholders, and these could be competing interests. Reading activity 1. 4 Read selected reading 1. 3 on sustainability in business (Dorf 2001). Consider the added requirements that emerging sustainability issues are placing on business. How do these issues get included in the overall budget for a project? As a project has a future life, it is not good enough to reinvent the past. It is necessary that you be able to consider future issues.
These may be unclear early in the life of a project; but, you need to attempt to develop some idea of what sustainability issues will impact the future of the project. For example, a project might be a suburban rail system with an expected life of 40 years. How do you plan for appropriately trained people to maintain the system over the 40 years? One of the most critical aspects of through life project sustainability is obsolescence. The obsolescence could be in the form of parts, tools, facilities, or skills. At a higher level, obsolescence could be due to the technology or societal factors.
An example is the demise of society’s acceptance of coal-fired power stations over the last few years. Obsolescence management is an important aspect of project management sustainability and requires good skills in understanding technology from all aspects. You need to be able to anticipate the changes that are likely to happen. This anticipation will usually rely upon reading about relevant and complementary topics as well as seeking specialized opinions. The reference list includes books that provide approaches to future issues and problems.
Even though it may seem unrealistic at this time, carefully crafted future thinking may position your project far ahead of anything else at that time. The book Cradle to Cradle (McDonough & Braumgart 2002) is a good example of addressing the challenges we need to address. In the classic through-life approach we talk about ‘cradle to the grave’ to reflect that at the end of its useful life, equipment is disposed of in some way. In the ‘cradle to cradle’ concept the emphasis is on designing products and their packaging so that at the end of useful life they are regenerated, rather than just discarded thoughtlessly.
Remaining Useful Life (RUL) is one of the measures of performance that is often used to asses an asset. This is usually calculated on classical economic bases to get the most profitable life out of an asset. However, it may be that other criteria included in the G3 or Triple Bottom Line reporting are the drivers of the Remaining Useful Life of the project. When considering the sustainability impact on projects it is necessary to take a systems view and think proactively about the through-life sustainability issues of a project.
Just because the issue seems unrealistic at this time, does not mean that it could not turn into a significant problem to resolve in the future. That is, significant management problems may be created for the future. © University of Southern Queensland 6 MGT8021 – Project sustainability management 1. 4 Sustainability considerations for project sectors In a practical sense, sustainability issues are driven by Environmental Impact Statements. There are two broad considerations: statutory and voluntary.
In some projects (such as mining) there is a statutory requirement to perform an Environmental Impact Assessment (EIA) and publish the findings in an Environmental Impact Statement (EIS). Don’t get caught up in the actual terms, as there is little consensus on what constitutes an EIA or an EIA. In most cases, it will be decided by the circumstances of the project. On other projects there may not be any statutory requirement; however, given the attitude of the community towards major projects, there may be a need for voluntary consideration of the issues addressed in Environmental Impact Statement requirements.
It is not possible to identify all considerations for all sectors and table 1. 1 provides a summary of the key general considerations to be addressed. Table 1. 1: Environmental considerations by project sector Sector Considerations Aviation Air worthiness, passenger comfort, passenger safety, reputation Property Physical appearance, occupant safety, public safety Engineering Design strength, maintenance, maintenance support, integrity Infrastructure Service provision, public safety, extremely long life Software Media, programming skills, configuration, documentation
Quite often there are numerous regulations that prescribe the issues to be considered for sustainability. This is achieved through environmental investigations into a particular project. The Wyaralong Dam is a new project to build a dam near Beaudesert, south of Brisbane in Queensland, Australia. This project requires an Environmental Impact Statement, the details of which are available at: http://www. deedi. qld. gov. au/cg/wyaralong-dam-project. html Log onto the URL above and skim through the scope of considerations for such a project. Now, log onto the URL below for a fact sheet on environmental impact statements: http://www. pa. qld. gov. au/register/p00320aa. pdf While at this site navigate to the various links to obtain a wider perspective of the considerations of the environmental impact statements. Focus on the first three elements of this fact sheet. © University of Southern Queensland MGT8021 – Project sustainability management 7 ? assess the potential adverse and beneficial environmental, economic, and social impacts of the project; ? provide information to the public about the project and its impacts; ? obtain input from the community and stakeholders about the project, its impacts and management;
These three elements address the core considerations that need to be addressed to demonstrate the sustainability of the project. Although there are many elements listed in the fact sheet, it is realistic to assume that if these three elements are not done correctly the project will find progress difficult for a number of reasons not associated with the technical aspects of the project. A significant issue that faces global organizations is to ensure that the sustainability considerations for projects that are legal in one jurisdiction are not illegal in another jurisdiction.
Many larger organizations have Codes of Practice or Codes of Conduct to assure an independent legal authority that the integrity of their processes is compliant. Assuring project sustainability in your sector may fall into this realm of compliance reporting. You will need to find out to ensure that this matter is addressed otherwise it poses a significant legal and financial risk to the organization. That is, how do the governance responsibilities and accountabilities drive the requirements for sustainability considerations in your sector?
To consolidate your understanding of sustainability considerations you should explore the statutory and voluntary considerations for project sustainability in your local area. 1. 5 Draft a sustainability model for a project A model is the description of reality. However, as many different people will have a diverse perception of reality, it is often difficult in a consensus environment developing a model. The risk adverse approach is to adopt a model developed by another group and adapt or adopt it for the group’s purpose. Sometimes this will work and sometimes it will not.
Even with these difficulties it is still beneficial to consider the elements of a sustainability model. Reading activity 1. 5 Selected reading 1. 4 is a report on a national sustainability initiative. Sustainability models can take many forms and have different starting points, and an example of this is the Australian National Sustainability Initiative (ANSI) (Australian National Biocentre Inc. 2004). Look at the cover photo. It shows the interface between urban and un-developed land, with a creek as the boundary. If you look at the creek you will notice that it is a series of water holes.
Now, count how many swimming pools are located in the adjoining private residences. Can our water courses sustain private swimming pools? Read through this initiative and form your own views about whether this document offers a baseline as a suitable model for sustainability? If it does: how and why; if it does not: how and why not? © University of Southern Queensland 8 MGT8021 – Project sustainability management The basic model for sustainability is based on the balance between economics, ecology and society. Dorf (2001) paragraph 2. 3 addresses this triple bottom line approach.
Figure 1. 1 provides an approach to a general model for sustainability. Figure 1. 1: The interdependence of economics, ecology and society (Source: Dorf 2001, p. 43) In this model the three elements of triple bottom line accounting are divided into four main groups of corporation, cultural values, community, and person. These groups are further subdivided into twelve components to be considered. In your current or future experience you will come across models with more than 100 components. Dorf (2001, p. 51) lists ten principles of sustainable business practices.
There practices were developed by the Coalition for Environmentally Responsible Economics (CERES). In these examples from Dorf we see approaches to models based on a relatively few components. In drafting a model it is suggested that you work with 10–12 components to keep it understandable. If there are too many components it will be difficult to maintain comprehension of what is being modeled and this will make it difficult to communicate your model. Key aspects will get lost in the minutia of the detail. The twelve points proposed in figure1. are analogous to the standard twelve points of the compass, and this makes it easy to present to a wider audience. Other approaches to a model include the G3 reporting framework (Global Reporting Initiative 2008). The G3 describes how sustainability should be reported and this makes it a model in its own right. But this is a very detailed approach and is probably better approached through a more general higher model such as in Figure 1. 1. When drafting a sustainability model it is necessary to collect as many approaches to a model as is possible and to make them as inclusive as possible.
The key issue is to be able to find the balance for your project that is accepted by the wider stakeholders, and does not trivialize important issues. This might mean that you have to research many aspects of the project, other than its technical components in order to draft a good model. In the supplementary reading list are several titles that provide a range of views to consider when developing project management strategies and plans. © University of Southern Queensland MGT8021 – Project sustainability management 9 In this module we look at sustainability as a separate issue.
However, it must be seen as part of the quality management system of an organization. ISO9000 is a set of standards for quality management maintained by the International Organization for Standardization , and proposes figure 2. 1 as a model for the delivery of quality within an organization. Sustainability is part of the quality system and should not be treated separately from it or exclude it. In this context, the quality system should also include project management standards such as those in the Guide to the Project Management Body of Knowledge (PMBOK) (Project Management Institute 2004).
Thus, the key drivers in the project are addressed through the one paradigm of quality. Figure 1. 2: Model of a process-based quality management system (Source: ISO9000 2006, p. 3) In the quality diagram shown in figure 1. 2, the various stakeholders are clearly identified as input customers who are imposing requirements on the system. In the product realization phase, (the project) the requirements come to life and treated as part of the continuously improving aspects of the quality management systems. For those who use Six Sigma processes in their organization, the same link is made.
A model for sustainability should not be seen as a separate model, but inclusive of and derived for and from the quality management system. All of the sustainability issues and considerations that we have addressed can be addressed within the quality management system model. This is probably the most powerful model to represent the commitment of the organization to sustainability. Conclusions Projects are an important mechanism to deliver the goods and services of all types that we require for living. This also includes the delivery of goods and services in the aid of others or natural disasters. University of Southern Queensland 10 MGT8021 – Project sustainability management Projects do not exist in a vacuum and impact on all aspects of society, economy and resources. This is represented by the triple bottom line approach to accounting, and this puts projects beyond the classic economic theory decision processes. There is increasing pressure on organizations to deliver projects that are more than simply good profit to the shareholders. The current and increasing requirement emphasizes the need to ensure that the project also brings benefits to society as a whole.
To be able to consider this wider systems approach, it is necessary to proactively adopt an approach to projects that places correct emphasis on components that affect the sustainability of the project. These components could be as economically obtuse as placing high value on areas of biodiversity as the more measurable of higher levels of Earnings Before Interest and Taxes (EBIT). Being able to successfully navigate through sustainability issues is an increasingly important skill of the project manager.
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