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

Figures & data

Figure 1 Three sequential planning perspectives in a project based on cause–effect relationships. Step 1: assets are provided to enable project operations to produce contract deliverables. Step 2: the project's deliverables contribute to the fulfilment of the project's first-order (tactical) effects by satisfying the prioritised requirements based on selected prioritised needs of selected target groups. Step 3: fulfilment of the project's first-order (tactical) objectives contributes to the fulfilment of the project's second-order (strategic) effects based on policy response to the priorities of the larger society.

Table 1 Short descriptions of some selected methods that are commonly used to assess the sustainability of projects.

Analytic tool	Short description of some analytic tools commonly used for a separate assessment of one of the three pillars of sustainability	Authors' comments
Environmental Impact Assessment (EIA)	EIA is a relatively standardised framework for environmental analysis of reforms and initiatives, used for more than 40 years and obligatory for project evaluation within the European Union. A thorough guidance exists, and the EIA has even its own research journals contributing to further methodological advance. The ambition of the approach is to assure that environmental impacts of projects are taken care of	Limited to the impacts of one pillar only: environment. It may address the effects on operational, tactical and strategic levels
Ecological footprint	Ecological footprint is the name of an approach that elaborates an estimate of the level of productive farmland and water that is needed in order to produce the resources we consume and to absorb the emissions that result from consumption. This approach is well suited for comparing projects across sectors; it does, however, solely measure limited aspects of the environmental impact	Limited to the impacts of one pillar only: environment. It may be applied within the context of operational (design), tactical and strategic levels
Life Cycle Assessment (LCA)	LCA is a methodological tool used to measure the overall environmental impact of projects, based on a common unit of measurement that is not monetary. Emphasis is laid on capturing all impacts throughout the lifespan of the project, ‘from cradle to grave’, including impacts stemming from the procurement of raw materials necessary, from the production and distribution of manufactured goods, from the use phase and handling of the resulting waste. In this respect, it resembles the EIA, but is more standardised. Norris (2001) described the differences between the LCA and the LCC	Limited to the impacts of one pillar only: environment. It is usually applied to guide decisions within the context of the operational level only: in the project's design process
Life-Cycle Cost (LCC)	LCC is a methodological approach to assess all costs over the whole lifespan of an investment project. This approach is used for consequence analysis of different design alternatives, either for limited components or for the whole project. Such analysis is becoming increasingly widespread, for instance in the construction industry, and proves especially important in cases involving the cost-efficiency relationship between the investment and the operations (Bjørberg, Larsen, and Øiseth 2007). The LCC can also be considered as a part of a wider economic analysis	Limited to the impacts of two pillars only: economy and environment. It is usually applied to guide decisions within the context of the operational level only: in the project's design process
Financial analysis	Financial analysis is a methodological approach assessing the possibility for financing the project (investment cost and operations), with a corresponding financing strategy and plan for how the annual costs are to be met. Such an analysis can be divided into several components, in that a project can be partly financed directly by the users (e.g. toll roads), while the rest is financed by public funds. The level of user contribution needs to be realistic, especially with attention to possible altered behaviour as a response to the levying of a toll. Equally, public funding is not entirely predictable, being based on budgets that are normally adopted on a yearly basis. Public–private partnership and other forms of organisation can alleviate the field	Limited to the impacts of (almost entirely) one pillar only: economy. It is usually applied to guide decisions made within the context of strategic and tactical levels only
Cost–Benefit Analysis (CBA)	CBA is a systematic process for calculating and comparing benefits and costs of a project, to examine whether the benefits outweigh the costs, and thereby to determine whether it should be implemented. All benefits and costs are expressed in monetary terms (economic, environmental and social impacts) and we can therefore address the ‘net benefit’ flows. Benefits are estimated according to a willingness-to-pay principle. All benefits and costs are adjusted for the time value of money and expressed in present values. See any textbook on CBA, e.g. Boardman et al. (2010)	Impacts of all pillars are in principle included and weighted against each other. It is normally applied within the context of the tactical level
Scenario tools	Scenario tools are conceptual tools enabling the understanding of possible development structures in complex systems for the assessment of economic impacts and future needs relating to an investment project. Different approaches exist, most of them being based on workshops and cross-sectorial participation. Computer simulation tools and models equally exist that serve to simulate trends. The results form an important input to reduce risk and uncertainty. Scenario analysis is often used as a tool for strategic planning, not only in projects. See, for example, Fahey and Randall (1998)	Often limited to the impacts of one pillar only, depending on application. It can be applied to guide decisions made within the context of strategic and tactical levels only
Technology assessment	Technology assessment is not a term that denotes an analytic tool, but rather a tradition of analysis being introduced by the establishment of the Office of Technology Assessment in the USA in the 1970s. The aim of the procedures is to introduce a cross-sectorial and long-term analysis concerning the societal implications of introducing a new technology. Technologies under development form the main centre of interest (Banta 2009)	Technology assessments are usually not applied to guide project decisions, but can be used to guide policy formulation
Needs analyses	Needs analyses are pertinent to the assessment of public investment projects. They can be categorised according to their purpose, such as normative, demand-oriented (economic analysis) or interest-group analyses. Normative needs analyses are based on political consent and expert assessment of reasonable levels of assistance. Demand-orientated analyses investigate the willingness to pay by user groups for the project, while interest-group analyses examine the parties' understanding of their own needs. Næss (2005) recommended combining different approaches in order to achieve a certain method triangulation assuring proper analysis	Needs analyses may be used to map stakeholders' interests and priorities pertaining to the effects of the project on operational (design) and tactical levels. It can also be used to guide policy formulation
Multi-criteria decision analysis	Multi-criteria decision analysis can prove pertinent to comparing different investment projects that are not necessarily presented according to the same scale. The Sustainability Impact Assessment is one of these, but several alternatives exist that quantify and weigh results up against one another based on scores determined subjectively based on objective, quantifiable data, such as noise and travel length, as well as assumed subjective values, such as health and safety. See, for example, Concept Report No. 18	This analysis is highly subjective and rarely conclusive as different effects on operational, tactical and strategic levels are usually hard to compare and prioritise
Stakeholder analysis	Stakeholder analysis: most methodological approaches to sustainability assessment can involve stakeholder participation, ranging from consultative rounds to active involvement in the analytic process and evaluation. As the comprehension of the importance of stakeholder involvement increases, a range of tools and methodological approaches are developed in order to capture the opinions of and involve interested parties. These tools range from ICT-based communication, via personal interviews, to large-scale conferences and meetings. The aim of the analyses can equally range from mapping of points of views and needs, to active involvement in decision-making	This analysis is commonly performed as one of several steps to secure projects' relevance on operational and tactical levels. In some cases, such analysis can have an impact on policy formulation
Corporate Social Responsibility (CSR) and Corporate Governance	CSR and Corporate Governance are approaches from the private sector developed in order to render visible the societal role of enterprises. The relevance of such approaches to public investment projects must in our opinion be considered as limited, but their ambition to illustrate alternative goalsof an organisation rather than only profit make us note them. Some private organisations elaborate so-called sustainability reports or environmental reports that are attached to the annual accounts	CSR and Corporate Governance are not applicable to projects as such, but are usually applied for the formulation of business strategies and the profiling of companies that are responsible for the operational phase of projects only

Note: The comments are made on the basis of the opinions of the authors only.

Figure 2 No investment project is free from uncertainty and risk. Similar to sustainability, uncertainty takes on different meanings depending on the cause–effect level in consideration. The assumed effects at the different levels are associated with different risks generated by the environment outside of the control of the project as the Logical Framework Approach matrix illustrates. To secure the project from failing to fulfil its objectives, the risks have to be assessed systematically and flexibility should be built into the project design. This figure is freely based on sources written by Samset (2003, 2010).

Figure 3 Assessment of sustainability must be based on all three pillars (the circles represent economy, environment and society) at all the following levels: project output level (contracted delivery – operational level), goal (target group level – tactical level) and purpose (greater societal level – strategic level).12

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