People, Planet, Profits & Projects

Even before The Graduate, and Mr. McGuire’s one word advice to Benjamin, “plastics”, plastics were already becoming a material of choice for so many products.  Like  other “miracle” products, materials and solutions,at times there is little consideration for the long term effects.  In the excitement of the miracle, lost is the question that we, in sustainability, are always asking; “to what degree are you considering the sustainability factors that affects these products (projects) during the entire project lifecycle and beyond” (its greenality).   The problem is that the urgency to evaluate those long term effects (beyond the project life cycle when the product is in use) is overshadowed by the urgency to execute on the idea.   The connection to projects is that projects are where those ideas become reality. 

The urgency became a reality in a recent report from one of our favorite sustainability websites, Green Biz,  www.greenbiz.com, “Plastics cost the environment $75 billion each year” by Danny Bradbury.  The report is about the cost to the environment from consumer goods companies through their use of plastics.  The article is based a report "Valuing plastic". Vauling Plastic is a report from the Plastic Disclosure Project, a joint U.N. Environment Programme with natural capital analysts Trucost.  It is an evaluation of the environmental and social impact of plastics used by businesses.  The interesting piece, to me, is that It also assesses the financial cost to companies were they to be financially responsible for their plastics usage.  In other words, if these companies truly considered the greenality of their products, projects and processes, perhaps an additional $75 billion could be added to the bottom line (profits). 

In effect, the reports shows, the food industry accounted for 23% of the financial cost with the soft drink industry a distant second with 12% of the costs.  Further, environmental considerations include: toxicity of the plastics, fouling land usage, causing the death of some animals (6-pack holders straggling water fowl for instance), etc.  According to Andrew Russell, the director of the Plastic Disclosure Project, "Avoiding plastic entering the environment at all will avoid a lot of them (the issues). Making sure there is a very high percentage of recycled content in the product or packaging, and making sure the plastic is recycled at the end of its life (my emphasis), all have enormous favorable impact." 

So, what can we do, as project managers, to help to alleviate or at least mitigate this problem and, by the way, add to your organization’s bottom line?  We certainly can make recommendations, not only as PMs, but as members of the organization.  One of the major issues we deal with is transparency.  Real transparency comes from communications, and we are communicators.  Making people aware of plastic content of products, recyclability, use of recyclable materials, facilitates transparency.   According to the report, only about ½ of the companies assessed, report any quantitative data on plastics usage.  That is not transparency.

One of the obvious choices is that we should recommend that the plastics we use are recyclable, reusable and that the materials we use in the production have a significant content from recycled material.    Plastics can be costly in natural capital, “the limited stock of Earth’s natural resources that humans depend on for our prosperity, security and well-being — including things such as clean air and water.”  (http://www.greenbiz.com/blog/2013/09/09/who-are-leaders-natural-capital).  To preserve both the natural capital and the organization’s bottom line, one word, plastics.

With the USA's Independence Day celebrations upon us, it seemed appropriate to talk about independence and interdependence.  In both cases, we refer you to the very PMBOK(R) Guide that defines the framework, knowledge areas, and processes of project management.

Let's get ::interdependence:: out of the way first.  As we know, projects are run by organizations to accomplish the mission, vision, and values of the organization.  We only ininitiate a project if it is aligned with the business objectives of the entity that sponsors it.  So there is an inherent interdependency between projects and the programs and portfolios under which they are executed.

This concept can be carried forward to our message* of sustainability by virtue of the need to line up the projects with the CSR (Corporate Social Responsibility) messaging of the parent organizations.  We'll repeat our ongoing challenge to project managers: check the "About Us" section of your company's external web page and se what your leaders are saying to the world about their commitment to the environment, to employees, to the community, to the shareholders.  Is your project connected to (interdependence!) these statements?

We have seen significant evidence of projects that may line up with one element (usually, of course, economic in nature) but are way, way, WAY off in terms of the other 2 pieces of the bottom line (social and ecological).

So - in the interest of brevity - just know that the PMBOK(R) Guide speaks to this significantly. If you don't believe us, have a look at Figure 1-1 of the Guide on page 5, and this sentence from page 4:

"Although the projects or programs within the portfolio may not necessarily be interdependent or directly related, they are linked to the organization's strategic plan by means of the organization's portfoliio".

So now on to independence!

In this context we want to talk about independence from bias and reliance on facts (as in, "we hold these truths to be self-evident"). 

As the hurricaine season begins to unfold, we were looking at Hurrricaine Arthur on wunderground.com, a website devoted to independent weather reporting.  There we found a great page which provides facts on climate change based strictly on independent science.  Unfortunately, due to the politicizing of this science, even an independent weather page was compelled to put this statement on their page:

"Based on the evidence, more than 97% of climate scientists have concluded that human-caused climate change is happening. Climate change is already causing significant impacts to people and ecosystems, and these impacts will grow much more severe in the coming years. We can choose to take economically sensible steps to lessen the damage of climate change, and the cost of inaction is much higher than the cost of action."

Click here for the full Wunderground page on climate change - it's a great resource for facts.

The other piece related to independent climate change facts was found oun this site:

Click here for a report on climate change funded by the Koch brothers which should please even those who are concerned about any fraud in climate change.

So to wrap up:

As project managers, we are - by definition - interdependent on our organization's mission, vision, and values.  We can use this interdependency to our advantage, as an opportunity as a source of authority and power when we want to assure that our projects are properly linked to the goals of the organization.

Also - as project managers, we should seek facts and base our decisions on independent, validated sources of information.  We should remain independent when it comes to negotiating differences amongst our project team members.  Independence is key for us, even as mentioned in the PMBOK(R) Guide in terms of procurement and arbitration.

So declare your own PM independence gather and deal with facts only as facts, whether it's dealing with CSR objectives, climate change, or a simple argument between team members that you are refereeing.

To our American readers, happy July 4th!  And since that is a date on EVERYONE's calendar, we wish EVERYONE a happy July 4th, too!

*The best way to see our message is here at Projects@Work in this blog, at http://earthpm.com, and even better by reading our book, Green Project Management.

A variety of electronic sensing devices are being used in projects to reduce energy costs and help the bottom-line.  The interesting thing is that they can be integrated into present manufacturing with little or no cost difference.  When sustainability is planned in, it can be a lot less costly than retrofit. 

A prime example of this is in the car industry.  We all know that it will be a long time until we are weaned off of fossil fuels to power our automobiles.  Therefore, it is critical to be able to stretch the limited supply we have.  Let’s say you are a project manager working for a major automobile manufacturer and your project is the implementation of a new transmission (or engine, or even a steering system).  As a stakeholder in the company (they do pay your salary), because of your position within the organization, and your interest in sustainability, you may want to ask the question as to whether all sustainability options are being considered for this project. 

One company, ZMDI, is providing solutions to help auto manufacturers squeeze out every ounce of efficiency to increase fuel economy and reduce greenhouse gases (GHGs).    Using their “smart sensors” ZMDI is providing “Advances in transmission, engine and steering systems deliver greater power density and fuel efficiency so that today’s lighter and smaller power trains can provide significantly more output power and fuel economy than traditional designs.”  It also provides integrated circuitry in: battery monitoring “Monitoring the status of the car battery with our smart battery sensor solutions enables automatic start-stop features in cars, which can reduce fuel consumption up to 8%”, ethanol sensing:  “ZMDI’s IC solution enables optimization of fuel injection based on the real ethanol value and therefore helps reduce emissions”, and electronic steering,  "ZMDI’s IC solution enables using magneto-resistive sensors, which can enable an electronically controlled motor in the steering mechanism instead of using an hydraulic servo steering mechanism.”

The above graph and statement below were from http://www.zmdi.com/why-pink-new-greenand the 2013 data is based on ZMDI’s forecast.

The graph above shows the fuel savings and greenhouse gas (CO2) reduction achieved through ZMDI products in the automotive segment per year. Because the number of new energy-efficiency products introduced each year has increased, the savings in fuel could be significantly raised each year.

The fuel savings achieved in 2012, approximately 4500 M liters of fuel, corresponds to the loads of approximately 20 supertankers.

The accumulated annual savings since 2004 is approximately 18,000 M liters of fuel, which corresponds to the loads of approximately 80 supertankers.

The above graph shows significant savings in fuel savings and the more these types of integrated circuits, and e-sensing devices are utilized, the more the savings will be both in fuel costs and in GHG emissions. 

One of the more e-sensing technologies and a popular choice for renovation and new building projects is motion sensors.  The major advantage of motion sensing technology is that it eliminates the human factor, for the most part.  Lights are turned on and off and heat and cooling can regulated depending on the movement within an area, regulating the need for energy.  How many times do we walk out of a room and forget to turn out the light.  E-sensing technology can be used to keep a room at a constant temperature depending on the heat load generated without human intervention turning the thermostat up or down.  Of course humans will have to program the devices.  For motion sensing devices, that might include setting the arc around the sensor for activation, for instance.   But once set, it is repeatable.  Sustainability also includes the “people” element (planet, profits, and people).  In an effort to reduce the “germ” factor, sensing technology is being used to open and close bathroom doors so that people don’t have to touch the door handle.  Similar motion sensing technology is used for handicap access and for advancing paper hand towels. 

The more information we can possess the more influence we will have.  As sustainable project managers, our quivers contain a lot of arrows.  One of those arrows is the consideration of e-sensing/motion sensing technology on our projects.

Some of you may be familiar with the phrase "All Your Base Are Belong To Us", which has become somewhat of an internet meme with its own Wikipedia entry and acronym: AYBABTU.  It's a result of a poor translation from Japanese in a popular game called ZeroWing.

The phrase became so popular it shows up (in one form or another) on church signs...

and T-shirts...

That's when you know you've made it as an expression!

But we bring this up not because of t-shirts or churches or even video games, but rather because of a short but intensely interesting and powerful post by Elon Musk, the CEO of Tesla Motors, who used this internet meme as a basis for the title of the post - to be cute and yet memorable with a very important message for innovators.  Musk said, in short:

Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.

This is long-term thinking in a company that was built on long-term thinking.  We simply invite you to read the post and let us know how you feel about what, in effect, is open-source development of electric vehicles.

How would this work in your industry?

Does this have implications for projects and project managers?  We think so.  A penny for your thoughts?  Maybe... a whole base for your thoughts?

We all know that there are external factors that affect our projects.  Regulations are one of those factors that have to be considered by the project manager.  Depending on what industry you are in, has a lot to do with what factors we need to consider.   Because of their nature, some industries are more susceptible to risks from regulations than others.

The U.S. energy industry (I am concentrating on the U.S. by it is more global than that) is one of those industries that seem to be at the whim of congress.  Perhaps whim is too severe of a word to use, but it certainly seems appropriate when one considers that energy production and usage is a political hot potato.  Tightly control it, loosen the controls, supplement and reward alternate energy use, expire alternate use incentives, all of these approaches make it difficult to access project risk when energy is a component. 

The most recent event to affect project risk is the new U.S. Environmental Protection Agency (EPA) limits on green-house gas production and the different ways to mitigate the effect.  The elephant in the room, for energy production, here is coal.  According to the U.S. Energy Information Administration, coal is used to generate 39% of our electrical needs.  Natural gas is second with 27%, followed by nuclear (19%), renewable, including hydro-electric (13%) and petroleum (1%).    The EPA is proposing a cap on carbon emissions; reducing 2005 levels by an average of 25% by 2020 and 30% by 2030. It also gives credits to those states and utilities already working to reduce carbon emissions. 

As with most of government regulations, the green-house reduction proposal is so complicated that it will take some time for utility companies to sort is all out.  Talk about increasing risk.  If stakeholder expectations (U.S. EPA in this instance) are not well understood, then what kind of risk management plan can be put into place?  Let’s look at two possible mitigation strategies for this issue.

Cap and Trade Policies

Here is the best explanation I could find and it comes from the EPA.

Cap and trade is a market-based policy tool for protecting human health and the environment by controlling large amounts of emissions from a group of sources. A cap and trade program first sets an aggressive cap, or maximum limit, on emissions. Sources covered by the program then receive authorizations to emit in the form of emissions allowances, with the total amount of allowances limited by the cap. Each source can design its own compliance strategy to meet the overall reduction requirement, including the sale or purchase of allowances, installation of pollution controls, and implementation of efficiency measures, among other options. Individual control requirements are not specified under a cap and trade program, but each emission source must surrender allowances equal to its actual emissions in order to comply. Sources must also completely and accurately measure and report all emissions in a timely manner to guarantee that the overall cap is achieved.

A well-designed cap and trade program delivers:

• Greater environmental protection at lower cost
• Broad regional reductions, facilitating state efforts to address local impacts
• Early reductions, a result of allowance banking and market incentives
• Environmental integrity and transparent operations and results
• Fewer administrative costs to government and industry
• Efficiency and innovation incentives
• Incentives for doing better and consequences for doing worse
• Accounting for all emissions
• Partnership with existing requirements to ensure protection of the local population and environment

To summarize the intent, cap and trade is not meant to allow a particular company to continue to emit significant levels of GHGs in perpetuity.   It is temporary measure to allow companies to minimize the effects of their emissions by “averaging them out” while working to permanently to improve the quality of their emissions.  Further information can be found at http://www.epa.gov/captrade/basic-info.html.

Carbon Taxes

For a comprehensive explanation of carbon taxes, I looked “down under” to Australia’s policy. From (http://www.carbontax.net.au/what-is-the-carbon-tax/), “At the centre of the government’s policy on climate change is pricing carbon. Many commentators and politicians have referred to this as a “carbon tax”. The idea is that polluters will pay per tonne of carbon they release into the atmosphere. This cost will initially be set at $23, and increase gradually until 2015, when we will shift to a trading scheme that will let the market set the cost. This is widely thought of as the most effective and least costly mechanism to reduce carbon output and reduce the level of climate change that is occurring. 

Right now, when you purchase a product that relies on carbon-intensive materials or manufacturing processes, the price you pay does not represent the cost incurred by the environment. The iron ore used to create the product could be sourced from the highest polluting mine in the world, the electricity used to power the manufacturing plant could be provided by the dirtiest coal mine in the world, and the trucks used to transport the product to its final destination in a supermarket could run on the dirtiest fuels in the world, and it would make no difference to the price. With a price on carbon, this equation would change. The amount of carbon pollution involved in producing a product would start to be factored into its final price. Products produced through dirty processes will become more expensive, thereby making it possible for other products produced through cleaner processes to compete on price.

Yes, that’s right. The price of certain goods that are reliant on carbon pollution for their production will go up. However, the majority of Australians will be compensated for this cost, and this cost will be relatively small for most items.

How will this drive a move towards a cleaner future you might wonder.  Well, it’s not hard to see that if pollution-intensive processes make goods more expensive, companies will look to reduce their pollution footprint in order to lower their costs. That’s what businesses do – improve efficiency year on year. It’s one of the key drivers of growth. For this reason, it is actually not necessary for the consuming public to change their practices, although that would help drive you own costs down.”

Project risk needs to consider sustainability to cover all their bases.  One of our founding and guiding principles says it best.  “Project Managers must first understand (all) the green (sustainability) aspects of their projects, knowing that this will better equip them to identify, manage, and respond to project risks.”