How do you align project portfolios with sustainability goals?

Project Portfolio Management is a strategic framework used to manage and align projects with objectives. It includes four main process groups: 1. Evaluating and selecting projects for strategic alignment and resource optimization. 2. Ensuring the portfolio aligns with the organization's goals, risk tolerance, and resource capabilities, including documentation and effectiveness assessment. 3. Evaluating and Reporting Portfolio Performance: Setting performance benchmarks, monitoring against these, and reporting on performance and benefit integration. 4. Balancing and optimizing the portfolio: maintaining and adjusting the portfolio for optimal performance, resource efficiency, risk management, and adaptability to strategic changes.

Sustainability should be strategic goal for all companies considering increasing demand for energy with exponential growth of artificial intelligence applications and emerging technologies. Also, artificial intelligence can be applied in reducing energy consumption and improving efficiency. Companies need to have a balanced portion of the project portfolio with sustainability goal which will also aid in controlling the increasing cost of energy.

?? In my opinion, understanding the intricacies of PPM is paramount for its successful implementation. ?? Project Scope PPM goes beyond task tracking; it aligns project scope with business goals, ensuring strategic importance in every initiative. ?? Resource Allocation Effective PPM optimizes resource distribution. It analyzes the portfolio, allocating human, financial, and technical resources efficiently. ?? Inter-Project Dependencies PPM identifies and manages project dependencies, prioritizing them for timely outcomes. ?? Risk Assessment PPM identifies, analyzes, and manages portfolio risks, proactively mitigating issues. ?? In conclusion, PPM aligns projects with strategy, optimizes resources, and preempts risks.

A good 5-year plan, aligned with the company's values and strategic planning, is fundamental to the sustainability of the business. It is important that senior management understands that projects that do not provide a financial return, for instance: projects involved in regulatory compliance, safety and security, are as important as projects that will provide a financial return (investing projects), as this is a fundamental pillar for the company to be able to balance the portfolio appropriately.

As I apply and balance sustainability and portfolio goals, the sweet spot is to fully assess the cost/benefit AND the long term risks of the outcomes. For only seeking short-term financial outcomes at the expense of long-term sustainability impacts, will lead to future sustainability risks starting to manifest. The proper balance of short and long term impacts, is the sweet spot for authentic leaders.

Sustainability is crucial for project portfolios because it ensures that projects deliver meaningful outcomes aligned with an organisations sustainability goals. A project portfolio can incorporate sustainability by embedding sustainable principles into every stage of the project lifecycle, such as sustainability in design.

This challenge needs to be addressed even before the portfolio management. In the capital allocation decision-making. To do this, companies need to: 1. Generate more CapEx projects directed towards sustainability (CO2 abatement and offsetting, adaptation, nature-based solutions, etc.) 2. Ensure that these projects are considered in the portfolio analysis 3. Ensure that all projects have measurable, tangible sustainability metrics and that the portfolio effects are captured (financials, GHG metrics, asset-specific climate risks, etc.) 4. Run a proper portfolio optimisation that considers a holistic value framework (including not only financial return but also risk, operational, and strategic metrics in decision-making)

Sustainability in relation to PPM is merely a strategic category an organization could use to score all the initiatives in the portfolio. It should be one of the elements along with strategic impact, financial impact and risk and compliance. There are several more categories one could decide to use in the scoring of initiatives. Maybe diversity is important for the company. PPM starts with helping the board decide on which elements they want to score the portfolio and if they want to pursue a certain allocation of resources within these categories. From there on it's just like any other metric from a PPM point of view.

As many organisations are not yet 'sustainable' ready in the wider sense, notwithstanding the day to day changes that they may have made, it is important to understand the reality that they exist within. Depending on the cutlure, leadership, and maturity of an organisation (and more), will extend the ability to become more sustainable from a PPM perspective or not. First step would be to understand if the projects in flight are looking at benefits or metrics relating to sustainability. Can any changes be made? Pipeline projects should be encouraged to have the conversation early on around the targets that are being sought once a project is embedded. Do ideas need to change or be parked for now? As with most changes, do a reality check first

Proper risk management with a long term view, and fiscal accountability. When equally valued, there may be short term reduced revenue, but reflects the long-term risk profile.

Start by setting clear sustainability goals like the UN Sustainable Development Goals (SDGs), and align them with the company's values or market opportunities. Decide how to measure alignment with the selected goals by considering what metrics to evaluate and what source of data to use. Implement a portfolio management solution that aligns the entire process to enterprise standards and enables the integration of sustainability efforts. Configure the portfolio management tool to measure the impacts relating to defined key areas like water, land use, and carbon emissions. Private investors can play a crucial role by redirecting their investments towards the sustainability goals.

Look at your role descriptions. Typically organisations don't recruit with a view on 'are our people being responsible already'. Neither do they test for awareness and education to help drive the necessary conversations. Lastly, ensure that your policies mean more than the paper they are written on and ensure education is available and open mindedness is commonplace to have the tough conversations, and sometimes make the hard (and expensive) decisions.

The Portfolio Management Office is uniquely placed within the organisation to make a difference to sustainability targets because of its role in portfolio prioritisation and control. A few considerations: 1. Make sure the business case takes into account the environmental consideration alongside costs and benefits. 2. Capture and track sustainability-related benefits so that success can be realised and evidenced throughout the project delivery (and beyond). 3. Monitor overarching KPIs and metrics that relate to the organisational sustainability goals. If everything isn't on track, it might be time to consider revisiting the portfolio make-up to ensure that the right initiatives have been selected, or whether the target is realistic.

Most organisations and their people have the right intentions. The lofty UN Goals sound great but it can be hard for people to bring them down to their own reality. Encourage this, and it will help to change things.