An exploratory study of sustainability evaluation in project management

2015

Sustainability

Abstract:The continuous growth of the world population, resource scarcity and the threat of climate change pose numerous environmental and social problems to the world. Therefore, much hope is put in the concept of sustainability. Companies are increasingly coming under strong global pressure to incorporate sustainability considerations into their project decision-making process. Business projects in the construction industry are among the most important, as this sector is one of the largest sectors and of major importance for the national economy and therefore has a huge impact on the environment and society. Thus, we have to explore ways to integrate sustainability into the management of those projects. This paper presents a composite sustainability index of a project (CSIP) which has been created following a review of existing literature and a pilot research study. A pilot research study was conducted in the Lithuanian construction industry between January 2015 and June 2015. Sustainability criteria were chosen and grouped on the basis of the analysis of the literature and different standards relating to sustainability applicable in the construction industry. A survey was used to select and rank the most important sustainability criteria. The index was constructed using multi-criteria decision-making methods. The results of the pilot study revealed that practitioners in the Lithuanian construction sector attach most importance to 15 sustainability criteria. A composite sustainability index of a project combining all these criteria may be useful in assessing the sustainability of a business project and making decisions regarding project portfolio selection and financial resource allocation. When addressing the issue of financial resource allocation in a project portfolio, the decision-maker could take into account not only the project's return and risk, but also its sustainability. The understanding of this study should enable companies to execute sustainable projects, which could make a contribution to the sustainable development of organizations and thereby increase their competitive advantage.

Section: Sustainability In Project Portfolio Managementmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

An Index to Measure Sustainability of a Business Project in the Construction Industry: Lithuanian Case

2015

Sustainability

“…Silvius (2014) reported 250 publications and studies on this topic (compared to 85 publications in 2012 (Silvius et al, 2012, p. 1). However, this research field is relatively new and unexplored (Martens and Carvalho, 2013, p. 111, Brook and Pagnanelli, 2014, p. 59, Daneshpour, 2015.…”

Section: Introductionmentioning

confidence: 99%

“…Today there is an increasing understanding of the need to develop methods, tools and techniques to integrate sustainability criteria into the management of projects, as well as a growing need of knowledge and concepts how to adopt sustainability in project management (Ebbesen and Hope, 2013, p. 1, Brook and Pagnanelli, 2014, p. 61, Fernández-Sánchez and Rodríguez-López, 2010, p. 1194, Martens and Carvalho, 2013, p. 112, Tufinio et al, 2013, p. 91, Silvius and Schipper, 2014.…”

mentioning

confidence: 99%

Financial Resource Allocation in a Project Portfolio: Analysing the Necessity to Integrate Sustainability into Resource Allocation

Annals of the Alexandru Ioan Cuza University - Economics

2015

Resource allocation in a project portfolio is a complex decision-making process that is influenced by multiple and very often conflicting objectives. Furthermore, companies are coming under strong social pressure to integrate elements of sustainability into their decision-making process, which makes this process even more complex. Nowadays, the concept of sustainability is widely applied by many companies through their mission statement and strategy. It is also one of the most popular research fields for scholars. Despite the fact that sustainability is considered one of the most important challenges of our time, the integration of sustainability into project or project portfolio management (especially in resource allocation) is not fully recognised. This paper presents a literature-based analysis of the use of the sustainability concept in project management and therefore makes suggestions on how to integrate sustainability into resource allocation in a project portfolio.

“…And project management could make a valuable contribution in this context [3,4]. Today it is increasingly well understood that methods, tools and techniques need to be developed to integrate sustainability criteria into the management of projects [5,6]; moreover, there is a growing need of knowledge and concepts how to incorporate sustainability into the project management process [6][7][8][9][10][11][12].…”

Section: Introductionmentioning

confidence: 99%

Sustainability-Oriented Financial Resource Allocation in a Project Portfolio through Multi-Criteria Decision-Making

2016

Sustainability

Abstract:Modern portfolio theory attempts to maximize the expected return of a portfolio for a given level of portfolio risk, or equivalently minimize risk for a given level of expected return. The reality, however, shows that, when selecting projects to a portfolio and allocating resources in the portfolio, an increasing number of organizations take into account other aspects as well. As a result of the sole purpose (risk-return), it offers only a partial solution for a sustainable organization. Existing project portfolio selection and resource allocation methods and models do not consider sustainability. Therefore, the aim of this article is to develop a sustainability-oriented model of financial resource allocation in a project portfolio by integrating a composite sustainability index of a project into Markowitz's classical risk-return scheme (mean-variance model). The model was developed by applying multi-criteria decision-making methods. The practicability of the model was tested by an empirical study in a selected construction company. The proposed sustainability-oriented financial resource allocation model could be used in allocating financial resources in any type of business. The use of the model would not only help organisations to manage risk and achieve higher return but would also allow carrying out sustainable projects, thereby promoting greater environmental responsibility and giving more consideration to the wellbeing of future generations. Moreover, the model allows quantifying the impact of the integration of sustainability into financial resource allocation on the return of a portfolio.