An Index to Measure Sustainability of a Business Project in the Construction Industry: Lithuanian Case

Nomeda Dobrovolskienė and Rima Tamošiūnienė
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Nomeda Dobrovolskienė: Finance Engineering Department, Faculty of Business Management, Vilnius Gediminas Technical University, Saulėtekio al. 11, LT-10223 Vilnius, Lithuania
Rima Tamošiūnienė: Finance Engineering Department, Faculty of Business Management, Vilnius Gediminas Technical University, Saulėtekio al. 11, LT-10223 Vilnius, Lithuania

Sustainability, 2015, vol. 8, issue 1, 1-14

Abstract: The continuous growth of the world population, resource scarcity and the threat of climate change pose numerous environmental and social problems to the world. Therefore, much hope is put in the concept of sustainability. Companies are increasingly coming under strong global pressure to incorporate sustainability considerations into their project decision-making process. Business projects in the construction industry are among the most important, as this sector is one of the largest sectors and of major importance for the national economy and therefore has a huge impact on the environment and society. Thus, we have to explore ways to integrate sustainability into the management of those projects. This paper presents a composite sustainability index of a project (CSIP) which has been created following a review of existing literature and a pilot research study. A pilot research study was conducted in the Lithuanian construction industry between January 2015 and June 2015. Sustainability criteria were chosen and grouped on the basis of the analysis of the literature and different standards relating to sustainability applicable in the construction industry. A survey was used to select and rank the most important sustainability criteria. The index was constructed using multi-criteria decision-making methods. The results of the pilot study revealed that practitioners in the Lithuanian construction sector attach most importance to 15 sustainability criteria. A composite sustainability index of a project combining all these criteria may be useful in assessing the sustainability of a business project and making decisions regarding project portfolio selection and financial resource allocation. When addressing the issue of financial resource allocation in a project portfolio, the decision-maker could take into account not only the project’s return and risk, but also its sustainability. The understanding of this study should enable companies to execute sustainable projects, which could make a contribution to the sustainable development of organizations and thereby increase their competitive advantage.

Keywords: project portfolio management; sustainability; composite sustainability index; construction industry; sustainable construction; resource allocation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2015
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