SME Annual Meeting

Feb. 19 - 22, 2012, Seattle, WA

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, WA
D. Anderson, CH2M HILL, Inc., Portland, OR

INTRODUCTION

Design Approach for the SD Checklist Tool

CH2M HILL approached the design of the SD Checklist tool from
several angles. First, the tool should help project teams understand the
full range of SD issues that can be associated with various projects;
thus, the tool should be comprehensive in covering SD topics. Second,
the tool should be easy to use, since the people using the tool
(particularly those outside engineering design and construction
management firms) may have limited knowledge about sustainability.
Third, the checklist should help project teams identify priorities, so that
financial and technical resources can be focused on issues that matter.
Fourth, the SD Checklist should help to stimulate new thinking that has
the potential to improve project outcomes. These four design criteria
provided the guidance for the final design of the SD Checklist tool.

Since late 2010, CH2M HILL has been working with a confidential
client who holds a long-term commitment to sustainable development
(SD). The commitment is aligned with all three elements of the triple
bottom line: people and society, ecosystems and environment, and
financial and economic systems. These commitments are carried
forward by the firms executives, managers, and operational sites, and
are evident in materials posted on the companys 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 toward
the GRI targets, and a delineation of risks and opportunities outlined in
the firms Form 10-K and Annual Report.

Development Process for SD Checklist Tool

To develop the SD Checklist tool, CH2M HILL began by reviewing
our clients existing SD-related values, policies, goals, targets, and
commitments. From these documents, the CH2M HILL team
developed a comprehensive list of SD issues and topics that are most
relevant to extraction industry projects. The CH2M HILL team also
identified SD-related topics and targets used by other sectors to create
a robust list for consideration.

In keeping with its commitments to SD targets, our client wished

to consider SD issues in its decision processes for facility expansion or
new projects. The company engaged CH2M HILL to meet this goal,
based on working relationships established through existing contracts
and CH2M HILLs leading capabilities in sustainable solutions.
SD DECISION TOOLS
For the past year, CH2M HILL has been developing two tools that
will help our client effectively integrate social, environmental, and
economic considerations into decision-making processes that take
place during the planning, pre-feasibility, and feasibility stages of
facility expansion or new projects.

The CH2M HILL team then gained agreement from our client on
the design approach for the SD Checklist tool by presenting a variety
of existing SD decision tools and discussing the pros and cons of each.
In the next step, we developed a draft SD Checklist, tested it by
applying it to a current expansion project, and requested an in-depth
review by our client. Two subsequent iterations of review and
refinement led to the current version of the SD Checklist, which is
accompanied by detailed instructions for users.

The two primary goals for tool development are (1) to introduce
SD principles and concepts into the early stages of project planning to
help shape the scope and approach of various projects, and (2) to
provide project teams with the basis for evaluating project options in
pre-feasibility stage trade-off studies, in a way that effectively
considers SD issues alongside conventional evaluation criteria (such
as cost, schedule impacts, availability, etc.).

Pilot-testing of the SD Checklist tool is now underway as part of

several facility expansion projects. Feedback from these pilot tests will
be used to further improve the SD Checklist tool. In keeping with the
concept of continuous improvement, the tool will be refined over time,
and lessons-learned from various projects will be shared between
project teams.

An SD Checklist was developed to address the first goal, and a

set of key performance indicators (KPIs) is being developed to address
the second goal. This paper outlines the intended use, design
approach, development process, and a description for each of these
tools.

Description of SD Checklist Tool

The SD Checklist tool is constructed as a spreadsheet that covers
ten SD categories. These include water, energy, climate change,
environment, biodiversity, community, health and safety, human rights
and security, supply chain, and economic impact. Each SD category is
linked to a set of SD goals and a series of thought-provoking questions
for project teams to consider. This structure enables teams to identify
elements of the expansion project that will affect SD goals, thereby
either posing a risk to SD or creating an opportunity to enhance SD. A
separate risk/opportunity scoring system, aligned with the clients
existing risk assessment methodology, allows Checklist users to score
and thereby identify priority risks and opportunities. Only these
priorities are carried forward into subsequent stages of the expansion
project.

SD CHECKLIST TOOL
Intended Use
The SD Checklist tool is intended for use by our clients internal
planning teams during early project scoping and pre-feasibility stages.
The purpose of the tool is to help project teams raise SD
considerations within the context of their normal planning process,
identify SD-related risks and opportunities, and develop strategies for
mitigating risks or developing value from opportunities. The tool is most
effective when it is used in a workshop or group setting, where an
exchange of ideas can occur. The output from application of the tool is
then fed into the pre-feasibility and feasibility stages of the facility
expansion project. The use of the checklist is not intended to be a onetime event; rather, it is to be revisited on an on-going basis.

The last part of the SD Checklist tool engages users in defining

strategies for either mitigating priority risks or developing priority
opportunities. The resulting draft strategies are also carried forward
into the next stages of project planning.

Copyright 2012 by SME

SME Annual Meeting

Feb. 19 - 22, 2012, Seattle, WA
KPIS FOR TRADE-OFF STUDY EVALUATIONS

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

Intended Use
The KPIs are intended for use by our clients internal planning
teams and consultants during the pre-feasibility stage of expansion
project planning. This is because critical trade-off studies and
alternatives evaluations occur at this stage. The purpose of the KPIs is
to introduce SD as a decision criterion into these studies and
evaluations, which typically focus on the locations and facility layouts,
process design and configurations, water and energy resource
efficiency, technology and equipment alternatives, as well as logistics
and labor procurement.

REFERENCES
Global Reporting Initiative (2006). G3 Guidelines. Posted at website
http://www.globalreporting.org/ReportingFramework/G3Guidelines/.

To date, the KPIs have been developed with respect to a subset

of topics taken from the SD Checklist tool.
Design Approach
In the same manner as for the SD Checklist tool, CH2M HILL
collaborated with our client to define a shortlist of design criteria for the
KPIs. They include the following:

Reflect priority SD issues with respect to the specific sector in

which 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 clients market sector in terms of the
factors that our client can control directly.
Help measure trends in SD performance of site operations over
time, with respect to the SD priority areas.
Help drive behaviors and decisions that result in improved SD
performance.
Be understandable to staff and consultants who may not be
experts in various sustainability fields.
Use information or data that is typically and readily available.

Development Process
The development process for the KPIs was also iterative, and it is
still in progress. CH2M HILL used the SD Checklist listing of SD
issues, along with the companys list of key SD challenges and GRI
report 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 SD
issues. These steps provided the basis for formulating KPIs that are
relevant and meet the design criteria.
At the time of this writing, CH2M HILL is revising the formulation
of KPIs after an initial review and discussion with our client.
Description of KPIs Tool
The KPI tool will consist of a short list of KPIs that project
planners and consultants can use to evaluate alternatives from an SD
perspective and insert SD considerations into trade-off studies. In
essence, the KPIs function as decision criteria. Each KPI will consist of
metrics (quantitative or qualitative) and will be accompanied by
instructions 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 over
time as our clients teams use them and provide suggestions for
improvement.
CONCLUSIONS
CH2M HILL is actively working with a confidential client to
develop decision tools that will help this clients project teams
effectively and creatively consider SD issues in project planning and
across the life-cycle of projects and sites. The SD Checklist tool assists
in the early stages of project planning for facility expansion projects,
while the KPIs tool assists with alternatives evaluations and trade-off
studies in pre-feasibility planning activities. Both tools are designed to
integrate with existing decision processes and to be used by staff and
consultants who may know little about sustainable development. Pilot-

Copyright 2012 by SME