Speaking to edie following the release of Interserve’s annual sustainability report update last week, Haywood said that the UK Government’s commitment to ban new petrol and diesel vehicles by 2040 will help to position low-carbon technology and innovation at the forefront of business mindsets.

Haywood applauded the role that regulation has been playing in driving the uptake of new and more sustainable technologies, which is one of the key pillars for the Government’s industrial strategy. However, he noted that companies would have to start accounting for wider natural, environmental and social benefits of new innovations.

“We’re already seeing a little trickle become a flood of technological advances,” Haywood said. “But businesses aren’t particularly well-blessed with ways of assessing non-financial outputs and outcomes.

“The impact of a service or innovation might not appear this year, it might not make an appearance on your profit and loss statement, but it might, nevertheless, be extremely valuable.”

Haywood’s interest in the Government phase-out of diesel vehicles is built on the fact that the majority of Interserve’s emissions derive from fuel consumption from vehicle fleets and energy generation on construction sites. According to the firm’s recent sustainability update, Interserve recorded a 5% reduction in carbon emissions from business travel in 2016.

As electric vehicles (EVs) are still becoming a commercially-viable option, Interserve has so far been deploying newer diesel vans and cars that comply with ‘Euro VI’ emissions standards to help reduce carbon. Looking ahead, the construction company will be using telematics-based smart phone apps to raise awareness of fuel usage among its fleet drivers, Haywood said.

Avoiding ‘green bling’

Haywood’s relatively unique role combining sustainability and finance means he is rarely blinded by what he refers to as “green bling” – sustainability solutions that are purchsed and deployed by businesses based purely on the positive CSR stories they can help to tell. Haywood looks at any potential investment through a “financial-sustainability” lens so as to ensure they are completely economically viable, even if the benefits of such investments aren’t likely to appear on spreadsheets.

“It would be straight out of the financial director’s playbook for me to say that we put everything through a ‘business case’ test and that, unless it has an ROI of 20% and payback of three years in financial terms, then we’re not going to do it,” Haywood said. “But, that would completely miss the point of what good sustainable innovation looks like.

“Finance prevents us from going off on flights of fancy and investing in ‘green bling’ just so that it ticks a box. It requires us to think innovatively about how we assess innovation. A big chunk of our plan has been to capture non-financial impacts through a multi-capital model of assessing things which enables us to look at projects and try to measure the natural capital and the social capital effects.”

One example of Interserve the assessing the viability of projects based on both financial and sustainability metrics was the company’s decision to exit from large energy-from-waste contracts last year. The FTSE-250 company’s share price soared following its proposals to stop building plants that generate energy from ‘green bin’ residual waste, with one Scottish gasification project reportedly landing the company a £70m charge on a £146m contract.

Ingenuity House

More recently, the firm’s multi-million-pound development of its regional headquarters in Birmingham has seen low-carbon technology prioritised in order to deliver significant emissions savings whilst avoiding that any “green bling”. Due to open in 2018, the new Ingenuity House offices will bring 1,200 employees, previously spread across four offices in the region, into one low-carbon, resource-efficient facility – a move which Haywood says is much more cost-effective than housing those staff members in several less efficient buildings. 

Indeed, the Ingenuity House project is expected to achieve a BREEAM Excellent rating. Building Information Modelling (BIM) was used to plan the building, with 3D technology enabling Haywood and his team to examine the benefits of efficient design and operation in the construction phase of the project.

“Financial sustainability is one of the planks that projects must reach and some technologies are not right in our circumstances,” Haywood concluded. “Its not the same as demanding a payback in a fixed time period, but some technologies are too ‘out there’ and ultimately too inefficient. Our investment is selective and assess all periods, all capitals and efficiencies that come out of it.”

Matt Mace

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