Sustainable Return on Investment
Graphic Courtesy of Eric C. Bill, Senior Economist, HDR Inc.
HDR’s Sustainable Return on Investment (SROI) process assesses the benefits of a transportation infrastructure project and a green business case as compared to a no build scenario. The SROI model includes four phases, which are very similar to the four phases of the HIA:
I. Development of a structured and logical plan (assessment of “how” all the variables and assumptions interact to determine the impact of a project).
II. Quantifying the input data and assumptions (statistical probability/uncertainty analysis of the project elements).
III. Risk assessment session with stakeholders (step 2 elements).
IV. Model Simulation and forecasting results (data modeling of various project scenarios and statistically based probability distributions).
The SROI model promotes transparency, accountability, and efficient use of all social resources necessary to maximize the “triple bottom line” of economic, social and environmental value. In addition, the SROI methodology builds on best practices in Cost-Benefit Analysis and Financial Analysis methodologies, complemented by state-of-the-art Risk Analysis and Stakeholder Elicitation techniques. The SROI process identifies the significant impacts of a project and values these impacts in monetary terms, while accounting for non-monetary benefits and external costs and benefits. In essence, the SROI is a feasibility study in conjunction with the monetized value of non-cash costs of environment, community variables and external benefits. Together the SROI elements determine the overall utility (full value) and risk of a project. The SROI model also represents an ecological approach that provides a “general framework for understanding the nature of people's transactions with their physical and socio-cultural surroundings.” Therefore “people” are the determining factor influenced both by the physical (e.g., geography, architecture, and technology) and social environment (e.g., culture, economics, and politics). Human utility (health/well-being) is multifaceted with an interplay among all of the elements and factors of the SROI model. Interestingly, the SROI concept is the basis of public health planning and program development within the built environment.
SROI originated from a Commitment to Action by HDR to develop a new generation of public decision support metrics for the Clinton Global Initiative (CGI) in 2007. SROI was developed with, and peer-reviewed, by Columbia University’s Graduate School of International Public Affairs and launched at the 2009 CGI annual meeting. Since then, the SROI process has been used by HDR to evaluate the monetary value of sustainability programs and projects valued at over $10 Billion.
For more information on the SROI model, please contact:
Stephane Larocque, MBA
Associate vice President, HDR Decision Economics
stephane.larocque@hdrinc.com
Eric Bill, MBA
Senior Economist, HDR Decision Economics
eric.bill@hdrinc.com
HDR, Inc.
545 Carling Avenue, Suite 410Ottawa, ON K1Z 8P9
613-907-7427
I. Development of a structured and logical plan (assessment of “how” all the variables and assumptions interact to determine the impact of a project).
II. Quantifying the input data and assumptions (statistical probability/uncertainty analysis of the project elements).
III. Risk assessment session with stakeholders (step 2 elements).
IV. Model Simulation and forecasting results (data modeling of various project scenarios and statistically based probability distributions).
The SROI model promotes transparency, accountability, and efficient use of all social resources necessary to maximize the “triple bottom line” of economic, social and environmental value. In addition, the SROI methodology builds on best practices in Cost-Benefit Analysis and Financial Analysis methodologies, complemented by state-of-the-art Risk Analysis and Stakeholder Elicitation techniques. The SROI process identifies the significant impacts of a project and values these impacts in monetary terms, while accounting for non-monetary benefits and external costs and benefits. In essence, the SROI is a feasibility study in conjunction with the monetized value of non-cash costs of environment, community variables and external benefits. Together the SROI elements determine the overall utility (full value) and risk of a project. The SROI model also represents an ecological approach that provides a “general framework for understanding the nature of people's transactions with their physical and socio-cultural surroundings.” Therefore “people” are the determining factor influenced both by the physical (e.g., geography, architecture, and technology) and social environment (e.g., culture, economics, and politics). Human utility (health/well-being) is multifaceted with an interplay among all of the elements and factors of the SROI model. Interestingly, the SROI concept is the basis of public health planning and program development within the built environment.
SROI originated from a Commitment to Action by HDR to develop a new generation of public decision support metrics for the Clinton Global Initiative (CGI) in 2007. SROI was developed with, and peer-reviewed, by Columbia University’s Graduate School of International Public Affairs and launched at the 2009 CGI annual meeting. Since then, the SROI process has been used by HDR to evaluate the monetary value of sustainability programs and projects valued at over $10 Billion.
For more information on the SROI model, please contact:
Stephane Larocque, MBA
Associate vice President, HDR Decision Economics
stephane.larocque@hdrinc.com
Eric Bill, MBA
Senior Economist, HDR Decision Economics
eric.bill@hdrinc.com
HDR, Inc.
545 Carling Avenue, Suite 410Ottawa, ON K1Z 8P9
613-907-7427
| sroi_brochure_hdr.pdf |
| hdr_sroi_model.pdf |
