105: Sustainability in practice: In conversation with Serbjeet Kohli, Sustainability Practice Lead, Steer

The Elephant in the Room

Shownotes

What does it mean for a business to be Carbon Neutral? Did you know that the buildings businesses inhabit can sometimes have the highest impact on their carbon footprint?

When businesses set ambitions to be Net Zero, what are the steps they take to get there? Does taking positive climate action mean sacrificing growth?

According to @Serbjeet Kohli Sustainability Practice Lead at Steer a global infrastructure consulting firm - it means decoupling growth with a businesses carbon impact. It is about reducing the impact of carbon generated per dollar, per pound, per INR that a company earns. As is obvious sustainability was the focus of our conversation in this episode of The Elephant in the Room podcast.

We also spoke about 👇🏾👇🏾👇🏾

👉🏾 ESG backlash - Serbjeet Kohli’s view that ESG or however you frame it is here to stay, that our communities and key stakeholders have set the direction of travel. The backlash is to be expected considering the huge ask, a fundamental shift in how we think, and evaluate the choices we make

👉🏾 The importance of embedding equity right at the concept state on how we design our cities, urban spaces or transportation and not start thinking about it post facto. Donor and investor imperatives

👉🏾 Moving from supply side world to demand side world - taking into consideration consumer based thinking to generate more value from assets

👉🏾 Addressing the Elephant in the room - the deep lack of diversity in the industry

👉🏾 The ability to swiftly adapt and thriving in change has be to the motto of sustainability transition

👉🏾 Future opportunities from a fast evolving sustainability landscape. And it never profitability vs sustainability, it is about doing both

If you would like to listen to the podcast - head to the links in the comments

Episode Transcript

Sudha: Good morning, Serbjeet. Wonderful to have you on The Elephant in the Room Podcast today.

Serbjeet: Good morning Sudha. Lovely to be here. Thank you for having me.

Sudha: Okay, let's start with a quick introduction. So who are you and what do you do?

Serbjeet: I'm Serbjeet Kohli. I'm the sustainability practice lead at Steer Group. I've been in the business for 15 years, been in the industry for 20 years, but the sustainability role is a new role.

Serbjeet: So I'm looking to expand and establish our offer in all the markets that Steer Group operates. We are an infrastructure consulting firm who's been in this practice for over 40 years. And we supported clients, both public and private sector around the globe, essentially helping them invest in infrastructure, transport infrastructure specifically. But as we move forward in the world, the challenges that are being faced by our clients, by our economies, by our communities are getting even more complex and what we are realising is that it isn't just an infrastructure solution that can answer the questions and the challenges that are being posed on its own.

Serbjeet: We need to think more widely, more sustainably and linking up different aspects of not just transport, but transport and energy, transport and energy and finance and all these solutions require fresh thinking. So that's what really our offer is, it's to bring our existing expertise, and I'm trying to link up our capabilities with our clients requirements to solve some of the most complex challenges that our clients and communities face.

Sudha: So I understand from reading on your website and some research that 2022 was a milestone here for Steer. You became a carbon neutral organisation. What does that mean?

Serbjeet: Now it's really interesting and I think again transition is part of essentially all organisations ethos to evolve and grow and kind of, almost keep up with what the society demands of us. So I think carbon neutrality and achieving net zero by 2025 was an objective that our organisation decided that it wants to meet and achieve.

Serbjeet: And we went through quite a rigorous process of first of all, understanding what is our carbon footprint. And this was quite an extensive exercise around the globe. We went to each of our offices to understand what's our travel patterns, what's our supply chain patterns, what is our scope one, scope two, scope three emissions, as you call it. Getting it quantified to the level and converted to emission standards, using global standards. And getting it independently audited, reviewed. Almost to check that what we had done in terms of the efforts we are making, in terms of improving our supply chain carbon footprint, improving our own footprint and one of the biggest impacts we realised was our office space. The buildings that we inhabit as a business, are one of the largest impacts that we have on emissions, and our largest office in London where we moved into a new space is one of the most green building at Rushford Street, which had a huge impact.

So, as part of the calculation, we found that moving into a green sustainable building meant that our footprint reduced significantly, and that helped us achieve, essentially carbon neutrality in 2022. And it's a process we are continuing to monitor our travel, continuing to monitor our supply chains, continuing to monitor and estimate our greenhouse gas emissions. And then we're required even kind of take actions to source responsibility to travel almost more responsibly and carry out employee surveys and supplier surveys to understand that what we are estimating as our carbon footprint is independently verified. And more interestingly, I think even things like very simple, having a vegetarian day or a vegan day in the office where all colleagues come together and eat, it's also to make it the social thing, not just an obligation on the organisation, but also something fun to do. So it's not all pain as it is being painted that, achieving net zero or becoming carbon neutral is all pain, it's also a lot of fun as well.

Sudha: Yeah, it's very interesting to hear about the journey from you because the scope one, scope two, a lot of organisations are doing, but scope three they don't want to get into that because that is going to be the biggest footprint for most organisations.

Sudha: And of course it's interesting to hear that the building where your biggest office was, was the biggest culprit in this. And you've moved to a greener, more sustainable building and this has had an impact on reducing your carbon footprint. So it's very interesting to hear that, and I love this thought about the narrative around how we move forward, the narrative is about, oh, we have to make sacrifices. Oh, we have to do these things which are like very painful. So it's not all about pain, it is also about ensuring that it moves beyond, tick box to where we start embracing it as something as a part of our lives so that's a great process.

You mentioned just now that Steer has set a target to be net zero by 2025 and near zero carbon by 2030, through less than 50% offsetting. Now offsetting , it used to happen a lot I think in the nineties and two thousands and, even in the last decade.

Sudha: But slowly we are realising that offsetting probably isn't the best way to go about on this journey. But what does this entail when you say that you want to be net zero carbon by 2025, what steps does Steer have to take to get there?

Serbjeet: Really good question. And again, I think what I mentioned earlier, some of this is in our nature itself. We are heavily an organisation that has promoted sustainable choices in form of almost ensuring that majority of our travel, and I think technology and pandemic has helped us, has been on sustainable modes as much as possible. Wherever we have opportunities available, our internal policies are aligned, so it isn't just sort of a strap line on the top, which says, we will be carbon neutral. Our behaviours need to respond to that requirement. And behaviours, what we find is often the messaging that comes from the top flows all the way down to each and every employee and it kind of gets embedded in the organisation's DNA. And that's where we've always found the processes and policies that we put into place should be there to support our businesses to grow because we are not about reducing our business's impact just because we want to lose our growth trajectory.

We also want to grow in this market. So it's fundamentally about decoupling our growth with our carbon impact growth. So it's really reducing the impact of carbon generated per dollar per pound, per INR that we earn. That's fundamentally the ethos with which we work with. And within that, then there are quite simple things that you can do around, providing bike share schemes or providing incentives for people to make more sustainable choices by giving access to loans for monthly or annual passes. And I know that's kind of a trend that used to exist where people used to go in the office every week and every month, and therefore having a bulk discount on their subscription was quite a heavy ask on their paycheck, so we had schemes. We still have schemes available for providing loans for such facilities, but obviously we are now in a new world of hybrid impact. So that's where then the choices to travel even for business purposes, as business travel comes back, we are starting to kind of promote more sustainable choices in our policies, each office now has a local environmental plan in place where they are, first of all, creating a baseline of understanding what the energy consumption is, what the supply chain is, how are we making choices in terms of any shared travel that we are doing? Do we have choices available in form of let's say using zero emission vehicles for our travel if possible.

Serbjeet: So it's down to that kind of making sure at a bottom up level that this thinking of being aware of your footprint and as the business grows and as our organisation grows and starts offering more solutions to more clients. We are not falling through any of those attributes, which would result in us going backwards. We want to move forwards in terms of our growth, but backwards in terms of our carbon footprint. And that's the solution that we keep finding in all the choices, all the decisions we make. So, fundamentally, what we want to do is to keep going along that path, which has led us to carbon neutrality last year.

Serbjeet: We want to move forward with those initiatives to get to net zero and then you know go to almost sub-zero by 2030. We want to be ambitious in this space and we think we can achieve it.

Sudha: So very different from what the UK government has in mind at this point. Not ambitious at all, and probably have taken steps that are going to probably impact how countries are making their own decisions on Fossil fuel and oil and gas licenses, et cetera.

Serbjeet: I kind of take a step back almost from some of the noises you hear on a weekly basis. And if you want to kind of separate the signal from the noise, the signal is very clear and the decisions that have been taken by the voters, by the people who put governments in place are very, very clear. That messaging, I don't think is changing. As a society, as individuals, we have made that decision. I don't think that direction of travel is changing. How we get there will be different for each economy. I was in California three weeks ago and the direction of travel there is just phenomenal in terms of the amount of money that is being put in place, where the government's mouth is, and exactly the same challenges that there are elections happening in all the three biggest markets we operate in, in the US, in the UK and India next year.

Serbjeet: So the direction of travel of central government, federal government policy could evolve and change in all these geography But the messaging on the ground, at least in that part of the world in California, was very clear that this is happening irrespective of the political direction of travel because this is now embedded in their laws. And I think in some sense, California stands out in North America particularly given the amount of disruption it has faced in its own, wildfires and you know adverse weather events, extreme droughts, they've had a good rain this year, so it's very lush and green so would definitely recommend anybody to go and travel there at this point of the time. But I think the consequences of not taking action is significant and people have realised that, and I don't think that choice is changing even in an economy as India, which is committing to being net zero in 2070. I think the action on the ground is phenomenal, is what we are seeing. So I think that direction of travel is not changing, we believe that and that's a decision that people, individuals have taken.

Sudha: Agree with you on the broader line of thinking.

Sudha: So you are the sustainability practice lead at Steer. What services are you offering to clients? And are there examples of how you are thinking of integrating, the sustainability offering with whatever work, you are doing on transportation or any other area?

Serbjeet: Sure. Absolutely. And I think it's a real culmination, and we are learning as we go as well in this experience because nobody has solved this problem fully. So the key services that Steer offers is zero emission rate vehicles, and this covers electric buses, electric two-wheelers, hydrogen buses.

So anything that reduces emissions while providing mobility is where kind of our core offer is. And this goes into even looking at charging infrastructure that supports or refuelling infrastructure that supports deployment of the zero emission vehicles. Because that's the other thing we are finding these days, that it's not just the vehicles that need to be produced and procured and deployed, it's the supporting, charging infra, supporting refuelling infra that needs to come in and that's where often the crux of the problem lies, not so much in the kit that comes out of a manufacturing unit from an OEM, but it's what happens once it is out there.

Serbjeet: How does it get serviced? How does it get replaced? How does it get charged? How does it get refuelled? All of those aspects we look into, and in all of this, in all of this money matters. Who's funding it? Who's financing it? The current upfront costs of these vehicles is still significantly higher than the counterparts that are available and corresponding refuelling, recharging infrastructure doesn't quite exist even in quite advanced part of the worlds, where perhaps, let's say again, I take example of California, where Tesla is like almost what used to be the most sold car, whatever that was, Ford T 110 number is as visible as that and has a widespread charging network.

Serbjeet: Even there, the challenges are being faced in terms of when they're trying to migrate their buses and their trucks, which also have a significant GHG impact. But then when we turn this around into a world where the electric vehicle revolution in India and South Asia is moving in a very different direction where we are seeing two wheelers and three wheelers being electrified and that being electrified in masses. And that's where TCO, the total cost of ownership advantage already exists and will exist in case of buses and cars fairly soon as a manufacturing base expands and the volumes increase. So it's looking at all of this ecosystem where, our clients face challenges or we see challenges at governments or funding institutions and what is very interesting is that almost every fund, every investor who we speak to, now has a climate transition fund in place and has millions committed in participating in this transition, and we are there to help them as we have helped them in case of investments in airports and toll roads and metro projects and all other modes.

Serbjeet: We are there to help them in this climate transition activity. So that's kind of one strand of our work. We also have very interesting and economic development unit both in the form of fourth economy in North America and form of Steer economic development team. Here in the UK and they have a very clear net zero strategy offer which looks at the economic impact of these things 'cause this isn't just about technology and investment taking place, this is about communities being impacted, this is about individual livelihoods, individual skills being impacted, and then wider ecosystem, how does this net zero strategy impact on the supply chain?

Serbjeet: Because as what we touched on earlier, It's not just what you do, it's what you do in the supply chain that you exist, of the service that you're providing or the products that you're supplying that matters and it has a different impact depending on what level of carbon intensity you are offering. So both fourth economy in the US and Steer economic development in the UK have the strategic offer of net zero evaluation, both coming up with a strategy for net zero transition for local economies. But also then to look at the community impact, the skill impact and what support those communities need to enable that transition to take place.

Serbjeet: And we also then go in and look at the evaluation of how they're transitioning, what the challenges are, what can public sector agencies do to support that transition? And then the third very interesting offer that we've recently added in form of our acquisition of Amber Side Advisors is our capability in decentralised energy.

Serbjeet: So, like I said, our buildings contribute to a lot of our emissions, and what we are finding is that district energy, district cooling, district heating, decentralised energy is a big agenda on most investors and most public agencies as a way to decarbonise our carbon impact - whereby essentially replacing that whole individual old boilers or old heating equipments or old air conditioners that exist in individual homes and are quite inefficient with a centralised heating and cooling unit, which can be managed at a district level and heating and cooling and...