IAN ROBINSON
It is now over five years since the Rio Summit. During these five years we have seen the phrase ‘Sustainable Development’ used more and more.
From its economic origins in the work of the Club of Rome, who looked at how quickly resources such as oil and gas might be exhausted, it grew to encompass environmental issues in the ‘green eighties’. Then, from the evidence given to the UN Commission led by Gro Brundtland social needs were brought firmly into the frame. So in Rio, the ‘triangle’ came into being - tackling the important challenge of moving economic development forward, without compromising the availability of resources for the future generations and at the same time protecting environment and cultural heritage. But the road from Rio has not been an easy one, for either Governments or for business. The task of developing policies to implement the commitments has not been easy. The UK Sustainable Development Strategy highlighted the issues and began to point the way forward. Business struggled with the task of finding definitions of sustainable development which matched business needs, met the requirements of customers for competitive goods and at the same time meeting the increasing desires of environmental pressure groups. Five years on, and with the first follow up in New York complete, Government are poised to revise the Strategy. What have businesses like ScottishPower learned and how can these lessons contribute, helping others, particularly small businesses, to follow? And what about social exclusion? How can the economic resource, excluded from full participation by unemployment and poverty be brought back into full participation in society.
Image - Cruachan Hydropower Station
My Company, ScottishPower, has grown in the period since Rio from being a Scottish electricity company, generating, distributing and supplying electricity to captive customers in Scotland to become a UK wide multi-utility covering electricity, water and waste water services, gas, telecommunications, electrical retailing and contracting services. We have expanded by growing businesses such as telecommunications and retail and by the acquisition of the electricity company Manweb and the water company Southern Water. During this growth we did not compromise our environmental record. We made significant improvements across the business, winning major environmental awards and scoring highly in surveys of environmental commitment such as that run by Business in the Environment and the Financial Times.
ScottishPower’s business is at the very heart of sustainable development. Energy and Water Services are vital to the well being of society. Fuel poverty and social exclusion bring misery, so energy must be affordable. Clean drinking water and effective waste water treatment are vital to public health, but massive capital spending is needed to upgrade an infrastructure built in the Victorian era. The public are rightly demanding cleaner air and cleaner seas and the potential for global climate change is focusing all of our minds on the need to reduce the use of carbon based fuels. Our activities in ScottishPower take us into all quarters of society. The problems of social exclusion brought about by unemployment and poverty confront us daily. ScottishPower is a major employer and the welfare and development of all of our people is vital to our success.
This has brought home firmly to me that Sustainable Development is about much more than reducing emissions, adopting cleaner processes and reducing waste. As we move out of the nineties and into a new century, with the tough challenges of the Climate Change commitments of the Kyoto Protocol before us, business needs a clear vision of sustainable development. The definitions provided by Gro Brundtland’s Commission and developed by others are useful, but they are difficult for many to translate into business strategy. Too many focus on ‘green issues’ and ignore the importance that the Rio Declaration placed on social and cultural development and above all the needs for economic development. The balance of environmental protection, social equity and economic development needs to be translated into clear plans of action which all can appreciate. That is a task we have begun in ScottishPower and one which has taken on more meaning for me since I became involved with the Welfare to Work Programme.
To help us focus on the way towards sustainable development and to better understand the balances involved, we have worked to translate the three aims of sustainable development into simple to understand hierarchies. It is easier to recognise ‘the more sustainable’ from ‘the less sustainable’ than it is to find ideal solutions - even if we could move to them overnight. For instance all energy supplied from unobtrusive renewable sources such as solar panels would without doubt be highly sustainable, but few would argue it could be achieved technically or economically in the short term. The task is therefore not to simply identify the ideal and put it off until it becomes economic, but to identify progressively more sustainable projects and to move up that hierarchy at every opportunity. This is a pragmatic and practical way of building not only a sustainable business, but also a successful one. In the following paragraphs I will describe a simple hierarchy for energy and how across our multi-utility activities we are making just such steps. We have carried out similar exercises for the remaining parts of our business and targeted such actions in those areas also.
A simple sustainable development hierarchy for energy might look like this:
Energy Saving
Energy Efficiency
Renewable Energy
Waste to Energy
Gas in a Combined Heat and Power Plant
Gas in a Combined Cycle Gas Turbine
Gas burned in simple Open Cycle
Clean Coal
Old Coal
Nuclear
Many might argue about the placing of options in the hierarchy, for instance should nuclear be placed near renewables since its emissions of carbon dioxide are low, or at the bottom because of fears of nuclear accident or long term waste disposal problems? Is coal more sustainable than gas because it is a low grade fuel, abundant in this country? These are legitimate questions, but they do not detract from the general message that a successful Company who is addressing the issue should have good cluster of projects moving from bottom to top. Our approach to sustainable development, and the fact that we have activities in all aspects of generation, distribution and supply help us to identify sustainable solutions which yield business benefit.
Image - Longannet Power Station is developing clean coal technology
Wasting energy uses up precious resources and results in unnecessary emissions. It also costs our customers money they can often ill afford. Energy saving advice is therefore made available to all our customers. A customer who receives good advice is a loyal customer, so far from damaging our business such activities will help to retain customers in an increasingly competitive market.
Fuel poverty is one of the major social issues in Scotland. ScottishPower have been working on an Energy Initiative with Glasgow Council to deliver improvements to the housing stock which will yield energy savings, provide better living conditions and lower energy costs to the tenants. We are also currently launching a pilot scheme to help cut fuel costs for poor families. The scheme involves making customers’ homes more energy efficient, organising a full "benefits check", offering a competitively priced energy package and agreeing a level of payment which the customer commits to and adheres to. We are also looking at a ‘Power with Rent’ scheme and ‘Fuel Credit Union’ to help low income and fuel poor families get some benefit from competition. The social dimension of sustainable development goes hand in hand with environmental protection through energy saving in initiatives such as these.
Customers wish the services energy can provide -not the energy itself. Providing advice and services which enable customers to use energy efficiently and wisely help build their business and secure them as customers in an increasingly competitive market. Initiatives such as Powersave, by which we help to fund energy efficient equipment, sharing the savings with the customer represent good business as well as improving sustainability. Building businesses creates badly needed employment and so all gain.
Many of our customers wish to make a difference to the state of the environment and would like to see the development of renewable energy moving ahead more rapidly. But renewable energy is generally more expensive than the fossil fired alternatives and so new projects require Government support. ScottishPower would like to develop more renewables and have much expertise, but support is limited. Bringing our skills and this customer demand together - in the form of a ‘green tariff’ which promises to invest the small premium these customers are willing to pay in new renewables, will enable us to invest in plant which would otherwise not have been economic. The environment benefits and our customers’ desires are met.
"Sustainable Development is about much more than reducing emissions, adopting cleaner processes and reducing waste. "
Other problems span several sectors of industry, and our skills in water and energy can help us to deliver well crafted solutions. The cessation of sewage sludge dumping at sea at the end of 1998 will do much to improve the amenity of our tourist beaches, but will give rise to the need to dispose of large quantities of sludge. Land-filling is possible, but is expensive and can give rise to methane emissions which would contribute to global climate change. Land spreading is also possible, but is giving rise to public concerns. The sludge has chemical characteristics not unlike a low grade coal. If the sludge is dried and granulised it will burn in a conventional power station. Any pathogens which were not destroyed by the drying process would be subject to temperatures far higher than in conventional incineration - and unlike incineration useful energy is released which is turned into electricity. This solution also reduces the emissions of carbon dioxide by displacing some of the coal burn. This kind of solution offers benefits for the environment and holds down the cost of waste water treatment. It is the kind of sustainable solution that a multi utility like ScottishPower is uniquely placed to provide.
Combined heat and power is an effective way of providing the steam and energy needs of many larger customers, but they often lack the technical expertise to run such plant, or do not wish to be exposed to the financial risk of varying electricity prices. Again bringing customer service expertise together with technological expertise yields for us a more sustainable solution which also makes good business sense.
There is much debate surrounding the respective roles that coal and gas should play. Gas is low on emissions and the capital costs of new gas plant is relatively low. Until renewables and energy saving fill the gap, gas will be the economic way to replace end of life coal stations. But gas is a prime energy resource, and the UK has limited domestic supplies. Existing coal fired power stations, still in the middle of their useful life, have residual economic worth and can generate electricity cheaply. They provide employment in mining areas - often major unemployment black spots -and will in the future lessen potential dependence on gas imports. Scottish coal is low in sulphur so its use currently helps reduce acid rain damage. At our Longannet Power station we have identified cost effective techniques for the reduction of the acid rain forming gases, sulphur dioxide and oxides of nitrogen. The innovative techniques selected will enable coal to remain competitive and provide mining employment. In particular, the nitrogen oxide reduction technique, gas reburn was granted funding by the EU clean coal programme, THERMIE. Gas reburn has high export potential, providing European employment and environmental benefits world-wide. In this project, the social, environmental and economic benefits all come together to yield a more sustainable solution to the very real problem of meeting bulk energy needs over the next few decades until renewable capacity can grow.
As will be clear from the above examples, sustainable solutions, based on our multi-utility expertise and focus on real customer needs, in most cases yield real social benefits as well as environmental and economic benefits. But the role of major companies goes much further. The trust of the communities in which we operate is vital to our business.
ScottishPower believes in lifelong learning and recognises that it has a key role in encouraging its employees to develop their skills and knowledge. We value learning and recognise and reward staff who pursue learning opportunities. Our strategies are designed to create an organisational learning climate that not only links learning to organisational goals but also supports the non-vocational learning that helps to deliver personal development plans and improves longer term employability. We believe that the long term health and prosperity of our organisation depends upon its ability to respond appropriately to changes in the external environment and that an organisation skilled in planning and managing its own learning will develop the competencies, motivation and determination to meet the challenge of change. These are values I very much support in my role as Chairman of the Welfare to Work Programme in Scotland.
In practice, our support for learning is demonstrated by our investment in open learning centres. The Company now manages 46 centres across its UK operations, the centres provide vocational and non-vocational learning opportunities and skilled staff to support learners throughout the period of their learning programmes. We also provide time off for study, payment of fees and support for the purchase of books and other learning materials.
We also recognise that learning is essential to strong, sustainable economic health and an inclusive society. We believe that as a major company we should support the communities in which we operate and that in those communities learning contributes to social cohesion and fosters a sense of belonging, responsibility and identity and ScottishPower therefore strongly supports Welfare to Work. In a similar way to business organisations, communities can build the capacity to respond to change by developing their ability to learn.
ScottishPower Learning, which manages the promotion, support and delivery of learning through the Company’s open learning centres, is also responsible for working in our communities to provide learning opportunities mainly for the socially and economically deprived and those who have learning disabilities. Our strategy has been to collaborate with organisations that have similar objectives to our own and we have now developed a series of alliances with organisations that include Local Enterprise Companies, Education Authorities, organisations that support people with learning disabilities, child care organisations and schools. Through these alliances we are delivering a range of learning opportunities, a few of which are described below.
Learning programmes for the young unemployed who live in socially and economically deprived areas. These programmes include the development of craft skills, business administration skills and computer skills. Each programme includes work experience in ScottishPower and leads to a vocational qualification. Over 300 young people are benefiting from these programmes.
More than 150 young people have benefited from ScottishPower Learning’s partnership with the Prince’s Trust Volunteers. Our programme provides young people who have "dropped out" with the opportunity to develop core skills and the confidence and motivation to look for work or further opportunities to learn.
We recognise that our "in-house" learning centres can only offer limited support to communities and we are now using our expertise and resources to help to develop, with other organisations, learning centres in the community and in schools. We have opened two community learning centres in Scotland, one in Kirkintilloch and one in Alloa and have plans to open a further three in 1998/99. Through these centres we are supporting the Government’s "IT for All" programme.
In Scotland we are providing support for those with profound learning disabilities through the use of Outward Bound courses designed to develop social skills and self confidence. In collaboration with the Glasgow Mental Health Trust we have developed learning facilities for the rehabilitation of those recovering from mental illness.
In schools we are providing assistance for young people who are making the transition from education to employment through training in core skills and work experience. We also support technology education for primary school children and in collaboration with the Community Safety Centre we are raising safety awareness in the 10-14 year school population across the west of Scotland.
Our learning policy in the community is to provide pump priming resources to get projects started whilst ensuring that appropriate additional help is given to ensure that the solutions are sustainable over time.
All of these initiatives and others bring real benefit to ScottishPower’s business in terms of customer loyalty, to our staff whose experience is enriched and to the communities that gain self confidence and independence. Our two initiatives for the young unemployed, via Welfare to Work, have helped 80 young people into jobs and over 20 others into further education or training.
In conclusion, sustainable development is not initially an easy concept for business to grasp - but that does not mean it should be left to others to take a lead, or to Government to bring about through legislation. The values and vision of a sound business will not differ greatly from those of sustainable development. The task is simply to recognise where practical steps can be taken. ScottishPower have made achievements and have much more to do. The first steps are always the most difficult. Now that we have begun the way ahead is that bit clearer. Some may think that sustainable development, and support for Welfare to Work are for large Companies only. This is far from the truth. Businesses of all sizes can and already are benefiting. I hope many other Scottish businesses who are not already on this path will join us.
Ian Robinson is Chief Executive,
ScottishPower and Chairman of the New Deal Advisory Task Force for Scotland.
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