Over the past two decades’ reputational risk for organizations has become more complex as consumers, stakeholders, and investors have increased demand for eco-friendly and socially conscious products and services.
Guiding frameworks for non-financial reporting from the GRI and UN Global Compact have put sustainability into the crosshairs of executive focus and the increase in non-financial reporting is becoming more the norm.
The integrated reporting debate, however, is challenging organizations out of their comfort zones as they strive to understand what is material and what is not. Investors need to understand expected performance and long-term strategy beyond profit and loss and currently accepted reporting practices to place an emphasis on sustainability in operations and supply chains which simply isn’t enough.
Research indicates that project work accounts for roughly 23 trillion U.S. dollars (30% of the global GDP) and as such, an increased focus on project sustainability has begun.
On June 25th, during a plenary session of the UN Global Compact’s founding Executive Director Georg Kell stated, “I guarantee that within four years, the marketplace will have changed from within because sustainability and its reality is becoming a transformative force.
…finally, asset managers are waking up to the basic reality that sustainability pays off. Long-term financial success can only be assured if companies also good on governance, on social behavior, and environmental stewardship.
Failure on any of these three pillars will make it impossible for companies to sustain success over time or to become successful.”
This shift is important for six key business reasons.
- Sustainability will serve as key factors in decision making when selecting and prioritizing projects
- Approaches to management are being augmented to include sustainable practice
- Project performance will no longer be based solely on if the project was within budget, met the scope, and was completed on time.
- Risk Management from a brand perspective will extend deeper into the product lifecycle
- Organizations ability to differentiate in the market will depend on their ability to deliver products and services sustainably from a true cradle to cradle or cradle to grave perspective by including the project lifecycle into the reporting equation
Business will change whether it wants to or not.
The last bullet point is the most important. When it comes to the future success of business, there is no more polarizing topic than the impact that millennials are having around the world.
Yes, they might come across as a bit entitled or even brash but this generation fully grasps the challenges the world is facing, has the out-of-the-box mentality to tackle them and that has tremendous value. They comprise of 21% of consumer buying power and now make up the largest percentage of the workforce..
A 2015 study by Millennial Branding and Elance-oDesk, states that 53% of hiring managers claim that it is difficult to find and retain millennial employees as 58% of millennials expect to leave their jobs in three years or less. This is not surprising as research by sustainable brands that indicates that 80% of millennials want to work for companies that care about their impacts. They hold transparency as one of the top qualities they look for, are drawn to projects that play to their strengths, and prefer a collaborative team approach.
With the scramble on to adapt business practices to accommodate this new workforce, projectizing is increasingly becoming more attractive as projects are temporary in nature and provide a structure that accords with the millennial mindset.
While millennials have yet to penetrated the executive suite en masse, it is only a matter of time. Where in the past, the business of business was business, it is fast becoming sustainability.
If organizations do not adapt their approach to projects with sustainability as a central part of that equation, they won’t need to worry about investor demands for long term success as they simply won’t be around very long.
To learn more about sustainability in project management check out our free resource The GPM P5 Standard for Sustainability in Project Management. or our approach PRiSM