On the concept of sustainability – assessing the sustainability of large public infrastructure investment projects

Abstract

Assessing the sustainability of large public investment projects within the general framework of three-pillar thinking is a complex affair. Such ventures involve multiple actors – e.g. planners from various disciplines such as engineers, economists and social scientists, in addition to politicians, users and other people affected – each carrying with them particular agendas and priorities, and corresponding understandings of the concept of sustainability. In this paper, we propose to frame the concept of sustainability assessment within the context of investment projects, in order to enable communication between the multiple actors, to assess different impacts of an investment project against one another in a meaningful way and, ultimately, to enhance the commensurability of investment project alternatives. Our main idea is that there exist different levels according to which the assessment of sustainability ought to refer – operational, tactical and strategic – and that properly addressing these levels can permit the different actors to comprehend one another, and thereby allow for more clarity and positive action.

Keywords::

• sustainable business models
• sustainability
• life-cycle assessment

Keywords::

• framework
• strategic
• benefit
• long-term
• risk

Notes

^1. Email: [email protected].

^2. Email: [email protected].

^3. Email: [email protected].

^4. Here, we use the term ‘large public investment projects’ to describe projects that are subject to the Norwegian QA regime, initiated by the Norwegian Ministry of Finance. Today, public investment projects with cost estimates surpassing NOK 750 million are evaluated in this external, two-gate QA scheme. More information on the Norwegian QA scheme can be found at http://www.concept.ntnu.no/qa-scheme.

^5. The most quoted passage from this report, whose official author is the World Commission on Environment and Development, defining sustainable development as development ‘that meets the needs of the present without compromising the ability of future generations to meet their own needs’ (1987, 16), illustrates this differentiation. The definition encompasses very broad societal processes. It is difficult to translate these processes into single ventures, such as public investment projects.

^6. Two parts form the Latin verb sustinere, notably tenere, i.e. ‘to hold’, and sus, i.e. ‘up’. On the whole, we can see that the two conceptions thus form an idea of upholding something. Such a direct comprehension of the concept of sustainability proves problematic, since not only profitable/beneficial but also highly unprofitable and/or damaging processes can be maintained over very long time.

^7. A wide array of definitions exists. In fact, their multiplicity does not only illustrate how complex the concept of sustainability is to define, but also the need for a commonly accepted definition. Hasna (2010) enlisted 67 definitions from the plethora available (strangely omitting the Organisation for Economic Co-operation and Development (OECD) definition, which constitutes the framework of our work). Our preference for the definition of the OECD stems from the possibility to operationalise it into investment project sustainability assessment practice that we have not found in other definitions.

^8. It is on the basis of this ambiguity that the alternative definition of the Norwegian Ministry of Finance seems to have been forged, for which the sustainability of an investment project is defined as: ‘[t]he degree to which the investment contributes to the realisation of goals and purposes after the project is realised and through the expected life cycle. A consideration of net benefit flows over time’ (our translation; Norwegian Ministry of Finance 2008, 5). As it can be seen, the main difference between the two definitions is the replacement of the term ‘benefit’ with those of ‘goals’ and ‘purposes’. The term ‘goal’ is understood as the effects from the user's point of view (Samset 2010, 23). The term ‘purpose’ indicates the long-term consequences of the project (ibid., p. 24). This replacement has the advantage of highlighting that the benefits – according to which the sustainability of an investment project is to be assessed – have to be referred to different levels of analysis.

^9. The insight that assessment of sustainability ought to take into consideration the given context of the assessment is, in fact, not new. As Clift (2003, 241) commented, ‘[i]n formulating and estimating the values of [sustainability assessment] indicators, it is necessary to distinguish between application to “in house” activities and to complete supply chains’, or in other words, that having regard for sustainability means different things when used in different contexts. Clift did not, however, elaborate on the theme, nor did he pursue this insight into the analysis of the project in its context.

^10. For a discussion on the visual representations of sustainability, see Adams (2006).

^11. The term ‘triple bottom line’ refers to the quantified conceptualising of the balance between the three pillars, as introduced by John Elkington in 1994.

^12. Similar categorisations of activities and their objectives into hierarchy levels can also be found in other literature sources. OECD (2002) discussed the Logical Framework Approach with input, output, outcomes and impact. Within the context of corporate business, Mintzberg (1994, 61) elaborated strategies into a hierarchy, with the corporate strategy on top that is supported by business strategies, which again are supported by functional strategies.