These steps are especially important should your company be a part of the energy, vehicle, utilities, natural resources or any other environmentally sensitive industry. In fact, almost all projects now involve some risk assessment as we are all aware of the environmental impact our businesses have. We will delve into the importance of risk management for intended sustainable projects and what project managers can do to be involved.
Risk vs Issue: What’s the Difference?
Before you can put effective risk management strategies into place, it’s important to understand the difference between risk and issue. A risk is something which could positively or negatively affect a project, while an issue is something that is currently negatively affecting the project. Essentially, a risk may happen and could have a good or bad outcome, an issue is happening now and can only have a negative impact.
When you assess the scope of a project and create a consolidated project management plan, it’s important to consider the risks that could arise. Successful risk management allows you to identify both intrinsic and extrinsic factors that could affect outcomes and put actions in place, where necessary. Risk management is simply about minimising threats and maximising opportunities.
If an issue does occur, comprehensive risk management planning will mean that you may already have a strategy in place to deal with the issue, if it’s been previously identified as a threat. You can simply move the threat from the risk register to the issue log so that it is resolved swiftly and appropriately.
What Are Risk Factors for Environmentally Sensitive Projects?
Businesses are under increasing pressure to minimise their negative environmental impact and reduce their carbon footprints. As companies face new regulations on the control of Scope 1, 2 and 3 carbon emissions, B2B clients are eager to reduce their own environmental liabilities by doing business with other firms that have successful sustainability strategies in place. Similarly, environmental sustainability is becoming a top priority for consumers, which means that B2C businesses must also take steps to improve their environmental credentials if they want to retain or grow their market share.
Common impacts of project risks include increased costs, scope creep and operational changes, but there are additional risk factors to consider when you’re managing environmentally sensitive projects. A construction project could raise environmental risks, such as increased air and noise pollution, disruption of biodiversity and water pollution, for example. Similarly, if a vehicle manufacturer wants to release a new product, whole-life CO2 emissions and materials provenance will be sources of considerable environmental risk that will need to be fully assessed across the whole supply chain.
Putting Environmental Risks into a Business Context
No one should actively want to harm the environment but, in the past, many businesses have been guilty of prioritising other objectives, such as financial performance, above environmental sustainability. Now however, environmental sustainability is more closely linked to a company’s commercial success, where ethics and values are more prominent, which is why it’s important to put environmental risks into a business context.
When using a programme management framework to conduct risk and issue management, remember to consider the impact of risks and issues on numerous stakeholders. If a new vehicle design causes potentially significant environmental harm during its manufacture or supply, for example, it could attract financial sanctions that the business must account for and reputational harm arising from eco-conscious consumers.
As you begin to identify environmental risks and consider their business impact, it becomes clear that environmentally sensitive projects must be handled extremely carefully to avoid unnecessary negative risks and issues arising.