Sustainability matters to all of us. We can talk until the cows come home about reduced carbon concrete, Just Stop Oil and the paradox of using AI to solve the climate crisis caused by burning fuel to power AI. But let’s get specific — let’s look at what our SIGs can do... Let’s also bring together world experts, local experts, ideas people, those who run organisations and make investment decisions, to build on knowledge and experience to create something with a foundation in practicality. Let’s have an APM conference that makes a difference.
The APM Benefits & Value SIG and Governance SIG joint conference A sustainable future – governance, leadership and benefits. What will make the difference? is being held on Tuesday 10 October, Crowne Plaza King’s Cross, London UK.
The conference will consist of three themes and this blog looks at these from a benefits point of view. Each theme will be led by a main speaker, who will outline the scope of the theme, followed by three parallel sessions where speakers expand on different aspects of the main theme. You will be able to contribute to these sessions, and learn from each other, and we’ll publish both the speakers’ submissions and your contributions.
Putting a value on sustainability
Benefits and value management has always been torn between the short-term — profit as soon as possible — and the long-term consequences for the organisation, its stakeholders and wider society. Discounted cash flow tips the balance in favour of the short-term, and there are some arguments about whether everything should or even can be reduced to a financial equivalent. Social Value International proposes that we should report the impact and then show a financial equivalent, on the basis that most investment is financial so the return should be too.
But before we even get to that, there’s the debate on how to measure and report benefits and dis-benefits like air pollution, mental illness and gender inequality.
In social value there’s a concept called LM3 or Local Multiplier 3 (a “mini GDP” for each project, how much benefit the immediate beneficiaries get as a result of having more to “spend”, who are the next level of beneficiaries and what do they get; and who are the beneficiaries of the “spend” of these beneficiaries). This process is quite involved and it would be asking too much for each project to calculate this each time.
However, we’ve done LM3 for pilot projects and I believe that we understand enough to start to assemble some rules of thumb, so the project team can say “if we do this, then the rule of thumb says it affects these stakeholders in this way, and we can bank that as benefits”. For example:
- Air quality is not an end in itself, it contributes to health and well-being;
- Mental health and acceptance of diversity contribute to a happier, more creative community and a better functioning society.
Our conference will include a dialogue on whether the financial equivalent is appropriate or not, and whether lookup values are an adequate substitute instead of calculating the LM3 for each project.
The United Nations set up a committee to create the Sustainable Development Goals (SDGs) — 17 things we have to get right to avoid a dystopian nightmare.
It’s easy to concentrate on climate change and to exclude all the other goals, but that would be a mistake as each goal is just as important for a good quality of life. However, Climate change is arguably the most easily measured. The increase in average temperatures shows up as heat waves, famine and drought that are easy to quantify — how much is the productivity of agricultural land affected? How much real estate will be lost due to rising sea levels or desertification, and what is its commercial price? UN SDG committee has developed this so that governments can use measures and metrics and commercial and third sector organisations have access to these measures and metrics too.
The conference conversations on measuring and reporting will be interesting and will be led by people with experience — you!
Changes in governance when sustainability is the goal
Good governance ensures that the lessons of previous projects are used, and that the consequences of a project are understood.
There’s a saying, “What gets measured gets done” and if we measure the amount of money, then we will only see an amount of money. All of the organisation’s priorities will lean towards getting more of what is being measured and reported — and unfortunately money is not the activity. Money is a by-product of customers and effectiveness and as customers are a by-product of quality or convenience, effectiveness is also a consequence; if you chase only money, you probably won’t get very much money. Governance based on money is poor governance.
If governance looks inward, to the organisation alone, then real consequences in the outside world won’t be part of the governance process. So governance needs to change too. Governance needs to consider the impact on the environment, on community, on society, as well as on ensuring that there is money for future investment.
We’ll be asking what changes are needed in the governance of a project if it’s looking beyond the delivery and into the future use, life cycle and disposal of a project.
Share your thoughts
The conference will include a lot of contributions from you and your fellow delegates. We don’t know the answers, but we are assembling people who have experience and evidence to explore what we do know and we’re inviting you along to contribute your experience and your thoughts too.
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