Stuart McLachlan

8 December 2011 – UK-based WSP managing director and global head of environment and energy, Stuart McLachlan, gives short shrift to much of the dominant thinking on sustainability and resource efficiency.

In Australia recently as part of his bi-annual visits, and not long after the company consolidated its brand (which was previously WSP Lincolne Scott), McLachlan says resource efficiency can only get us so far. It’s what companies should be doing anyway: becoming more efficient, shaving costs, adding to the bottom line.

And let’s not forget about the top line, he says.

Take a look at the Iphone. “This was probably not invented by Apple as part of a sustainability workshop,” McLachlan says, but it could have been, because they could have asked, how are we to dematerialise listening to music? How can I get my entire CD collection on this? This is a very sustainable outcome.”

If companies think, ‘what are the business opportunities now we have with technology?’, then the future starts to look a lot more exciting, McLachlan says.

In the UK the group is working to adapt a unique technology developed by the Australian side of the company for retailers who want their customers to be able to come into a store, scan a product with their smartphone and instantly download the product’s sustainability story.

“So [the retailers are saying] we can get our consumers really excited about our products and what we are doing with these products,” McLachlan says. “And that to me is a story that is more transformational.”

Missing the main game

But resource scarcity? “The problem is we are talking about staying in the existing paradigm … I think that we need to stop talking about having to go begrudgingly on this path solely of resource efficiency because, while it’s important that we tread more lightly on the planet … we still have a hell of a long way to go.

“And so we have to find a different system. You would think the economic crisis around the world would drive us to a different system. But you see the financial sector in the UK still doing extremely well and handing out big bonuses. Lots of people will talk about the negatives rather than saying, that’s a really positive destination over there.”

Waiting for politicians to come up with the right frameworks and the right carbon emissions targets or regulations to mandate these is to miss the main game, McLachlan says, which is “transformational change.”

Back to the future
Humans are rather unimaginative creatures when it comes to imagining a future that is vastly different, and McLachlan has sympathy for this. His answer is to go to Sweden, where you can see it for yourself.

“For most people – it must be human nature and I’m no behavioural psychologist – but it’s easier to visualise something if they can see it. So if you want to go and see what he future looks like, go to Sweden.

“It’s living a low-carbon and sustainable lifestyle. It’s not completely there, but it is a long way down the road and you can see how positive the people are. Their economy is tremendous, and so is their quality of living, compared to other markets. And they’ve got a banking system that’s working quite well.”

Perhaps this is a standout example of a brave society. For most, change comes much harder, and McLachlan says, sadly,most people need a “9/11 moment” to act.

The view from the UK
So what’s the view on climate change, from the point of view of business on the global stage?

“In the UK, we have a climate change policy and carbon budgets,” McLachlan says
“The definitions have been watered down a little, but there’s also more regulation on the block that, by 2018, restricts the ability to develop buildings unless they meet certain energy criteria.”

Buildings also need to meet a minimum energy efficiency standard before they can be leased, not simply declare their energy efficiency rating, as in Australia.

The changes in policy have spawned “a lot of work” around sustainable retrofits, McLachlan says.

The same goes for the solar panel industry, whose trajectory mimics Australia’s.

“There was a whole industry borne out of the feed-in tariff that created a lot of employment and a huge amount of excitement, and a lot of people fitting solar panels on their roofs. And where else could I get a 7.5 per cent return on my investment?”

Now the UK is in the process of dramatically reducing the feed-in tariff

“And so the government has taken quite a controversial position in terms of cutting the incentives of that scene,” he says.

Of course there is now a global surplus of solar panels, so the cost has come down dramatically, and is now in the reach of the general public, he adds.

But in the end, most successful schemes are motivated by a link to “some kind of economic benefit”.

And that’s not what leads to transformational change.

“From a government perspective, the problem is that 90 per cent of people think climate change won’t affect them for 20-30 years, so if you compare that to job security or the children’s education, the immediacy of these issues will tend to come to the surface for more immediate action by politicians.

“The government will tend to say: ‘there’s a 100 per cent risk now, compared to a 90 per cent risk of something else in the future’.”

McLachlan compares our relationship with climate change to that of addicts who will only act to change when they are in the gutter.

“The European and Greek financial crisis is similar,” he says. “It’s been happening for a long time, but it’s only when the country is at the point of saying, ‘here we are, it’s only two weeks away from not paying the nurses and teachers and military and police that we agree to a bailout worth hundreds of millions’.

“If you apply that to climate change, it could be that not much will happen until you have that 9/11 moment.” But by then, it will be too late.

“I struggle to see the political leadership or political systems around the world that will allow us to respond in the right way.

“I think decisions around change are much easier when you are a follower. Julia Gillard probably felt like a leader,” he says, referring to the recently introduced carbon tax.

Hidden agendas
But isn’t the UK more progressive?

McLaughlin has mixed feelings about this.

Currently, he says, the government is taking a more sceptical view of climate change.

“I talk to a lot of people around climate change and I am angered by the response. A lot of people say, we don’t think it’s true because everyone who talks about it has got vested interest.

“Then there are those who say the politicians are using it for some sort of stealth tax, and there are always those trying to convince themselves it’s not true.”

McLachan is not much impressed that we have a carbon tax.

The UK has it, why not Australia, he asks. He suspects that in Australia there are some complex politics behind the carbon tax and the abandonment of the superior cap and trade system.

Perhaps more important than the minutiae of this debate, McLachlan says, is the report from a Cambridge University economist, that said our carbon intensity is 77 grams for every unit of economic production in US dollar terms. To keep to two degrees it needs to be seven grams.

“That means almost completely decarbonising the world’s economy,” he says.

“So what we are seeing at the moment is the very tip of the iceberg of where we have to head. The reality is we won’t be meeting those goals because you don’t see the political will … but we have to.”

WSP plans
So what’s the plan of action from the WSP perspective? The company recently appointed Paul Toyne, formerly of Bovis Lend Lease, to head sustainability globally (flagged in The Fifth Estate) as part of its step-up on the sustainability agenda.

In Australia it has a new energy business, headed by Tim Parker, and a new mining company acquisition, TWP, now absorbed as TWSP, which will help pursue  sustainability objectives in the mining industry.

“The main part of the business is still environment and some health and sustainability,” he says. “But energy is a big part, particularly on the back of the carbon tax.”

On this latest visit he has been in Perth, which he describes as a very strong market.

Key now is to help those parts of the business, new and existing, to grow and work out how to connect to the rest of the world.

And, of course, to help shift the paradigm in the meantime.

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“We can’t wait for the future”