C. Measurement Capacity

9. Harbourfront Centre Case Study

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The following case study profiles Harbourfront Centre’s effort to develop Measurement Capacity as part of its sustainability program.  The document provides an honest and detailed account of all aspects of the organization’s experience.

A. The Challenge:

Harbourfront Centre’s leadership team believed in the importance of using good data to help inform how we develop and manage our sustainability program.  There were lots of opportunities for us to improve our sustainability practices, but our existing systems and protocols were clearly not producing all of the information needed to intelligently decide which projects to undertake.  The biggest challenge was balancing the need for stronger measurement capacity with our obvious time and financial constraints.

B. Capacity Building:

The critical actions outlined in the Measurement Capacity section of the Refocus Guidebook include:  Building Economic, Social and Measurement Capacity, as well as Developing a Project Assessment Framework.  Let’s review Harbourfront Centre’s experience attempting to carry out each.

1. Building Economic Measurement Capacity

Given the size of our operation and the complexity of measuring economic impact more broadly, we opted to focus on measuring economic impact internally .  With reliable financial management and accounting systems in place, we started with a solid foundation of economic measurement capacity.  We focused on expanding our ability to fully quantify the short- and longer-term financial benefits and costs of potential projects.  As part of this effort we attempted to produce a comprehensive payback period  formula that considered the following factors: 

  • External Grants and Loans:  A great deal of funding was available from external sources that could reduce or provide the capital needed to finance projects.   Immense effort was invested into investigating such opportunities municipally, provincially and nationally as well as through foundations and other funding organizations.
  • Sponsorships:  The potential for securing new or increased sponsorship was highlighted.
  • Capital Required:  This represented the internal budget needed to complete a project. If a project was already planned and budgeted, only the incremental capital needed to finance a more sustainable solution would be considered.
  • Borrowing Costs:  This was the value of any interest to be paid on loans used to finance projects. 
  • Operating Costs:  Any increase or decrease in ongoing operating and/or maintenance costs resulting from the implementation of a project was considered.
  • Carbon Offsets Generated:  As a charity, Harbourfront Centre qualified to participate in a local voluntary market where any carbon offsets generated could be sold to participating businesses.
  • Avoided Maintenance & Replacement Costs:  The need for less frequent maintenance and replacement was considered in evaluating more sustainable assets.
  • Reductions in Resource Use:  Savings associated with reductions in the use of resources like energy, water or supplies was considered.
  • Projected Increases in Utility Pricing:  Credible, publicly-generated projections of how utility prices should increase over time were applied to assets that would result in reduced energy or water use.  This was a method for measuring risk.
  • Utility Incentives:  Guaranteed funding offered by distribution companies in exchange for demonstrated utility savings was calculated.

Starting with a zero budget, and since our Leadership Team was understandably unwilling to risk the organization’s core mandate in favour of pursuing our sustainability objectives, it was necessary to build reliable payback period scenarios .  In one scenario, we considered all sources of impact that had the potential to impact the payback period; in the other, we only included sources of impact that were guaranteed or near certain to impact the payback period.  During the first years of our program, only the second, conservative payback scenario was applied to decision making, although this shifted as the confidence of the Leadership Team grew.  

ASSESSMENT OF CAPACITY DEVELOPED

 

Highly Effective

Typical

Ineffective

Building Economic Measurement Capacity

More sources of impact are included in the measurement of economic impact.  Long run impacts are considered important and a comprehensive payback calculation is employed.

Some new sources of economic impact are measured and a basic payback period is calculated.

Measurement capacity is limited to the factors considered within current measurement of financial performance.

Review of Harbourfront Centre Effort:  Harbourfront Centre’s capacity to measure economic impact was significantly expanded, supported by strong technical expertise and sound data.   An extensive but incomplete payback period was calculated and risk was considered, limited to only expected increases in energy pricing.  Investing a great deal of energy into mapping out the funding opportunities available externally paid huge dividends, allowing for stronger business cases to be developed with more potential for funding to be secured externally.  Not considering broader economic impacts which left an obvious gap, especially given that the organization operates a 10-acre, densely populated urban site that attracts 17 million visitors annually.

2. Building Social Measurement Capacity

The organization, albeit driven by exceptionally strong and publicly shared social values, did not employ a social impact measurement system. Even so, some socially relevant statistics were annually developed around aspects of Harbourfront Centre’s operations such as volunteerism, community access and workplace diversity.  With the discipline still in its infancy, we applied a practical approach to measuring social impacts.  We rated the relative level of social impact a project was expected to have by considering how strongly various stakeholder groups would be affected, positively and negatively.   The stakeholder groups included employees, artists, students, the visiting public and the sustainability industry.

ASSESSMENT OF CAPACITY DEVELOPED

 

Highly Effective

Typical

Ineffective

Building

Social Measurement Capacity

Social impacts affecting all relevant stakeholder groups are quantified using a recognized system or method.

Social impacts affecting some stakeholder groups are measured qualitatively or using very basic quantification techniques.

Social impacts are generally ignored because they are difficult to quantify.

Review of Harbourfront Centre Effort:  Harbourfront Centre’s lack of formal measurement capacity was offset by the organization’s strong socially-oriented values.  It was common for leadership to place importance on social impacts, especially given the organization’s mandate, so the simple measurement techniques used were sufficient for ensuring consideration was given to socially relevant data.    

3. Building Environmental Measurement Capacity

Given the scope of Harbourfront Centre’s operation, it was decided measurement of carbon dioxide equivalent emissions would suffice for assessing the organization’s environmental impact.  As we looked to select a carbon accounting system, our technical partner, Internat Energy Solutions Canada (IESC), presented us with an exciting and unique solution called Encompass®.  Encompass was the result of the adaptation of The Government of France’s (ADEME) Bilan Carbone® methodology for use in Canada.  Harbourfront Centre was offered the opportunity to be the first organization in North America to use this system as part of the model sustainability program IESC had partnered with us to develop.

The Bilan Carbone® system was designed for building comprehensive carbon reduction strategies and had been wildly successful in France since its launch in 2006.  It featured the following characteristics:

  • Managed by government on a non-profit basis.
  • Publicly shared and community developed life-cycle emissions factors.
  • Scope 1, 2 &3 emissions factors and analysis capabilities.
  • Universally applicable; could be used by a municipality, corporation, individual, or event.
  • Accessible to all and free to use aside from minor cost of mandatory training (this was waived for Harbourfront Centre)
  • Method that recognizes people are at the centre of reduction strategies, not just the numbers.
  • Capable of forecasting and building scenarios; very flexible.
  • Has become a standard in France and is renowned and influential globally. 

IESC also employed a variety of advanced systems, tools and resources (like building modeling software) for acquiring the detailed and accurate measurements that would be inputted into the Encompass® tool.

ASSESSMENT OF CAPACITY DEVELOPED

 

Highly Effective

Typical

Ineffective

Building Environmental Measurement Capacity

A robust carbon management system is adopted that employs accurate, life-cycle emissions factors.  The capacity to capture scope I, II and III emissions and perform in depth analysis is developed.

A carbon management system that meets basic accounting standards is adopted and only Scope I and II emissions are captured and reported on.

Environmental impacts generated are considered but not accurately measured or converted into a carbon dioxide equivalent for analysis.

Review of Harbourfront Centre Effort:  The Encompass system adopted at Harbourfront Centre offered industry leading environmental measurement capacity with no ongoing system-related cost.  Through the support of Internat Energy Solutions Canada (IESC), our technical partner, the collection of data and analysis conducted was thorough and effective.  Although the outcome was positive, there was a shortcoming in that the partnership with IESC was heavily leaned on without focus placed on ensuring the carbon measurement and analysis discipline involved was carefully transferred to an individual or department internally for future years. 
 

4. Developing a Project Assessment Framework

The Leadership Team at Harbourfront Centre was committed to not only examining a variety of potential projects, but also having a clear and effective method for comparing their relative value.  An assessment framework was developed to consistently measure the environmental, social and economic costs and benefits of each project being considered.  We needed to balance level of detail with ease of use. To ensure the framework developed was practical, the following approaches were taken:

  • Only factors the Leadership Team was willing to consider toward making decisions were included.
  • A more conservative and optimistic scenario was applied to the financial analysis performed
  • A very basic qualitative evaluation of the social impacts generated was performed.
  • The overall level of environmental, social and economic impact associated with each project was rated. 
  • The ratings (and a selected group of more critical details) were captured in an assessment summary which provided an overall project profile and rating.  Note: The assessment framework template used is available at the end of this document.

ASSESSMENT OF CAPACITY DEVELOPED

 

Highly Effective

Typical

Ineffective

Developing a Project Assessment Framework

A comprehensive framework is established that considers almost all measurable costs and benefits, the outcomes of which are strongly weighed by decision makers.

A detailed assessment framework is developed that weighs mostly economic impacts and lacks full leadership buy-in.

Projects are assessed based mainly on the opinions of a few individuals rather than on the foundation of sound data substantiating the expected costs and benefits. 

Review of Harbourfront Centre Effort:  The assessment framework created was thorough and ensured the relative value of each project to Harbourfront Centre was accurately represented. Leadership was supportive and comfortable using the assessments to help focus decision making.  More practically, the framework was used mainly to identify the best projects and the ones that should be ignored.  The Leadership Team would then discuss the ‘reality of the situation’ and factors that could not be considered within the assessment framework in order to finalize a list of projects for adoption.

5. Overall Results

ASSESSMENT OF CAPACITY DEVELOPED

 

Highly Effective

Typical

Ineffective

Overall Results

The program is operated on the foundation of solid data.  There is a clear understanding of where the best opportunities lie and the projects that return the greatest benefit across the organization are confidently adopted.

Data is important to program efforts but lacking the breadth and accuracy needed to maximize the benefit of each investment made or to credibly demonstrate the full benefit returned.

The program is driven mainly by the pursuit of simple cost savings.  Environmental and social impacts are not assessed or very loosely considered.   There is little effort invested into substantiating the full impact of a project

Review of Harbourfront Centre Effort:  Harbourfront Centre managed to establish relatively strong measurement capacity at little cost to the organization.  Internal planning was driven by concrete data rather than a narrow perspective or bias.  Our assessment framework appealed to key leaders, and solid, reliable data proved to build organizational confidence over time. The leadership team had the capacity to confidently and defensibly make decisions that sincerely supported the defined program objectives and maximized returns.

C. Case in Point:  Desktop Computers and the Triple-Bottom-Line

The following story illuminates a real, exceptional and unexpected outcome that would not have been possible had we not focused on effectively building measurement capacity.  Although there were a few weaknesses identified in this capacity, there were many successful outcomes that resulted from keeping the Refocus Sustainability Program Model goals and standards, as opposed to conventional approaches.

1. Background

An unlikely aspect of Harbourfront Centre’s operation returned an amazingly beneficial opportunity- namely, the desktop computers staff used within the organization’s administrative office.  On the surface, it was observed the box-like CRT monitors in use were dated, inefficient and needed replacement as part of regularly upgrading the organization’s I.T. infrastructure.

2. Measurement Capacity Considerations

Environmental Measurement Capacity:  Energy was one key aspect of Harbourfront Centre’s carbon footprint that was closely analyzed.  Our highly skilled technical partner completed a thorough energy audit. It was determined that Harbourfront Centre’s bulky CRT desktop computers consumed an estimated 61,000 kWh of electricity annually.  More advanced flat-screen LCD monitors could alone decrease electricity use by 6,000 kWh each year.  Furthermore, free energy monitoring software was installed to track computer usage across a sample of 28 units.  It was discovered that most energy was consumed while the computers were not actually in use and that simple setting changes could dramatically reduce energy use by automatically and more quickly entering computers into sleep or hibernate mode.  The combination of new LCD monitors and the ideal sleep settings, could achieve a savings of 28,000 kWh, or a 45% reduction in computer-related energy consumption.  This translated into an estimated reduction of 6.6 tons of carbon dioxide equivalent emissions.

Economic Measurement Capacity:   A 28,000 kWh reduction in energy use represented a savings of more than $6000 annually.  Further, there was no substantial cost to adjusting computer sleep settings; they would simply be tweaked in seconds as part of a scheduled computer upgrade.  A zero-interest loan available from the City of Toronto that would cover half of the project’s capital cost was identified. Based on the remaining $10,000 monitor replacement cost, a conservative financial calculation was performed demonstrating a payback period of less than two years could be achieved based on the expected energy cost savings.  This excluded the impact of projected increases in energy pricing and the potential for selling carbon offsets within the voluntary market that existed locally.

Social Measurement Capacity:  As part of assessing social impacts and planned change management efforts, various stakeholder groups were engaged.  The Director of the I.T. Department indicated that many of the computers were over five years old and approaching the end of their lease, therefore requiring replacement.  Although this was a planned capital expenditure, it had been delayed due to unexpected financial difficulties.   By speaking with staff, we also learned natural light shining into cubicles resulted in a significant level of glare that was exaggerated by the CRT monitor screens still in use.  Further, because CRT monitors are large and box-like in nature, there were few options for positioning a monitor to avoid glare; this also limited the ergonomics of each workstation as there were few spots on a desk that could actually accommodate such a sizable monitor.  A switch to LCD monitors would clearly satisfy the I.T. department as well as improve staff comfort and productivity.

Project Assessment Framework:   Assembling a comprehensive project assessment helped push this project forward.   The environmental, financial and social benefits all together, were clear, substantiated and immense.  The loan identified would actually reduce the I.T. Department’s approved but delayed capital budget request; in essence the project would cost less than their already planned expenditure.  This would allow for the remaining capital to help finance another needed expenditure.  For this reason, there was virtually nothing to approve. 

3. Outcomes

The project was one of the first undertaken and resulted in the replacement of 175 desktop computer monitors and the adjustment of sleep settings across the organization.  Energy savings were monitored and confirmed to be in line with projections and the related energy savings have been continually accrued year over year.  Staff were pleased to receive the upgrade, especially because there had been so many prior complaints shared.  The success of the project contributed to the level of confidence and support surrounding Harbourfront Centre’s sustainability program, including the importance of looking at economic, social and environmental impacts together.

4. Conclusion

In retrospect, the project would not have been possible without the rigor applied to not only measuring but also evaluating the details of Harbourfront Centre’s energy use.  The environmental measurement capacity established allowed Harbourfront Centre to identify this opportunity and substantiate its magnitude, especially financially.  Having sound knowledge of available funding opportunities was also a key to the project’s success.  Finally, the capacity to measure social impact, which involved engaging stakeholders as part of assessing the project and more general change management efforts, greatly expanded the project’s profile and amazingly positive impact.  Using a thorough and well-supported project assessment framework to help clearly and credibly profile the project’s entire value also paid off.  It is evident that without strong measurement capacity, all aspects of the opportunity may not have been identified or fully valued and its approval may not have been a given, as it was in this case.

5. Discussion Questions

  • Was it detrimental for .HFC focused only on internal economic impacts. Discuss a few advantages and disadvantages of this.
  • Why do you think the HFC Leadership Team only used their assessment framework to identify the highest potential projects, rather than to determine which to adopt outright? In other words, why was the project assessment framework not the final step in the decision process?
  • Suppose HFC had not bothered to look at the social impacts around replacing desktop computers.  Suppose they never bothered to engage staff at all.  How might the replacement of HFC’s desktop computers turned out differently?  What if they had never measured the specifics of the energy use?

 

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