Identifying risk and innovation through Sustainable Change

Delivery Assessments

Michael YoungBSc, MBA, IPMA Level A©, CPPD, FAIPM, FAPM,

FAIM, MACS(Snr), MCIPS, CPAdjunct Associate Professor

www.gpm.world

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Who or what is GPM?• Sustainable Project Management Professional

Development Organization • Services in over 145 Countries

• Training through partners (Corp., University, Association)• Certification of individuals (GPM-b™, GPM®, and GPM-m™)• Methodology (PRiSM)• Organizational Sustainability Assessments (PSM3™)• Centre of Excellence• Standards (P5) Walking the Talk

Our

Timeline

A few

Highlights…

2010

Just a laptop and an idea

Launchedcertification system

2013 Became a signatory to the UN Global Compact

Participated in first UN Summit on Sustainable Development

Became Signatory to UN Business for Peace

The GPM Reference Guide to Sustainability in Project Management Published

The GPM-b and GPM-m Certifications are introduced

Received IPMA Achievement Award

Received World HRD Award

Started the University Partner Program

100 Countries Represented 130 Countries Represented 145 Countries

PSM3 Assessment Model Launched

Signed MoU with IPMA and GAPPS

Signed MoU with UNOPS

Attended UN +15 Summit and General Assembly

Attended COP21 at request of UN

A whole lot more

Launched the GPM Sustainability Centre of Excellence

Signed UN Anti-Corruption Call to Action and contributed to the 10th Principal Summit

Launched Sustainable Agile Training

Launched Sustainable PRINCE2 and MoU with APMG

Published the GPM P5 Standard for Sustainability in Project Management (English, Spanish, Dutch, Mandarin)

Regional OfficesEstablished

PRiSM MethodologyEstablished

Training Programs Established

Awards Program Launched

2011 20122009 2013 2014 2015

Where GPM operates

The P5™ Standard for Sustainability in Project Management

So what’s the problem?

Source: Antonio Nieto-Rodriguez (2012): The Focused Organization, Gower, London

Impacts Across the Value Chain

Raw materials Suppliers Inbound Logistics

Company Operations Distribution Product

UseProduct

End of Life

Increasing Positive Impact

Minimizing Negative Impact

What’s at risk?

Source: http://www.mckinsey.com/insights/consumer_and_retail/getting_the_most_out_of_your_sustainability_program

Research Shows that the value from sustainability challenges is substantial

Challenge Example

Regulation/Reputation

Rising operating costs

Supply-chain disruption

• Restricted license to operate• Reputational damage based on perceived

misuse of resources

• Raw-material costs driven up by supply/demand• True cost of water or carbon reflected in prices

• Production delay or cancellation due to lack of access

• Especially significant for local resources – water, power

Potential Impact % *EBITDA

70

60

25

*Earnings, interest, taxes, depreciation, and amortization

Brand and reputation damageDamage to reputation/brand is the top risk facing organisations in 2015

AON Global Risk Management Survey

It takes 20 years to build a reputation and 5 minutes to destroy it Warren Buffett

Once reputation damage has occurred, it can take the share price at least two years to recover the lost value.

Georgia Tech study

• The industry sector is exposed to a number of unknown or unidentified social, environmental and economic risks, often in the supply chain, which can have a significant impact of brand image and reputation

The high profile supply chain failures of recent times have inflicted heavy reputational damage on some leading global brands , and investors want to insure against such a risk

ACCSR Whitepaper: First five steps to a sustainable supply chain

How would the following disclosures about a prospective investment affect your investment decisions?

12%

15%

73%

15%

12%

73%

Risk or history of poor Environmental Performance.

2014 2015

Reconsider Investment No Chance in investment Plan Rule out immediately

How would the following disclosures about a prospective investment affect your investment decisions?

12%

14%

75%

9%

15%

76%

Risk in supply chain not addressed

2014 2015

Reconsider Investment No Chance in investment Plan Rule out immediately

How would the following disclosures about a prospective investment affect your investment decisions?

22%

24%54%

19%

18%63%

Human rights risk from operations

2014 2015

Reconsider Investment No Chance in investment Plan Rule out immediately

Changing mindsets and expectationsEmployment • A recent survey of more than 3,700 students at top business schools showed

nearly half would chose a lower salary if it meant working for a company with better environmental environmental practices.

• About 20% also said they would not work for a company with bad environmental practices despite what the salary was.

Products• 87% of consumers in the United States believe that companies should value the

interests of society at least as much as strict business interests.• Millennials are twice as likely to buy from brands with good management of

environmental and social issues, and twice as likely to check product packaging for sustainability performance.

Source: Yale University, World Business Council for Sustainable Development and the Global Network for Advanced Management survey, 2015

Executives Speak Up

77%

Action on climate change is an urgent priority for my business

Climate change will create opportunities for growth and innovation for my company in the next 3 - 5 years

80%

Data based on survey of 75 CEOs of Caring for Climate participant companies; data represents proportion of respondents selecting “agree” and “strongly agree”.

62%

CEOs believe they can not quantify the value or their sustainability initiatives

CSR projects are not delivering value

• Companies are hampered by poor coordination and a lack of logic connecting their various programs

• CSR programs are often initiated and run in an uncoordinated way by a variety of internal managers

• Best-practices companies operate CSR programs that are aligned with:• the companies’ business purpose• the values of the companies’ important stakeholders, • the needs of the communities in which the companies operate

Source: https://hbr.org/2015/01/the-truth-about-csr

And the net result…• Shareholder backlash• Increased cost of capital• Lower product sales and reduced consumer demand• Reduction in share price and company valuation (listed company)• Loss of donors, sponsors and supporters (not for profit)• Damaged brand and reputation• Missed opportunities to save costs

As the CEO, do you want this to happen on your watch?

Sustainable Change Delivery

• Aims to maximize the social, economic and environmental value that the change initiative’s investment objectives or resulting asset brings.

• It also aims to minimize negative impact (economic social and environmental) from the method and technique.

RISK

Capi

tal B

enefi

ts

Bran

d

Opp

ortu

nity

Costs

Threats

Rumors /

Green washing

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Sustainable Change Delivery Assessments• Projects are vehicles for change – much easier

to implement sustainability through projects• Using the urgency or driver of organizational

change

• GPM with PSM3 raises awareness of:• what sustainability is, • what areas of sustainability are important and should be

focused on, • where they believe they are in these key areas, and• where they should invest limited time, capital and

resources• Identify key sustainability risks in the value chain

What is PSM3?

ProjectsProduct Impacts

Objectives & Efforts | Lifespan & ServicingProcess ImpactsMaturity and Efficiency

Society(People)

Environmental(Planet)

Economic(Profit)

Labor Practices & Decent Work

Society and Customers Human Rights Ethical Behavior Transport Energy Water Waste

Return on Investment Business Agility Economic

Stimulation

Employment

Labor/Management

Relations

Health and Safety

Training andEducation

OrganizationalLearning

Diversity andEqual

Opportunity

TrainedProfessionalEmigration

CommunitySupport

Job/Unemployment

Public Policy/Compliance

Customer Healthand Safety

MarketCommunicationsand Advertising

Customer Privacy

Cultural Impact

Non-Discrimination

Freedom ofAssociation

Child Labor

Forced orCompulsory

Labor

Investment and

ProcurementPractices

Bribery andCorruption

Anti-Competitive

Behavior

DigitalCommunicati

on

Traveling

Transport

Energy Used

Clean EnergyReturn

Renewable Energy

Water Quality

WaterConsumption

WaterDisplacement

RecyclingPractices

End of life disposal/

reusability

Waste Disposal

Co2 emissions

Air Quality

Noise Pollution

Good Neighbor

Benefit CostRatio

Direct FinancialBenefits

Sustainable Return on

Investment

Net PresentValue

Flexibility/Optionality

in theproject

IncreasedBusinessFlexibility

Local Economic Impact

Sustainable Profitability

/Indirect Benefits

The GPM® P5™ StandardFor Sustainable Project Management

With Portfolio inclusions

Materials and Procurement

Materials used by

weight or volume

Recycled input

Materials

Sustainable Procurement

Practices

PortfoliosBusiness Case Management

Organizational Commitment & Usage | Standards & Competence | Continuous Improvement

We assess a

gainst

Some of the Sustainability Standards we Map to

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A Different Approach to Assessments• Focus on raising awareness and education and providing a model to

understand, prioritize and strategize• Focus on assessments not audits• Systems and discipline focused (not process or standards focused)• Tailorable context specific model• Capability maturity grid

• Providing a tailorable assessment framework• Allowing for appreciative inquiry as opposed to a problem focused

approach• A unique element / question ranking system• Avoiding misusing ordinal scales

A Tailorable Context Specific Codel

• Different cultures, countries, industries and organizations have different areas of focus and priority

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Is required for sustainability

Environment(Planet)

Transport

Local Procurement

Digital Communication

Traveling

Transport

Energy

Materials

Energy Used

Emission / Co2 from Energy

Used

Clean Energy Return

Water

Water Quality

Water Consumption

Water Displacement

Waste

Recycling

Disposal

Reusability

Incorporated Energy

Waste

Category

Sub-Category

Elements or Questions

A Tailorable Context Specific Model

The analysis and reporting is tailored to each organizations goals, objectives and priorities

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Is required for sustainability Takes into account Different cultures, countries, industries as organizations have different areas of focus and priority

Outcome Analysis = Materiality

Organization

Supply Chain

Stakeholders

0 5 10 15 20 25 30

Organizational Goal - Social

012345NA

Organization

Supply Chain

Stakeholders

0 5 10 15 20 25 30

Facilitated Review Social

012345NA

Organization

Supply Chain

Stakeholders

0 10 20 30 40 50 60 70

Organizational Goal - Environmental

123456Series7

Organization

Supply Chain

Stakeholders

0 5 10 15 20 25 30 35 40 45

Facilitated Review - Environmental

123456Series7

Organization

Supply Chain

Stakeholders

0 2 4 6 8 10 12

Organizational Goal - Economic

012345NA

Organization

Supply Chain

Stakeholders

0 2 4 6 8 10 12

Facilitated Review - Economic

012345NA

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32 410 5Undefined

Zero sustainability practices in place and is at high risk. Ignores environmental and social regulations.

ProvisionalHas Ad-hoc sustainability policies and practices in place with little consistency.

FoundationalManages liability and adheres to all labor, health & safety, and environmental regulations

EssentialMakes proactive efforts to improve profitability by becoming eco-friendly.

OptimizedAligns corporate principles and values towards a sustainable model. Seeks out opportunities to improve products and services

PrincipledBases decisions on value creation to improve society and the environment through their products and services.

Assessment Ranking is less “Subjective”A unique model for evaluation

Outcomes that provide valuePeople: Labour practices & decent work

People: Society & Customers

People: Human Rights

People: Ethical behaviour

Planet: Transport

Planet: Energy

Planet: Water

Planet: Waste

Planet: Materials & Procurement

Profit: Sustainable Return on Investment

Profit: Business Agility

Profit: Economic StimulationProfit: Business Case Management

Practice: Governance

Practice: Leadership

Practice: Portfolio Management

Practice: Asset Lifecycle Focus

Practice: Value Management

Practice: Benefits Management

Practice: Risk Management

Practice: Stakeholder Engagement

Practice: Change Management

Practice: Processes

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0

1

2

3

4

5

Organizational Goal

Facilitated Review

GPM Review

Outcomes for:• Your Organization (Operations and Change)• Your Supply Chain• Your Distributors, Customers and Society

Why?• GPM’s core values lie in the balance of where sustainability and project management converge

• Project management is the leading approach to implementation that delivers measurable results.

• As change agents, project managers have a unique opportunity to deliver economic and environmental results for societies.

• For too long the focus of sustainability has been solely on ‘operations’. For too long projects we have delivered have largely focused only on delivering profits without considering the environment or the impact on society.

• Sustainability without project management is nothing but a good idea that talked about but is never translated into tangible results.

• Project management without considering sustainability misses an opportunity and also shirks our ethical obligations by minimizing our impacts, which will felt the greatest by our children and their children.

• Sustainable project management is the space where we do our best work and where we believe the can make the greatest change. So when we incorporate sustainability and project management we deliver benefits to the CEO, shareholders, investors and also positively impact the environment, societies without compromising profits.

• It comes as no surprise that sustainable project management is the number one emerging trend in project management.

• “It has now been proved repeatedly across different industries and market segments, that sustainability initiatives can act as strong differentiating platforms for organizations” (Harvard Business Review)

Engagement plans Bronze Silver Gold Platinum

Discovery session Self-assessment review Assessment plan On-site 2-day PSM3 assessment High-level report on PSM outcomes

Full diagnostic report Risk assessment CSR Program evaluation Detailed Action Plan Full organisational audit to identify evidence that validates PSM3 results

Development of a GRI-Compliant reporting framework

Corporate university training program for staff

Next Steps1. Complete a self-assessment

2. Select the engagement plan

3. Lock in a date to start

EssenceGives you, the CEO, piece of mind, protects corporate value and differentiates your business from your competitors.

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Thank you!

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