Measuring the Impact

of ESG Initiatives
Contents
Ambition Quantified........................................................ 3
Identify and Align.............................................................. 6
Track Impact.................................................................. 10
Get the Word Out...................................................... 14
The Right Way to Measure Impact.................... 17
Illustrations by Eglė Plytnikaitė
Ambition Quantified
To unleash the real power of ESG initiatives,
organizations must set the right targets and
track where they’re delivering — or faltering.

I
n a time of grave challenges to people and the planet, companies
face increasing expectations to look beyond the bottom line and
ensure their initiatives create a better world for all. Whether their
projects address a worsening climate crisis or global economic and
educational disparities, it’s clear that companies need to do more
than set ambitious goals for environmental, social and governance
(ESG) progress.
This awareness, fueled by growing interest in ESG as well as dire
projections on long-term outlooks for benchmarks like greenhouse
gas emissions and income inequality, is driving a fundamental
rethink of how project leaders and their teams define and mea-
sure outcomes.

Measuring the Impact of ESG Initiatives 3

 That means developing rigorous plans

63%
to identify, track and analyze the most
critical elements that deliver deep and
meaningful ROI — and align with the
organization’s long-term ESG vision.
Yet many organizations see an uphill of decision makers report
battle: 63% of decision makers report
feeling unprepared to meet their ESG
feeling unprepared to
goals and government and regula- meet their ESG goals and
tory reporting mandates, according to a government and regulatory
2022 global survey by Workiva. On top
reporting mandates.
of that, 72% lack confidence in the data
Source: Workiva
reported to stakeholders, the survey
says. That leaves a huge gap when
it comes to tracking performance —
and keeping stakeholders in the loop,
including investors who expect trans-
parency in data and insights from
ESG initiatives.
The increasing attention on ESG presents
opportunities but also raises the stakes for
project leaders quantifying the impact of
ESG initiatives. External pressure to track
impact with greater rigor is on the horizon —
and organizations need to start preparing
for those requirements now. As noted
in The ESG Imperative, the United States
recently proposed new government
mandates for climate disclosures for
publicly listed companies — following
the lead of the United Kingdom, Japan,
New Zealand and Singapore. Additionally,
new funding for the U.S. Environmental
Protection Agency (EPA) will help create
standards for companies’ climate
commitments and plans to reduce
greenhouse gases. The agency also will
press for greater transparency from
companies about their progress toward
meeting these commitments.
As governments set ambitious climate goals

Measuring the Impact of ESG Initiatives 4

and organizations look to supercharge their Green Project Management (GPM).
ESG initiatives, project leaders are best posi- Project managers are well positioned to use
tioned to help them carry out a reality check their skills to identify opportunities to move
on that progress — or to what degree it’s the needle on ESG initiatives — and quantify
lacking. One telling stat: While a strong major- that impact through effective measurement.
ity of executives, government leaders and Perhaps just as importantly, they can also
sustainability experts see an increased focus serve as the first line of defense if those
on achieving sustainability goals, less than half projects aren’t delivering as intended.
(46%) of project managers agree, according
to a 2022 report by PMI strategic partner

First-Mover Mindset for ESG Issues

Prioritizing ESG initiatives doesn’t just impact the here and now. That’s why companies
need to be future-focused to maximize the benefits. Here’s how organizations emphasiz-
ing sustainability are achieving their goals:

Expect climate change to have a high impact on organizational strategy over the next three years
73%
Are very concerned about climate change
74%
Plan to achieve net-zero carbon emissions by 2030 or before
82%
Source: Deloitte 2022 CxO Sustainability Report

Organizations that prioritize sustainability believe their efforts will have a positive impact
in critical categories:
Customer satisfaction
44%
Innovation
43%
Employee morale/well-being
42%
Addressing climate change
40%
Investor returns/satisfaction
31%
Revenue from new business
29%
Addressing climate change
Source: Deloitte 2023 CxO Sustainability Report

Measuring the Impact of ESG Initiatives 5

Identify and Align
What does ESG progress look like? Mapping the intended impact of
ESG initiatives starts long before execution begins. Project leaders
must define which goals and objectives teams need to achieve, then
establish which key performance indicators (KPIs) will frame how they
measure ESG impact.
One starting point: Understand the organization’s ESG priorities
and integrate them into planning processes at the portfolio, pro-
gram and project levels. Engage with sponsors and other stake-
holders to establish clear goals in sync with internal guidelines or
legal requirements, such as government regulations and disclosure
mandates, and a clear picture of the impact to schedule, bud-
get, scope and resources. These conversations can also explore
whether any NGO accelerators fit the organization’s larger vision
for ESG. For example, which United Nations Sustainable Develop-
ment Goals (UN SDGs) might align with project goals? Once these
drivers are clear, benefits realization management approaches can
help project managers define a project’s sustainability goals from
the outset and then design the appropriate workflows to deliver on
those expected benefits.

Measuring the Impact of ESG Initiatives 6

 Risk management practices enable
project managers to identify and mit-
igate potential negative impacts up ESG IN ACTION:
front, including environmental and
Data-Driven Results
social impacts and anticipated regula-
To track progress on its goal to
tory changes. For instance, construction achieve carbon neutrality in its own
project managers need to assess how the operations by 2025 — and across
team’s work might negatively impact the its supply chain by 2050 — Ger-
man manufacturing giant Adidas
environment — such as how the work might is turning to tech. The company
disrupt natural habitats. By building a risk analyzes data from across the
register to flag potential issues, project enterprise to calculate a “mone-
tized environmental footprint” that
leaders can develop workarounds or carve covers everything from raw mate-
out which red flags will require monitoring rial production to waste disposal.
While the tool helps build internal
throughout the project.
and external reports that support
Bolstered with that information, proj- ESG assessments, the company is
ect leaders can carefully incorporate working to upgrade the system so
it can capture real-time data. The
those targets into the business case move would accelerate the mea-
and project plan, says Joel Car- surement of ESG impact and help
boni, Ph.D., president of GPM, Detroit, project leaders know more quickly
when to pivot or stay the course.
Michigan, USA.
“Have a conversation with project
owners and say, ‘Is this important to you,
to your clients, your stakeholders?’ Project
sponsors should be partners with project
managers to deliver projects sustainably.”
As they develop ESG goals, project
leaders should collaborate with
stakeholders at the highest possi-
“The ESG agenda is a change
ble level, says Africa Rubio, sustainability agenda, a transformation
services director for Mexico, Central agenda.”
America and the Caribbean at global —Orlando Nastri, FIA Business School,
commercial real estate services firm Cush- São Paulo, Brazil

man & Wakefield, Mexico City, Mexico.

If project managers want to ensure
their ESG benchmarks are a prior-
ity for the whole team, they need
to secure the support of the CEO
or a director.
“That person needs to be convinced,
because the commitment needs to spread
to the entire company,” Rubio says.

Measuring the Impact of ESG Initiatives 7

 And that means selling the value of
the ESG target — and how it will get
A Boost from ESG Influencers done. “We try to communicate with the
client that ESG scores measuring your
The stakeholders who help project teams
identify KPIs span many roles and departments. performance are, of course, good for the
Which have the greatest focus and input for planet, but the companies want to hear
shaping the company’s ESG reporting strategy? how it’s financially feasible.”
Grand ambitions require stringent
frameworks. An example of this kind of
broad ESG initiative is Cushman & Wake-
Chief
23% sustainability field’s commitment to achieving net-zero
officer greenhouse gas emissions by 2050. To
get there, the company follows guidelines
defined by the Science Based Targets ini-
tiative. The company screens for emis-
sions across its value chain, which includes
Board/audit
21% committee those generated from management of cli-
ent facilities and properties. Cushman &
Wakefield also works with clients to reduce
indirect emissions generated through use
and management of real estate.
Communications/
13% investor relations
More broadly, organizations and their
project leaders can emphasize the value
of meeting ESG targets through training
or project-specific workshops that foster
knowledge-sharing and collaboration across
10% Finance
the enterprise to identify best practices
and lessons learned. As part of a continuous
improvement approach, these collaborations
can facilitate the replication of successful
6% Risk sustainable practices across the organi-
zation and the refinement of strategies to
address risks and identify opportunities.
For instance, project leaders can help
3% Operations
teams understand the distinctions between
quantitative and qualitative KPIs. At Cush-
man & Wakefield, quantitative KPIs for
3% Internal audit construction projects often focus on energy-
consumption metrics such as electricity
usage and transportation. For qualitative
Source: The ESG Journey to Assurance, KPMG, 2022
KPIs, Rubio and her team use tools, such as
surveys and focus groups, to help determine

Measuring the Impact of ESG Initiatives 8

 way to demonstrate the client’s commit-
ment to DE&I.
Such metrics tell a story that can show
momentum and build support. “The ESG
“Project sponsors should be
agenda is a change agenda, a trans-
partners with project managers
to deliver projects sustainably.” formation agenda,” says Orlando Nastri,
a professor at FIA Business School and
—Joel Carboni, Ph.D., GPM, Detroit, Michigan, USA
an ESG project consultant in São Paulo,
whether a company is meeting its goals for Brazil. “We can have pragmatic metrics
diversity, equity and inclusion (DE&I), which in — for example, the number of women
turn can boost employee satisfaction and or Black people in leadership roles. We
talent retention. can look at the numbers of promotions in
In one recently completed mixed-use devel- certain departments. But it’s also really
opment project in Latin America, the client important to measure the atmosphere,
organization had environmental goals that how the organization is moving.”
could be measured quantitatively. But it also Nastri recently worked with a client
had a qualitative objective to be accepted on a full week of events to engage and
by residents of the vulnerable community mobilize more than 10,000 employees to collab-
where the development would be located. orate toward ESG goals. The training included
Cushman & Wakefield helped create a plan to discussions on aligning projects with the U.N.
involve community members in the construc- Global Compact. Nastri says one way to track
tion, providing jobs and the resulting income. buy-in from employees is to conduct surveys
The building also was designed to be entirely that measure the willingness of respondents to
accessible to people with disabilities, another recommend the ESG efforts to others.

Reporting ESG Impact: Room for Improvement

ESG initiatives can’t happen in a vacuum. Project leaders need to report the impact of their
outcomes, yet many organizations haven’t developed adequate strategies for doing so.

30%
have developed a reporting strategy and have issued at least one report.

28%
are in the process of developing an ESG reporting strategy.

15%
are reassessing existing reporting strategies.

13%
have not developed a reporting strategy.

6%
have developed a reporting strategy but have yet to implement it.

Source: The ESG Journey to Assurance, KPMG, 2022

Measuring the Impact of ESG Initiatives 9

Track Impact
Projects have the power to drive positive impact, but organizations
won’t know the extent of such impact unless they have performance
data based on clear and unbiased metrics. Solid governance at the pro-
gram level helps ensure that ESG priorities are integrated into processes
for making decisions, setting targets and monitoring progress toward
sustainability goals. Applied to an individual project, those priorities can
translate into KPIs to track the number of jobs created in underserved
communities, improvements in native species populations or reductions
in on-site accidents. And in many cases, teams use digital tools to cap-
ture and synthesize that data to measure the impact more accurately.
To track progress toward its environmental goals, for example,
Rubio’s team employs digital tools that measure performance in
energy and water use, waste, carbon dioxide emissions, the human
experience and other dimensions. This helps Rubio and her team to
better assess how effectively a project is achieving its ESG targets.
Her team also creates monthly reports for clients. By tracking and
analyzing the data for those reports, the team knows in real time
whether any particular metric is falling short of goals.

Measuring the Impact of ESG Initiatives 10

 Yet simply reporting an issue isn’t enough.
“You need to have the results, but you also
have to solve the problem,” Rubio says. To help
clients identify the right solution, the team typ-
ically designs several options, calculating the “You need to have the
impact of each, and presents a menu of strat- results, but you also have
egies that can best achieve ESG outcomes. to solve the problem.”
It’s up to project leaders to continuously —Africa Rubio, Cushman & Wakefield,
Mexico City, Mexico
monitor data — and be ready to pivot when
metrics indicate that KPIs are trending in
the wrong direction. And they must keep
stakeholders informed, too. Nastri says set-
ting expectations for the frequency and
purpose of touchpoints — whether it’s a
daily stand-up or a monthly report — can
help ensure everyone is in the loop on how
the project is advancing.
That kind of consistent communica-
tion is particularly important to cement
partnerships with nonprofits or in cases
where the association is voluntary.

ESG IN ACTION:

AI Reality
Dutch financial firm Rabobank is
collaborating with Microsoft to
roll out a platform that helps the
farmers they invest in to track
their carbon output. Using remote
satellite sensors and AI algorithms,
the technology helps farmers
track their carbon production —
and mitigate it. Any time farmers
sequester more carbon than they
produce, it can be sold to com-
panies looking to offset their own
emissions. Such tech-driven metrics
have increased the productivity on
those farms by at least 15% and
increased their income by 20%.

Measuring the Impact of ESG Initiatives 11

 “I cannot oblige them to do something,”
Nastri says. “In these projects, even though
it’s more difficult, we need a clear target
to reach and clear touchpoints. Otherwise,
we cannot move forward.”
Even established ESG initiatives require
ongoing metrics to demonstrate that they
continue to meet expectations. Case in
point: UNICEF’s Learning Passport, which
designs digital platforms powered by
Microsoft to provide portable educational
materials to nearly 2.5 million students in
26 countries. To ensure the program is still
delivering on its goals, the team works with
UNICEF’s independent research team in Italy
to measure how well students are learning.
Data include how often students log in and
how many units they complete, as well as
qualitative user feedback, which the Learn-
ing Passport team can then use to iterate
and improve.
The research team “will poke holes in your
stuff,” says Mac Glovinsky, global program
chief of Learning Passport at UNICEF in New
York, New York, USA. “We use them as a real-
ity check to say, ‘This is what’s happening,
this is what’s not happening.’”
In one recent case in Sierra Leone, the
education ministry worked with Learning
Passport to design a pilot allowing students
to take practice exams. The goal was to
test online methods of studying for national
exams and analyze the impact and effec-
tiveness of online preparation for those
exams. The pilot was aimed at hundreds of
children in 20 schools. After hearing about
the program, thousands of students outside
of the pilot used the Learning Passport to
study for exams.
“We use [metrics] as a
When the pilot was completed, the research
reality check.”
team captured data about how the students
—Mac Glovinsky, UNICEF, New York,
New York, USA used the technology and how they felt about it.

Measuring the Impact of ESG Initiatives 12

Teachers unanimously reported that they found “Improved learning can look like a lot of
the tool useful and would recommend it to different things,” Glovinsky says. “Are you
other instructors, and 92% of students found teaching digital skills? Can children read? Can
the program to be effective. As researchers they understand numbers? Are they ready to
and Glovinsky’s team use those results to design learn? From a global level, foundational literacy
the next round of testing, they will also ensure and numeracy are critical to UNICEF. At the
any changes align with UN SDG 4, which helps same time, we work to meet the needs that
the team define quality education. individual countries have articulated.”

Which Sustainability Action Plan Speaks the Loudest?

Executives understand they must take meaningful steps to deliver true environmental
impact. Here are some of the most common actions:
Using more sustainable materials (recycled materials, low-emitting products)
59%
Increasing the efficiency of energy use
59%
Reducing air travel
55%
Adopting energy-efficient or climate-friendly machinery, technologies and equipment
54%
Deploying employee training on climate change actions and impacts
50%

These actions are harder to implement but can move the needle even more, executives say:
Developing new climate-friendly products and services
49%
Requiring suppliers and business partners to meet sustainability criteria
44%
Updating/relocating facilities to make them more resistant to climate impacts
43%
Tying senior leaders’ compensation to environmental sustainability performance
33%
Incorporating climate considerations into lobbying/political donations
32%
Source: Deloitte 2023 CxO Sustainability Report

Measuring the Impact of ESG Initiatives 13

Get the Word Out
By reporting and sharing outcomes of ESG initiatives, companies can
increase visibility for a project’s impact, create buy-in for the greater
ESG vision and ensure future ESG projects achieve maximum value.
But documentation needs to be customized so that myriad stake-
holders — from sponsors to community members to project teams
— can easily digest and act on the insights that matter to them most.
That takes strong knowledge management and communication pro-
cesses that take all stakeholder needs into account. Project profession-
als must create reporting processes and templates that allow team
members to share information more easily — and to do so in ways that
align with any regulations or requirements. They also must determine
who’s responsible for updating documentation so that long-term out-
comes are captured well past the project life cycle.
For instance, a construction project might take up to three years
from conception to operation, Rubio says. During that time, multiple
team members and project leaders might come and go. Even the proj-
ect owner might shift. “The ESG policies need to stay in a document

Measuring the Impact of ESG Initiatives 14

 that belongs with the project records and not
with the people managing the project at that
ESG IN ACTION: time,” she says.
Inclusive Outcomes Once there’s a collection process in
To achieve its goal of building and place, those tangible ESG goals and out-
maintaining a diverse workforce, comes can be promoted. For instance,
consumer products powerhouse Cushman & Wakefield shines a spotlight
Procter & Gamble is developing an
inclusive leadership assessment tool on the approval of its net-zero target by
and investing in analytics to help the Science Based Targets initiative and
the company measure both the
its inclusion in the 2022 Bloomberg Gen-
depth and breadth of progress.
Walmart, meanwhile, is capturing der-Equality Index. The company also high-
employee feedback on its DE&I lights amending its revolving credit facility
initiatives and workplace well-being
via an app. To encourage full par-
to add incentives linked to sustainability
ticipation — and ultimately boost features, based on its greenhouse gas
the accuracy of ESG metrics — the emission-reduction targets.
company distributed free smart-
phones to 740,000 store associ- Rubio’s team also helps building owners
ates in 2022 so they had reliable use ESG metrics to tell their story to stake-
access to the app. holders, including investors, prospective
tenants, the community at large or even
future project collaborators. By using the
data to develop marketing materials and
“ESG policies need to stay in a investor relations messaging, project teams
document that belongs with the can help owners address questions about
project records and not with the
which ESG measures were incorporated
people managing the project at
that time.” and why. Such data dives increase trans-
—Africa Rubio
parency and authenticity for ESG initiatives.
In the process, teams can mitigate the
possibility of ESG actions being dismissed
as having a greater positive impact than
what’s true, or being perceived as propping
up initiatives with misleading claims, also
known as greenwashing.
“For example, people might say, ‘Why
don’t you have a green roof?’ For some
cases that could be a very greenwash-
able thing, in my point of view,” says Rubio.
Having clear metrics helps her team
justify ESG decision-making and show, for
instance, why a solar reflective roof coat-
ing might have a greater impact than a

Measuring the Impact of ESG Initiatives 15

 A Call for an ESG Action Plan

The need to focus on environmental, social and

governance (ESG) issues is urgent. The good
news: Companies increasingly see the value of
prioritizing ESG initiatives.

83%
of executives believe focusing on
ESG will make a business better.
green roof when it comes to achieving
the larger goal of reducing an urban area’s
heat-island effect. But organizations vary in their commitment to
“We can show the real calculations on the making ESG a strategic priority:
impact — we can do the comparison and we
41%
can show the comparison,” she says. “With
Clearly linked to
the numbers, you can never lie.” business strategy
Communication with shareholders, execu-
tives and the board of directors about out-
comes not only shows how a particular project
contributes to larger ESG goals, but also
builds momentum for future projects, Nastri
says. And that communication of ESG success 27%
stories — whether through social media, a Not sure/not
podcast, a newsletter or a case study — must applicable
extend outside the company so stakeholders
across the community understand the impact.
When communicating outcomes, don’t
overlook a crucial stakeholder group — the 25%
project team members. “They need to have Tangential to
business strategy
the evidence and own the results,” Nastri says.
“It makes people happy to know that they
achieved something together.” 7%
Strategy built
around ESG
“[Team members] need to
have the evidence and own
the results.” Source: The ESG Journey to Assurance, KPMG, 2022

—Orlando Nastri

Measuring the Impact of ESG Initiatives 16

The Right Way to Measure Impact
To turn ESG ambitions into reality, organizations need a rigorous plan to
track the impact of their projects — and adapt when necessary. Strong
project and program management practices enable project leaders and
teams to proactively identify what to measure, ensure the metrics align
with the strategic vision and document outcomes in ways that sustain
commitment and deliver results that translate the organization’s ESG goals
into reality.

Visit PMI.org/esg to learn more.

Measuring the Impact of ESG Initiatives 17

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