Consultant's Corner: Sustainability And Asset Management — How The Two Are Connected
By John Fortin, Priscilla Bloomfield, and Lindsay Ritter, CH2M HILL
Sustainability and asset management are more than just buzz words in the water industry. Sustainability, which in its broadest sense refers to ethics, governance, transparency, business relationships, financial stewardship, economic development, value, employment practices, and environment stewardship, is a key consideration for adopters of asset management programs. Asset management has evolved to ensure good decision making, minimize lifecycle costs, evaluate, understand and manage risk, improve reliability, enhance knowledge management and decision-making, improve communications with internal and external stakeholders and the public, and make effective use of infrastructure’s lifecycle.
For several years, we have seen numerous utilities effectively integrate the two frameworks to increase customer service and overall business performance. However, if they haven’t already done so, utilities who have adopted asset management as a business strategy should consider expanding the scope of consideration beyond just their bottom line to include the environmental and social costs of doing business. Taking a triple bottom line (TBL) approach and integrating asset management with sustainability can prove to be a robust and effective use of best management processes for optimal performance.
While some utilities are doing this very well, in many North American utilities, sustainability and asset management are in disparate parts of the utility or are led by separate directors and the functions tend to compete for resources (especially funding resources). By integrating the two frameworks, utilities can achieve a full range of benefits by recognizing how the lifecycle of its assets — from planning, design, construction, operation, maintenance, repair replacement, and disposal — impact the ecosystem and natural resources, as well as levels of service and the risks and costs associated with operating and maintaining their physical assets.
Consideration of using a TBL approach is really about embracing sustainability. Often, asset management is considered to be narrowly focused on efficient maintenance, repair, rehabilitation and replacement of assets, but it should also focus on social, environmental, and financial benefits and costs. Life cycle cost minimization considers energy use, air quality impacts, impacts on the natural environment, and other external factors, like traffic and impacts associated with asset construction. When looking at both through a more holistic manner, it becomes evident that asset management and sustainability principles are aligned and support one another completely — all the more reason for utilities to consider integrating the two frameworks under a single function and/or director.
Utilities that incorporate a TBL approach in asset management decisions often incorporate it very formally through business cases. Seattle Public Utilities (SPU) is one such utility. Early in the development of its asset management program, SPU worked with a local consultant to develop a “triple bottom line guidebook” that serves as training guide in basic and advanced life cycle modeling techniques for SPU staff who prepare business cases. The TBL Guidebook has become the foundation of the methodologies that SPU requires of nearly all business cases. Two examples of SPU business cases (Rock Creek Fishway Project Development Plan 2 and Knickerbocker Floodplain Reconnection Project) demonstrate how impacts on habitat and wildlife can be considered in investment decisions and also impact final decisions.
At CH2M HILL, we emphasize to our clients the importance of considering sustainability in the development and execution of asset management programs, not just for utilities, but clients across all of our markets and sectors. By integrating sustainability and asset management into everyday business decisions, organizations are making a positive impact on their bottom line, while also improving the world around them. Worldwide water shortages, impending impacts associated with changing weather and climate patterns, and limited natural and financial resources have created an urgency to consider TBL in asset investment decisions. Utilities who recognize the alignment and benefits of integrating asset management into their decision making early will be better prepared to adapt and overcome the challenges facing the industry today and in the future.
John Fortin is an asset management practitioner at CH2M HILL with more than 25 years of facilities lifecycle experience including design, construction and O&M. He has developed and implemented effective change management programs required to implement an asset management culture. Mr. Fortin is internationally recognized for his leadership in strategy development and implementation and change management approaches. He uses innovative techniques to provide sustainable change to client’s asset management improvement programs.
Priscilla Bloomfield is a Senior Project Manager in CH2M HILL’s Strategic Consulting group. Her experience is in strategic and master planning, asset management, and benchmarking.
Lindsay Ritter is an experienced consultant focused on sustainability program development, planning, and mobilization for CH2M HILL. In her current role as the Global Practice Lead for Asset & Operations Management for CH2M HILL’s Transportation Market, Ms. Ritter works with asset and operations management leaders and teams to share best practices, develop strategies, and integrate sustainable solutions into our delivery of operations services for our clients. In her previous role as Sustainability Director for CH2M HILL’s Operations Management team, she developed and led the company’s O&M sustainability program that empowers CH2M HILL employees to enhance the environment and generally improve the operational efficiency of their facilities. She also served on CH2M HILL’s Sustainability Leadership Board, a cross-discipline group chartered with building sustainable solutions and delivering complex sustainability projects.
Image credit: "Pipe Light," Darkday © 2014, used under an Attribution 2.0 Generic license: https://creativecommons.org/licenses/by/2.0/