This story features in Unearthed: Digital Transformation
Dr Mark Wade worked for Royal Dutch/Shell for more than 30 years. He is renowned for the work he did in spearheading the sustainable movement across Shell, establishing a template that would inspire hundreds of companies across the globe.
He’s been involved in all sides of the sustainability mission, from the hardwired elements of governance, processes and reporting to the more human considerations of mindset, change and culture. We asked him how businesses can maintain the impetus on sustainability, and the challenges – and opportunities – it could bring to the civil engineering and environmental sectors.
Tell us about yourself
“I’m a scientist with a background in biochemistry. I have 30 years’ experience in a variety of roles with Royal Dutch/Shell, including being a founder member of the sustainable development group in the corporate centre way back in 1997. We pioneered sustainability reporting and the integration of sustainability across the group.
So how do you define sustainability?
“I still believe the best starting point is the 1987 Brundtland Report that says it’s about ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’
“So as a company that means being responsible in the use of resources and in your behaviours with regards to the environment, to the societies in which you operate both locally and globally, and, of course, to the wider economic contribution and fairness that one brings to one’s operations.
“We took that fundamental definition and extended it to ask what is the role of business in society, in terms of the three dimensions of sustainability – the economic, the social and the environmental. How do you integrate these three things without trading them off? How do you treat them as equal considerations in the way you take account of them in your strategy and operations, the markets, and communities you serve? We concluded that this can only come in an authentic way through the individual mindsets and behaviours of the people within your company, and therefore collectively to the culture of the company itself.”
Some companies just get it, others seem to struggle?
“Yes, there is a huge spectrum of attitudes. There are companies who do it really well and authentically, and have driven it into their core purpose.
Then there are those who are either in denial about the need for sustainability or who simply don’t care. Let’s be honest, there are a lot of companies able to make a huge amount of money in the short term without caring at all, and are therefore off that spectrum altogether.
“But thankfully there are an increasing number of companies – Unilever would be an outstanding example – that really does believe this is fundamental to their strategy. They understand where the world is going, what the needs are for a sustainable world and how they can provide sustainable solutions.”
What helps a business get it right?
“It’s not just about a CEO saying ‘we need to do these things’ or making a comforting statement to the market. It must be embedded in the culture. Everybody in the organisation must be on board with it and live it in all that they do.
“In my experience you need to get the hardwiring right – the governance, the systems, processes, standards, policies, KPIs, reporting, verification…all the stuff that you can write down. That’s an important backbone. But ultimately, it’s useless unless you combine it in equal measure with the soft-wiring – helping people develop the ‘will, thrill, skill’ of sustainability as a value and mindset.”
Is this something you learned at Shell?
“Yes. We were getting a lot of compliance to begin with, but we weren’t really getting a step change in behaviour, which is when I realised that you can’t just say: ‘do these things’. You have to give people a deeper motivation, so they understand why it’s important to themselves, their jobs and to the organisation.”
You’ve said this is no longer an area where companies can keep their heads below the parapet?
“In today’s highly connected, globalised, and internet-driven society, companies have to wake up to the fact that it’s a ‘no hiding-place world.’ Their behaviours need to keep pace with society’s changing expectations of what responsible behaviour really represents, or risk the consequences.
Companies need to address a world with climate change, constrained resources, increasing digital connectivity, growing competition and ever-increasing expectations on the role of business in society.”
These are not abstract concepts but daily realities of strategic importance and operational impact.
“Climate change and the unsustainable use of resources is the meta context in which we’re all operating”
Climate change is an accelerant of instability. We see this through increasing weather extremes producing floods and droughts, hurricanes, and tidal surges, exacerbated by sea rise. Disasters are occurring on an increasingly regular basis, which in turn is leading to displacement, migration, and social instability. Competition for natural resources, which is happening anyway, is further driven by disasters as people struggle to find reliable sources of water, food, and energy.
Business of all sorts operate in an increasingly volatile world – volatile markets, political and social systems. With this comes uncertainty and lack of confidence, a challenge for companies to grasp and plan for.
Having said this – this world is also one of huge opportunity for those that can anticipate future needs and be, the provider of solutions to local and global needs.
How do you mean?
“Well an example would be the way that companies are now very seriously looking at climate change as an influence on markets and their supply chains. The degree of uncertainty and the financial loss that can occur through weather extremes is very definitely keeping CEOs awake at night.
“They are asking ‘are we going to have access to the resources we require to extract or make the things we want to? How are we going to adapt to all of this; how are we going to innovate to grasp the opportunities presented by the need for sustainable solutions?”
“Take the UK retailer Marks & Spencer. They are now future-proofing their entire value chain – including their own operations, suppliers and now the basic activities of the use of their products by their customers. They recognise that the climate is already changing, and their business needs to be able to cope with extreme weather events. Planning is key to minimising the threats and maximising the opportunities created by evolving climate impacts.
They are working with their supply chain to understand the impact of climate change on the provision of goods and addressing issues of energy, water, and waste efficiency. They are looking at this in terms of avoidance, substitution or compensation measures.”
“Having painted something of a black picture, there are, in fact, huge opportunities within this world for those companies that can anticipate future needs and be, and be seen as, providers of the solutions, both at local and global levels.
How do you see that strategic intent relating to the civil engineering sector?
“Engineering companies may find it more difficult to get investment because of volatility and uncertainty. The social and political uncertainties will make it more difficult to plan and implement projects, such as boring a tunnel between two countries, or putting in infrastructure that governs shared water resources.
“But on the other hand, what fabulous opportunities there are here too! It will be the civil engineering companies who’ll provide the mitigating and adapting infrastructure, whether it’s sea wall defences, preventing saltwater incursion into aquifers, or energyproofing buildings etc.
“They are the ones right at the forefront of being the solution providers. Digital transformation – which I know is an area where Leapfrog Works comes in – helps address the increasing uncertainty and complexity companies are dealing with.
“If data can be turned into information that mitigates uncertainty by providing clarity, then that builds confidence, which creates a much better platform for companies to move forward on. It also provides a ‘shared reality’ with stakeholders, from investors to engineers through to local communities, that can be used factually in decision-making.”
Where does digital transformation fit into the quest for sustainability?
“Those companies that can navigate through uncertainty, instability and complexity, and can innovate with the insights that digital transformation brings them, are the ones that are going to be most successful.
“And for civil engineering, I think it holds one particular extra advantage – that of visualisation. “Many of these projects cut a lot of ground and make a lot of mess; it’s difficult for people to envisage the benefits during planning. But if you can visualise the surface effects, what’s happening subsurface and see the connectivity between the two as well as what it’s going to look like afterwards, then that brings a degree of clarity and objectivity that has never been possible before. People do respond to pictures in technology after all, and it’s helpful to have a ‘single truth’ when you’re trying to engage with multiple stakeholders.
“It’s not just the technical modelling of extraction or new infrastructure, it’s how to communicate that ‘single truth’ and its relevance to key stakeholders, which will provide the basis for rational decision-making.”
Where have you seen that happening in the civil engineering and environmental sectors?
Anglian Water in the UK is a good example. What impressed me was how deeply their conviction ran.
It is about doing the responsible things but equally it is about saving money, water and energy and building resilience into the business model. These are the elements they try to think about whenever they do anything.
“One of the most straightforward examples would be when they dig a trench to lay a pipe in. They have developed a software platform, based on real life cases, that will model the most efficient ways of doing it so they don’t move one single bucket of soil more than they have to. Right the way through, from the investors to the guy on the ground with the digger, they are thinking how to save energy and costs and contribute to their carbon reduction targets.
“That’s the sort of granularity that the companies can embrace with the right mindset and the right digital tools.”
How have you seen corporate attitudes towards sustainability change?
Now there is a much greater understanding of what sustainability is all about. Increasingly, the debate is not about ‘how do we give something back’ or applying corporate social responsibility as a PR sticking plaster. The conversations now focusses on why it is core to what we do and how we do it.
“One of the things that we faced in the late 1990s, when we were intellectualising what sustainability meant to Shell, was the real challenge of balancing short-term priorities with longer-term strategic needs. It is still the issue today and it takes a new quality of leadership to empower people to think and act in a different way.
“We’re actually going to plan a lot longer than that to optimise the net benefit over a longer period, even though that might mean more investment right now.
“It requires very senior leadership to empower, to permit and to support longer-term thinking. It’s not something a middle manager can do alone when they are driven by quarterly returns and short term KPIs. That’s not an enabling environment.”
Dr Mark Wade