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  SME Annual MeetingFeb. 19 - 22, 2012, Seattle, WA

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Preprint 12-012

DECISION TOOLS FOR INTEGRATING SUSTAINABILITY INTO PLANNING AND FEASIBILITY PHASES OF PROJECTS FOR

EXTRACTIVE SECTOR ENTERPRISES

A. Ramage, CH2M HILL, Inc., Seattle, WAD. Anderson, CH2M HILL, Inc., Portland, OR

INTRODUCTION

Since late 2010, CH2M HILL has been working with a confidentialclient who holds a long-term commitment to sustainable development(SD). The commitment is aligned with all three elements of the triplebottom line: people and society, ecosystems and environment, andfinancial and economic systems. These commitments are carriedforward by the firm’s executives, managers, and operational sites, andare evident in materials posted on the company’s public website.These materials include a formal sustainability report prepared in

accordance with the Global Reporting Initiative (GRI) guidelines (GRI,2006), a report that outlines key SD challenges and progress towardthe GRI targets, and a delineation of risks and opportunities outlined inthe firm’s Form 10-K and Annual Report.

In keeping with its commitments to SD targets, our client wishedto consider SD issues in its decision processes for facility expansion ornew projects. The company engaged CH2M HILL to meet this goal,based on working relationships established through existing contractsand CH2M HILL’s leading capabilities in sustainable solutions.

SD DECISION TOOLS

For the past year, CH2M HILL has been developing two tools thatwill help our client effectively integrate social, environmental, andeconomic considerations into decision-making processes that takeplace during the planning, pre-feasibility, and feasibility stages of

facility expansion or new projects.The two primary goals for tool development are (1) to introduce

SD principles and concepts into the early stages of project planning tohelp shape the scope and approach of various projects, and (2) toprovide project teams with the basis for evaluating project options inpre-feasibility stage trade-off studies, in a way that effectivelyconsiders SD issues alongside conventional evaluation criteria (suchas cost, schedule impacts, availability, etc.).

An SD Checklist was developed to address the first goal, and aset of key performance indicators (KPIs) is being developed to addressthe second goal. This paper outlines the intended use, designapproach, development process, and a description for each of thesetools.

SD CHECKLIST TOOL

Intended UseThe SD Checklist tool is intended for use by our client’s internalplanning teams during early project scoping and pre-feasibility stages.The purpose of the tool is to help project teams raise SDconsiderations within the context of their normal planning process,identify SD-related risks and opportunities, and develop strategies formitigating risks or developing value from opportunities. The tool is mosteffective when it is used in a workshop or group setting, where anexchange of ideas can occur. The output from application of the tool isthen fed into the pre-feasibility and feasibility stages of the facilityexpansion project. The use of the checklist is not intended to be a one-time event; rather, it is to be revisited on an on-going basis.

Design Approach for the SD Checklist ToolCH2M HILL approached the design of the SD Checklist tool from

several angles. First, the tool should help project teams understand thefull range of SD issues that can be associated with various projectsthus, the tool should be comprehensive in covering SD topics. Secondthe tool should be easy to use, since the people using the too(particularly those outside engineering design and constructionmanagement firms) may have limited knowledge about sustainabilityThird, the checklist should help project teams identify priorities, so tha

financial and technical resources can be focused on issues that matterFourth, the SD Checklist should help to stimulate new thinking that hasthe potential to improve project outcomes. These four design criteriaprovided the guidance for the final design of the SD Checklist tool.

Development Process for SD Checklist ToolTo develop the SD Checklist tool, CH2M HILL began by reviewing

our client’s existing SD-related values, policies, goals, targets, andcommitments. From these documents, the CH2M HILL teamdeveloped a comprehensive list of SD issues and topics that are mosrelevant to extraction industry projects. The CH2M HILL team alsoidentified SD-related topics and targets used by other sectors to createa robust list for consideration.

The CH2M HILL team then gained agreement from our client onthe design approach for the SD Checklist tool by presenting a varietyof existing SD decision tools and discussing the pros and cons of eachIn the next step, we developed a draft SD Checklist, tested it byapplying it to a current expansion project, and requested an in-depthreview by our client. Two subsequent iterations of review andrefinement led to the current version of the SD Checklist, which isaccompanied by detailed instructions for users.

Pilot-testing of the SD Checklist tool is now underway as part oseveral facility expansion projects. Feedback from these pilot tests wilbe used to further improve the SD Checklist tool. In keeping with theconcept of continuous improvement, the tool will be refined over timeand lessons-learned from various projects will be shared betweenproject teams.

Description of SD Checklist ToolThe SD Checklist tool is constructed as a spreadsheet that covers

ten SD categories. These include water, energy, climate changeenvironment, biodiversity, community, health and safety, human rightsand security, supply chain, and economic impact. Each SD category is

linked to a set of SD goals and a series of thought-provoking questionsfor project teams to consider. This structure enables teams to identifyelements of the expansion project that will affect SD goals, therebyeither posing a risk to SD or creating an opportunity to enhance SD. Aseparate risk/opportunity scoring system, aligned with the client’sexisting risk assessment methodology, allows Checklist users to scoreand thereby identify priority risks and opportunities. Only thesepriorities are carried forward into subsequent stages of the expansionproject.

The last part of the SD Checklist tool engages users in definingstrategies for either mitigating priority risks or developing priorityopportunities. The resulting draft strategies are also carried forwardinto the next stages of project planning.

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  SME Annual MeetingFeb. 19 - 22, 2012, Seattle, WA

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KPIS FOR TRADE-OFF STUDY EVALUATIONS

Intended UseThe KPIs are intended for use by our client’s internal planning

teams and consultants during the pre-feasibility stage of expansionproject planning. This is because critical trade-off studies andalternatives evaluations occur at this stage. The purpose of the KPIs isto introduce SD as a decision criterion into these studies andevaluations, which typically focus on the locations and facility layouts,process design and configurations, water and energy resourceefficiency, technology and equipment alternatives, as well as logisticsand labor procurement.

To date, the KPIs have been developed with respect to a subsetof topics taken from the SD Checklist tool.

Design ApproachIn the same manner as for the SD Checklist tool, CH2M HILL

collaborated with our client to define a shortlist of design criteria for theKPIs. They include the following:

•  Reflect priority SD issues with respect to the specific sector inwhich our client operates.

•  Be generally applicable to all phases of the project life cycle,

including project planning, design, engineering, construction,operations, and closure.

• 

Reflect the realities of our client’s market sector in terms of thefactors that our client can control directly.

•  Help measure trends in SD performance of site operations overtime, with respect to the SD priority areas.

•  Help drive behaviors and decisions that result in improved SDperformance.

•  Be understandable to staff and consultants who may not beexperts in various sustainability fields.

•  Use information or data that is typically and readily available.

Development ProcessThe development process for the KPIs was also iterative, and it is

still in progress. CH2M HILL used the SD Checklist listing of SDissues, along with the company’s list of key SD challenges and GRIreport to identify subject areas for potential KPIs.

CH2M HILL then mapped SD issues across each phase of the

project life cycle, from project planning to closure. Within each phase,we identified the key decisions that must be made, relative to the SDissues. These steps provided the basis for formulating KPIs that arerelevant and meet the design criteria.

At the time of this writing, CH2M HILL is revising the formulationof KPIs after an initial review and discussion with our client.

Description of KPIs ToolThe KPI tool will consist of a short list of KPIs that project

planners and consultants can use to evaluate alternatives from an SDperspective and insert SD considerations into trade-off studies. Inessence, the KPIs function as decision criteria. Each KPI will consist ofmetrics (quantitative or qualitative) and will be accompanied byinstructions for calculating and using them in decision processes.

The KPIs are being field-tested in 2011 and 2012. In the same

manner as for the SD Checklist tool, the KPIs will be improved overtime as our client’s teams use them and provide suggestions forimprovement.

CONCLUSIONS

CH2M HILL is actively working with a confidential client todevelop decision tools that will help this client’s project teamseffectively and creatively consider SD issues in project planning andacross the life-cycle of projects and sites. The SD Checklist tool assistsin the early stages of project planning for facility expansion projects,while the KPIs tool assists with alternatives evaluations and trade-offstudies in pre-feasibility planning activities. Both tools are designed tointegrate with existing decision processes and to be used by staff andconsultants who may know little about sustainable development. Pilot-

testing activities planned for 2012 will further develop these tools andtest their efficacy.

REFERENCES

Global Reporting Initiative (2006). “G3 Guidelines.” Posted at websitehttp://www.globalreporting.org/ReportingFramework/G3Guidelines/ .

http://www.globalreporting.org/ReportingFramework/G3Guidelines/http://www.globalreporting.org/ReportingFramework/G3Guidelines/