Perspectives · Portfolio Management

Achieving Organizational Sustainability Goals Through Strategic Alignment in Project Portfolio Management

We were working with a client recently and discussed the issues of prioritisation and alignment of projects to the organisation’s sustainability goals. Whilst they have published and publicly committed to a number of sustainability goals, there was no clear link between those goals and what was actually happening in the organisation. When I asked them how they ensure the projects they undertaken help deliver or align to the organisation’s sustainability strategy they gave me a blank look. Strategic alignment is a critical function of PPM that ensures that every project within the portfolio supports the overarching sustainability objectives of the organization. By integrating sustainability into project selection, organizations can drive significant improvements in environmental, social, and economic performance. In this weeks post I will explore how strategic alignment in PPM can help achieve organizational sustainability goals.

The Importance of Strategic Alignment

Strategic alignment in PPM refers to the process of ensuring that projects are consistent with the organization’s strategic goals and objectives. It involves linking project outcomes to business goals, thereby ensuring that all projects contribute to the long-term vision of the organization. In the context of sustainability, strategic alignment ensures that projects are designed and executed with sustainability in mind, addressing the key pillars of environmental protection, social equity, and economic prosperity. This concept is not new. Research over the last 20 years has highlighted the critical role of strategic alignment in achieving sustainability goals. Academics Müller, Martinsuo, and Blomquist (2008) discuss the role of strategic alignment in project portfolio management and highlight its importance in achieving organizational objectives. They argue that aligning projects with strategic goals ensures that resources are utilized effectively and that projects contribute to the overall success of the organization. Furthermore, Cooper, Edgett, and Kleinschmidt (2001) provide a framework for portfolio management that emphasizes the alignment of projects with business strategy. They suggest that strategic alignment is critical for maximizing the value of the project portfolio and ensuring that projects support the organization’s long-term goals.    

Integrating Sustainability into Strategic Alignment

It probably comes as no surprise, but traditional project management approaches must evolve to incorporate sustainability principles. At GPM we advocate for the use of sustainability frameworks, such as the GPM P5 Standard, to achieve strategic alignment and drive sustainability performance through an organisation not just in projects. So how do we ensure projects are aligned to the organisation’s sustainability strategy?

Defining Sustainability Goals

The first step in achieving strategic alignment is defining clear sustainability goals. According to the Project Management Institute (PMI), aligning projects with strategic goals involves ensuring that project outcomes contribute to these goals (PMI, 2017). Given that were are delivering projects it makes sense that we assess how each makes a contribution (or not) to the achievement of these strategic goals. We’ve been doing this for some time with financial goals and assessing projects for Return on Investment for example. If we are serious about achieving sustainability goals then t is essential that we make the shift and ensure that projects are assessed based on their potential to advance the organization’s sustainability objectives. One organization we worked with recently had specific goals that included achieving Net Zero Carbon Emissions by 2050 and to achieve zero waste by 2030. These goals provide a framework for evaluating and prioritizing projects. Unless projects are assessed to determine how they contribute to these goals then the approved projects might actually be making the problem worse!

Incorporating Sustainability into Project Selection Criteria

To ensure strategic alignment, sustainability criteria should be incorporated into the project selection process. This involves evaluating potential projects not only on their financial viability but also on their environmental and social impacts. For example, projects that reduce greenhouse gas emissions, conserve natural resources, or promote social inclusion should be prioritized. The GPM’s P5 Standard for Sustainability in Project Management provides a comprehensive framework for integrating sustainability into project selection. The P5 framework ensures that projects address social, environmental, and economic impacts comprehensively.

Aligning Projects with Organizational Strategy

Once sustainability goals and project selection criteria are established, we need to assess all existing projects to determine how  they contribute to the organizations sustainability strategy. This involves mapping each project to a specific goal, such as achieving Net Zero Waste by 2030 and ensure that project outcomes contribute to these goals. Regular reviews and updates of the project portfolio can help maintain this alignment. This iterative process is essential for adapting to changing circumstances and emerging sustainability challenges.

Performance Monitoring and Reporting

Effective performance monitoring and reporting are critical for maintaining strategic alignment. Organizations should develop and track achievement of the stated goals. Regular reporting on these metrics ensures transparency and accountability, demonstrating progress towards sustainability goals. If done properly, these outputs contribute directly to the organization’s sustainability or ESG reports. The Global Reporting Initiative (GRI) provides a robust framework for sustainability reporting. By adopting GRI standards, organizations can enhance their sustainability reporting and demonstrate their commitment to sustainable development (GRI, 2020).

The Wrap

Assessment of projects and determining how they contribute to or help achieve organizational sustainability goals is now a must. With an increase in focus on reporting and a requirement to disclose carbon emissions being legislated in many countries, we need to fully understand how projects impact or help us achieve our sustainability goals. By integrating sustainability into the project prioritisation and selection process of project portfolio management, organizations can ensure that their projects not only deliver economic value but also contribute positively to environmental and social outcomes. References Cooper, R. G., Edgett, S. J., & Kleinschmidt, E. J. (2001). Portfolio Management for New Products. Basic Books. Global Reporting Initiative. (2020). GRI Standards. Retrieved from GRI. Marcelino-Sádaba, S., González-Jaen, L. F., & Pérez-Ezcurdia, A. (2015). Using Project Management as a Way to Sustainability. From a Comprehensive Review to a Framework Definition. Journal of Cleaner Production, 99, 1-16. Müller, R., Martinsuo, M., & Blomquist, T. (2008). Project Portfolio Control and Portfolio Management Performance in Different Contexts. Project Management Journal, 39(3), 28-42. Project Management Institute. (2017). The Standard for Portfolio Management. PMI.