Embedding sustainability into the heart of programme portfolios
Creating a more sustainable world is, by definition, of worldwide importance. And it’s rightly in the public eye following the COP26 summit and its goals to secure global Net Zero by mid-century and keep to a 1.5oC rise in temperature, based on pre-industrial levels.
To achieve these ambitions, organisations of all forms have a role to play. They should ensure sustainability runs through everything they do. Yet many see sustainability as a standalone initiative, and few employees have sustainability targets. To have a real impact, organisations should look to make marginal gains across an entire portfolio of work, the sum of which could contribute significantly to their overall sustainability agenda.
Organisations can do this by embedding sustainability thinking first into portfolio management and then down into all types of projects and programmes, including IT, business change, product development and infrastructure initiatives. Building a sustainability mindset and culture into both the portfolio and its constituent programmes will ensure teams consider sustainability benefits when assessing business cases for new initiatives.
Champion sustainability at the portfolio strategy level
A move towards a sustainable mindset starts at the top. The portfolio management office (PfMO), and specifically the portfolio director, should have dedicated time with your organisation’s strategy team and investment committee to ensure early visibility of strategy changes and the overall strategic alignment of the portfolio.
The ability to influence other senior stakeholders is a critical part of the portfolio director’s role. One way they can exert this influence is to link sustainability goals to business benefits. If the mindset shifts such that sustainability is seen as an opportunity tied to a payback, rather than just an overhead, then the argument to build sustainability into programme goals will be stronger.
We recommend portfolio directors use their influence to:
- ensure sustainability-focused initiatives are part of the portfolio
- champion the embedding of sustainability goals within all new initiatives.
To encourage this, ensuring the portfolio and its constituent programmes contribute to sustainability goals should be a mandatory performance objective for the portfolio director.
Build sustainability into portfolio KPIs and the PfMO mindset
The PfMO must define the sustainability KPIs to measure and how the organisation will capture the necessary data. The metrics you use will depend on your industry and the type of portfolio, and should include generic measures such as reductions in carbon footprint, water use and energy consumption or increases in recycling. If you don’t specify the metrics within the business case, then it’s easy for people to dismiss sustainability as someone else’s problem and not design it into programmes.
The team then needs to build or update portfolio dashboards to measure real progress in delivering these benefits. It’s important to capture and report the necessary data for objective proof of progress, or lack thereof. The portfolio team also has a critical role to play in ensuring the underlying platforms for capturing sustainability-related metrics are in place, and in working out where to source this data from.
Finally, the PfMO needs to build a sustainability mindset and culture within itself. This comes from the leadership and example of the portfolio director, training the team on the importance of sustainability, and recruiting people with a passion and interest in the green agenda. This will ensure the PfMO’s championing of sustainability comes from the heart, so people don’t see it as a box-ticking exercise.
Inject sustainability benefits and KPIs into every initiative
Once you’ve begun to build more sustainability into the portfolio-level, you can factor it into new programmes. This will feel harder for in-flight programmes, which may have progressed too far to embed many additional sustainability outcomes. So, the initial focus should be on new initiatives.
The PfMO should guide sponsors and programme managers on how to make their initiatives greener, based on detailed knowledge of the organisation’s sustainability goals and the KPIs being measured.
This injection of sustainability can happen through business cases, and the PfMO has two roles to play here. Firstly, they need to work with programme sponsors to ensure sustainability is a consideration when writing business cases, and that the metrics to measure their success are available. Secondly, they must ensure the approvals process for business cases includes a review of how strongly the initiative is contributing towards sustainability goals.
In much the same way as the UK Government has social value as a minimum 10 per cent weighting of the evaluation of all central government contracts, so sustainability goals should be mandatory across all initiatives.
The PfMO can coach programme managers to embed sustainability goals into their business case and ensure metrics are in place to measure progress. Over time, the PfMO will understand what measures and goals work for the portfolio, ensuring the goals set are achievable and measurably contribute towards sustainability targets.
The portfolio management office should be a centre of excellence for sustainability
The portfolio team needs to take a lead on sustainability, champion action on climate change and help embed sustainability benefits within new initiatives. They also have an active role to play in ensuring the right data is captured and made available to track progress towards sustainability goals. In effect, the PfMO needs to become a centre of excellence for sustainability.