World Sustainable Built Environment Conference 2017 Hong Kong

Track 6: Market Transformation & Green Building Management

Developing a Conceptual Framework for Integrating Project Risk

Management and Sustainability Objectives
Georgia Dodge GOSSEa, Cheryl Julia Kiran DESHAb, Timothy ROSEc
a Queensland University of Technology, Australia, georgia.gosse@hdr.qut.edu.au
b Griffith University, Australia, c.desha@griffith.edu.au
c Queensland University of Technology, Australia, tm.rose@qut.edu.au

ABSTRACT

It has been more than thirty years following the 1987 Brundtland report on sustainable development and
professional project management standards have not fully integrated sustainability performance requirements.
Acknowledging that while sustainable development is a critical topic area in the built environment sector, industry
accepted project management processes still do not explicitly state how to embed sustainability throughout the life
of a project. While some work has been done to determine how to integrate sustainability into some project
management processes, the use of risk management to achieve sustainability outcomes is still absent. The
challenge for both sustainability and risk management is the need to predict the future – either the future potential
consequences of a risk or for sustainability the needs of the future generation.

Recognising this deficit, the authors draw on existing literature and precedents internationally to propose an
innovative sustainability risk framework based on knowledge management to provide more intelligence to predict
future impacts and needs and integrate within the risk management processes to transform project sustainability
performance outcomes. The sustainability risk framework draws on a desk-based study that will subsequently be
confirmed through interview and survey methods.

Risk management plays a critical role in project delivery and there are opportunities to harness existing knowledge
management application to transform the risk management process to deliver on project sustainability objectives.
The implications for industry are significant, providing a potential cost-saving mechanism for managing built
environment projects, through process innovation and providing project managers with the power to influence and
achieve sustainability outcomes on projects.

Keywords: project sustainability, project risk management, education and training

1. INTRODUCTION
Projects play a fundamental role in achieving the strategic sustainable development agenda for any country and it
is imperative that projects include objectives that address sustainability. All 17 sustainable development goals set
by the UN require projects at local, regional and national levels to achieve the ambitious targets (UN, 2016). In
Australia, rating tools such as the Infrastructure Sustainability (IS) rating scheme and the Green Star rating system
have been developed to help projects and their activities achieve sustainability. Although both the Infrastructure
Sustainability Council of Australia (ISCA) and The Green Building Council of Australia (GBCA), recognise the
influence of project sustainability objectives on the achievement of local, regional and national strategic
sustainability objectives, sustainability is still predominately seen as a separate project management consideration
outside time, cost and quality objectives and is usually only considered if the project sponsor has clearly articulated
sustainability objectives. Even though there is clear evidence as describe above, that projects significantly
contribute to the local, regional and nation achievement of sustainability objectives, the conceptual base of models
and methodologies for project management has remained fairly static (Svejvig and Andersen, 2015).

In this paper, the authors review a typical project management framework, discussing its ability to support the
achievement of sustainability objectives and manage associated risks. While there may seem to be conflict
between traditional risk considerations/ objectives (time, cost and quality) and sustainability objectives they are
inherently linked through their common objective to minimise negative project impacts to future generations
(Krysiak, 2009). With this in mind, this paper focuses on the relationship between risk management and
sustainability and reviews how risk and sustainability knowledge can move risk management from a compliance

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exercise to a decision support tool that promotes the establishment and achievement of sustainable objectives on
projects.

1.1 Definitions

Both project risk management and sustainability can be interpreted in a variety of different ways, depending on
context. Project risk management is a proactive management process designed to exploit opportunities and treat
risks to secure a project’s agreed, defined and disseminated objectives (Chapman, 2013). This widely accepted
best practice definition connects both risk and opportunities to project objectives.

The most globally accepted definition of sustainability was established by the World Commission on Environment
and Development (WCED, 1987) which defined sustainable development as: 'development that meets the needs
of the present without compromising the ability of future generations to meet their own needs, integrating social,
economic and environmental goals to mutually reinforce each other’.

These definitions form the basis of this review.

1.2 Aim and objectives

The questions remains, ‘how can project management be adapted to ensure that sustainability objectives are
achieved on projects?’ Project sustainability objectives, where articulated, impact project management processes
and so demands an evolution of the traditional project management approach to address these impacts.

Risk management is critical to the success of a project and whether actively or not, all project managers manage
risks. However, it is the empowering of a project manager with the tools and knowledge to achieve sustainability
objectives, using risk management that is the aim of this paper. As such, this paper will focus on the relationship
between risk management and sustainability and review how the process and culture of active risk management
can support and promote the establishment and achievement of sustainable objectives on projects.

2. METHODOLOGY
Peer reviewed, academic journal articles published 2000 onwards were retrieved from the following databases and
search engines; Google scholar, Science Direct, Web of Science, and Emerald. The following three strings of key
words were used in the search: sustainability and project management, risk management and project management
and risk management and sustainability, which returned 514 results.

The breadth of both the fields of sustainability and risk management resulted in the need for a manual high level
assessment to be undertaken to set boundaries and focus the research. Following a topic search, content analysis
was used to ensure that the articles addressed the central research topics.

In order to make the final selection, articles had to have a ‘Quartile 1 Q1’ score from Scimago or be considered
reputable conference proceedings (i.e. published proceedings with a formal peer-review process). Five books by
reputable authors were also included, where the authors were well-referenced researchers in the field. As this
paper focuses on the relationship between sustainability and risk management, articles specific to risk modelling,
risk software, enterprise risk management or corporate sustainability were subsequently excluded. Based on these
parameters 79 papers were considered relevant to the research aim and were used for the subsequent detailed
review.

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Search String No. of Articles No. of Articles in Q1/Q2 No. of Articles Other**
Journals* in
Conferences
Sustainability and
45 24 13 8
project management
Risk management and
26 16 3 7
project management
Sustainability and risk
8 4 0 4
management
Total 79 44 16 19
Table 1: Literature review categorisation
Scimago http://www.scimagojr.com/
Other includes Q3/ Q4 publications and books

The next section presents a review of key articles defined by the initial literature categorisation, followed by the
presentation of a conceptual framework demonstrating the relationships between sustainability and risk
management as established from the review.

3. CRITICAL REVIEW OF PREVIOUS STUDIES

Substantial work has been conducted on defining sustainable projects and assessing sustainability risks at project
level, along with defining sustainability broadly and in the context of infrastructure is acknowledge, as is the use of
risk modelling techniques to priories and weight sustainability indicators. However, there is an acknowledged need
to move from the high level objective level down to a delivery level which provides project managers with an avenue
to address sustainability, throughout the life of a project, using methods they are already familiar with.

3.1 Sustainability and project management

Much work has been done to define sustainability from different perspectives and make it more tangible (Miah et
al., 2014, Bell and Morse, 1999). Additionally, work has been undertaken on how to assess whether a project is
sustainable, or not, at a planning and decision making level which addresses the initial question of whether or not
the project is an inherently ‘sustainable project’ (Haavaldsen et al., 2014), through the use of ‘sustainability
indicators’. Some literature alludes to the potential increase in up-front costs associated with delivering a more
sustainable project, such as additional design costs for ‘eco-design’, or the development of a cradle to cradle waste
management plan, or even a more inclusive stakeholder process (Ugwu et al., 2006) and while many organisations
can see the benefits of establishing and achieving sustainability objectives and outcomes, the largest barrier is
measuring investment returns (Yang et al., 2015), which means research has tried to demonstrate that pursuing
sustainability objectives can lead to better projects with minimal or no additional construction cost or effort
(Anderson, 2012).

Further, significant work has been conducted to incorporate sustainability considerations into project management
methodologies and provide high level guidance on what project management processes should consider in terms
of sustainability (Silvius et al., 2012). In addition, there is a growing recognition that ‘further development of the
project management profession requires project managers to take responsibility for sustainability’ (McKinlay, 2008),
though the question of how it can be effectively incorporated remains unanswered?

3.2 Risk management and project management

Much of the project management literature recognises the role proactive risk management plays in the success of
projects (de Wit, 1988, Cooke-Davies, 2002, Sanchez et al., 2009). However, many risk management
methodologies primarily focus on the process of risk management and analysing risks against quantifiable criteria
such as time, quality and cost (Taroun, 2014, Zhang, 2011). Recognising that projects are increasing in complexity
and uncertainty, recent literature acknowledges the limits of traditional methods of prediction and planning and
stresses the need to have multiple ways to anticipate and adjust to changes and disruptions caused by known and
unknown risks (Shiroyama et al., 2012). An additional theme identified in the literature is the cultural and
behavioural aspects of risk management and the recognition that to manage risk successfully it needs to be seen

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as more than a process, but a cultural mindset to seeing risk management as a tool for decision making and
addressing knowledge gaps (Regev et al., 2006). There is potential to move away from the application of a risk
management process and generic standards towards an informed and dynamic practice that empowers project
management to make decisions.

3.3 Sustainability and risk management on projects

There is a growing body of literature focusing on the importance of identifying, mitigating and managing
sustainability risks (Pojasek, 2011, Lenssen et al., 2014, Giannakis and Papadopoulos, 2015), predominantly at a
corporate level that usually defined risks with environmental and social impacts. It is clear from the literature
available, that assessing project risks against sustainability objectives has generally not been part of the process.

Project risk management is a very well-known and accepted area of practice, in which the risk management
process is vital and fundamentally influences the likelihood of success for any project (Stackpole, 2013).
Sustainability in terms of risk management needs more than identifying sustainability risks and needs to consider
against all project objectives as well as the different viewpoints of all project stakeholders (Silvius and Schipper,
2014). Currently the literature lacks sufficient research on assessing risk impact on qualitative project objectives
(Taroun, 2014) and while recent studies have focused on providing project managers with adaptations to current
project management processes to address sustainability risks, there is little information available for assessing
risks in terms of impacts to sustainability objectives (Maltzman and Shirley, 2011, Silvius et al., 2012). Such
information would provide project managers the opportunity to look at project risks through a sustainability lens in
addition to standard, time, cost, quality objectives and people/ resources lenses as advocated by the Prince2
methodology (Bentley, 2009) or PMBOK methodology (Project Management, 2013).

4. DISCUSSION
There is conflict between traditional risk considerations/ objectives (time, cost and quality) and sustainability
objectives and risk management is a tool to more effectively establish and achieve sustainability objectives.
Sustainability and risk management are inherently linked; firstly at the core of the sustainability definition is the
desire to meet the needs of the future generations, while risk management assesses the consequences of a risk
that might eventuate in the future. Predicting the needs of future generations creates uncertainty and a propensity
for change, and risk management can be the tool to manage the future consequences of this uncertainty and
change. Secondly, both sustainability and risk are ambiguous terms and mean different things to different people,
projects and organisations based on personal values, perceptions and experiences. This means on a project that
views, interests and preconceived concepts need to be coordinated and aligned to achieve common objectives.
Finally, sustainability objectives seek to promote a set of outcomes on a project which are robust and able to still
deliver their intended outcome even with the unpredictability of future situations and risk management is a tool
which can be used to develop effective mitigation strategies for future situation. (Gray and Wiedemann, 1999).

The above discussion suggests that decision makers and contributors to the risk management process need to
have more tailored information regarding future scenarios and risk consequences to make informed choices.
Knowledge management can help address both future planning and any ambiguity challenges of sustainability and
risk management as knowledge management is a systematic approach in which information is turned into
actionable knowledge and made available in a usable form to the people who can apply it (Dalkir, 2005). With
greater knowledge regarding both risks from previous projects and future scenarios, the risk management process
becomes a dynamic and iterative activity that provides valuable information to decision makers and proactively
addressed risks that could impact the establishment and achievement of any project’s sustainability objectives.

A new approach for project sustainability and risk management could address the complexities and ambiguity
associated with both defining and measuring sustainability and risk. A move away from the traditional risk
management process towards a knowledge based project risk management framework is the proposed approach.
It differs from traditional project risk management which is based on a process and introduces the analysis of
previous project knowledge and experience regarding risks and the impacts risks have had on project outcomes
to develop a culture that continually reviews risks considering the sustainability objectives and the potential impact
of the project on future generations.

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The conceptual knowledge management framework in

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Figure 72 (Yang et al., 2015) has been adapted to reflect the interconnectivity of the stakeholder integration, and
project sustainability management with the rest of the diagram.

Figure 72 now recognises the need for a reiterative process as there needs to be a flow of information both
downwards and upwards. Both stakeholder integration and project sustainability management contribute to
sustainability knowledge (SK) on a project but sustainability knowledge from previous projects and project team
members needs to contribute to the development of the stakeholder integration process and the project
sustainability management process.

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Figure 72: A conceptual KM framework (Yang et al., 2015)

Figure 73 further develops the project sustainability management and process aspects of the KM framework. The
adaption reflects that the project sustainability management is missing an opportunity to be enriched if sustainability
knowledge from previous projects and team members is not used. Using pre-existing knowledge can improve
project outcomes as the decisions that project managers make will be supported by practical and factual
information. This is important as it provides the project managers with a greater level of confidence in their ability
to make the right decisions and justify these decisions based on existing knowledge, not instinct or pre-conceived
biases.

In addition previous project knowledge initiates conversations regarding innovation, risk management, and lessons
learnt. The project risk management process is greatly improved by the addition of previous project sustainability
knowledge. Risks are better defined, where the assessment of the risk is grounded in actuals instead of predictions
and the mitigation actions are informed by actions that have been both successful and unsuccessful in the past. In
addition it provides critical information for more accurately quantifying risks which contribute to the budget
contingency. This creates a risk management process that provides the project manager with greater confidence
that risks on the project are applicable, comprehensive, and manageable and that the contingency applied to the
project is realistic.

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Figure 73: Sustainability and risk management conceptual framework

5. CONCLUSION
The link between sustainability and risk management is important. The recognition that assessing risks based on
possible future scenarios and previous project knowledge means project managers are addressing sustainability,
whether or not the project sponsor has clearly defined sustainability objectives. This means a shift away from
project sponsor mandated sustainability objectives and towards a best practice embedded approach to establishing
and achieving sustainability objectives on projects. Capitalising on previous project sustainability knowledge and
using information as the new baseline for a similar project, forces continual sustainable improvement on projects.
In addition, enriching the risk management process with sustainability knowledge increases the transparency and
confidence regarding associated costs and improves strategic decision making, using evidence based on
considerations of past incidents and actual issues addressed. Providing a framework for project managers to
access and implement sustainability knowledge on a project will strengthen the delivery capability of project
managers and drive the successful achievement of sustainability objectives on projects.

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