Do you measure and place value on Environmental, Social, and Economic impacts in your projects? If not, you should.
While outcomes matter to project owners, impacts are what matter to stakeholders. Stakeholders are a person, group, or organization that has
interests in, or can affect, be affected by, or perceive themselves to be affected by, any aspect of a project, program, or portfolio. Hence, it is vital to understand what is important to them.
As outlined in ISO 21502: Guidance on Project Management, examples of external stakeholders can include Customers, Regulatory Bodies, Interest groups, Users, Suppliers, Business Partners, Finance Partners, and Shareholders (we include biodiversity as a direct stakeholder).
Project managers need to be aware of the interests of all their stakeholders and how to prioritize and take action based on a wide range of factors. When it comes to sustainability, a Project Sustainability Impact Analysis (we call it a P5 Impact Analysis) measures the impact of project activity. In effect, it is the project management equivalent to ethical stakeholder capitalism – and you should be adopting it.
Why is this important?
When done well, impact valuation covers both project-related activities’ intended and unintended effects. This includes the project’s product, its lifespan, and servicing as well as project practices. By valuing positive and negative impacts more systematically and as thoroughly as possible, impact valuation can help the project team make decisions that create value for all stakeholders – resulting in sustainable project management and outcome.
Impact valuation can also be viewed at the macro level as positively affecting the economy, the environment, and social well-being. Projects and Project Management Practices need to be framed regarding how they are contributing in favor of social and/or environmental goals.
Measuring impact can be a challenging process
Here is how we do an impact valuation at GPM
GPM’s P5 Impact Assessment covers sustainability from 46 project sustainability elements that expand to 230 when viewed from the five lenses of Lifespan, Servicing, Efficiency, Fairness, and Effectiveness.
Impact Valuations from a project perspective must be derived from the entire lifecycle starting with the business case concluding at the end of useful life and decommissioning and include all aspects of servicing.
From the figure above, we focus on Lifespan and Servicing as well as Efficiency, Fairness, and Effectiveness of project processes as they relate to the 46 P5 Sustainability Elements in P5 version 2.0
The results should be scored using a simple likert scale to determine the severity not the priority. An action item that has a low severity is still important and if it can be addressed quickly, with minimal effort, putting it off until a larger more severe issue is completed is not advised due to the fact that the range of issues being assessed span three separate domains (Social, Environmental, and Economic); and as such the action owner who is likely to be someone inside the business.
Once the project team has scored the results, the items should be mapped into a sustainability management plan where the team develops mitigation strategies, gains approvals and then proceeds to have the work completed.
This entire process is material to ESG and Sustainability reporting as it makes transparent “how” an organization delivers products and services sustainably.
This process delivers valuable Impact!
Download the P5 Standard in 13 languages at www.greenprojectmanagement.org/p5