Simon, who has more than 15 years international business development and corporate strategy experience, is Director of Sustainable Development at Serco - a support services company with a turnover in excess of £2.5bn. His approach to sustainable development is based on a firm understanding of the drivers for business development. His role is to improve the overall sustainability of Serco's operations across 600 contracts and 40 countries and support the development of services to tackle sustainable development challenges. Simon has been a Commissioner on the UK Local Government Association's Climate Change Commission.

What are the biggest challenges you face in your role?

"Knowledge transfer and getting carbon to be a part of what we do, rather than yet another initiative or 'priority.' Individuals and teams are already under extreme pressure to deliver the day job. They are swamped with information and conflicting 'urgent' requirements. How do you make sustainability issues current and relevant?"

How do you deal with these challenges?

"The solution we are implementing is twofold. Provide advice and support as well as making carbon management a required reporting line right across our management processes. This will set the management community's 'selective attention filter' to 'carbon' and create the demand for knowledge."

What was the trigger to the introduction of Serco's carbon reduction initiatives?

"I am not sure there was a single trigger. For many of our top managers the combined timing of the Stern Report and [the documentary] An Inconvenient Truth - economic argument and emotive call to action - created an environment receptive to the challenge."

What are your proudest achievements?

"Wearing my Serco hat, what has been achieved, including some exceptional case studies, has been achieved by others. My role is to support them. In my role on the Local Government Association's Climate Change Commission I hope that I provided strategic challenge and knowledge of the opportunity for engaging the innovation capacity of the private sector in achieving public sector goals."

What are the biggest environmental challenges service management companies such as Serco face?

"Ownership. Invariably we do not own assets and in many cases we do not own the utility cost. Getting two, three or even four organisations to recognise and own the problem can be a challenge!

"Our operations cover just about every form of service provision from rail to local authority leisure centres, from national science establishments to government advice services. This variety creates its own challenges when trying to stimulate action on a topic like carbon reduction."

What have been the most successful Serco low carbon initiatives and what have been the keys to their success?

"There have been lots, particularly relating to our local government operations. Probably the easiest to talk about is the 30% carbon reduction our Leisure Centre business achieved in 18 months.

"Absolutely key to this were four things: the commitment of the MD, who made each centre manager report performance to him weekly; the creation of additional capacity, in the form of an energy management expert in the central management team to support knowledge transfer and help the MD know where to target his attention; the creation of transparency: detailed data captured daily and analysed to create management information, which enabled performance management and became the basis for competition between managers and teams; and finally, engaging all staff and our client base in the challenge."

How are you ensuring clients take carbon reduction seriously?

"Our business is not carbon reduction, it is improving services. We can share our experience with our customers and increasingly we are finding customers who want to take carbon reduction seriously. Our challenge is to lead where we have control and be capable of supporting where clients have recognised the agenda."

What emerging trends do you predict?

"We are seeing huge investment in clean technology to substitute our current high carbon lifestyle options. However, I believe the most important developments we will see are those that enable behaviour change, such as smart metering and carbon labelling, to enable all of us to understand the impact of the decisions we take."

What would you advise someone taking on your role?

"Get the balance right. Lead but don't own. Yes, you need quick wins to get attention, but the prize is medium to long term. How do you get the whole organisation to own the problem and be part of the solution, not to outsource the problem and their conscience?"

What's next?

"Serco is entering an embedding phase. It has taken 18 months to get here and will take another 18 months before we can claim to have put sustainable development at the heart of our business. The thought leadership challenge has been completed. This strategic project needs to become 'business as usual' and I need to re-focus my attention on the next strategic challenge… there is no shortage of those!"

Best Practice Tips

Please visit the Forum here and share a tip that you have for organisations to reduce their carbon emissions. Often the very simplest ideas can have the greatest effect:

• "Review your program from time to time and adjust it to fit your changing circumstances."
  - Ken Young, Environmental Officer, St James's Place

• "Don't forget to factor in anything you'll need to do to adapt to climate change. In addition to being risk aware, there will be additional costs - from extra grass cutting due to the warmer winters to tackling major incidents such as floods, or storm surges. Be prepared!"
  - Jackie Young, Sustainable Development Co-ordinator, Plymouth City Council

The Hunt For Carbon: Links In The Chain

In December 2007, we received a useful reminder that complacency about carbon reduction must be avoided. The publication of a research paper called ‘Too Good To Be True: The UK’s Climate Change Record’, presented compelling evidence that our progress with reducing greenhouse gas emissions was a good deal worse than many supposed.

The research, overseen by Dieter Helm, a Professor of New College, Oxford University, and Chairman of the Academic Panel, Department of Environment, Food and Rural Affairs, showed how estimates of emissions within UK borders give only a partial view of the UK’s contribution to global greenhouse gases.

“To understand the UK’s true impact, the greenhouse gas accounts should be reported on a ‘consumption basis’. On this basis, all greenhouse gases embodied in UK consumption are counted, and by adding greenhouse gases embedded in imports and subtracting greenhouse gases embedded in exports, the crude calculations presented here suggest that UK emissions have been rising steeply. Between 1990 and 2003 the crude calculation indicates a rise of 19%,” it concludes. Putting it simply, previous estimates had neglected the supply chains of UK plc.

A supply chain for every product and service In a valuable guide to these issues

‘Carbon Footprints In The Supply Chain: The Next Step For Business’, the Carbon Trust points out that supply chain emissions are a key part of calculating the true cost of economic activities. “At the economy-wide level, it is possible to take every emissions source and allocate it to the supply chain of a different product or service. The end result is to show that all the emissions generated in an economy exist to deliver products and services to meet the needs of the end consumer,” says the Carbon Trust.

There are obvious business benefits to be had from improved knowledge of supply chains. In the longer run it will help companies to make better informed decisions in product development, manufacturing, purchasing, and distribution if they know the costs and liabilities that exist whenever carbon emissions are generated.

Supply chains are often complex, crossing national boundaries, and with many different owners en route. Such complexity can make the task of carbon reduction seem daunting, but useful guidance is available from the Carbon Trust. Broadly the process falls into several key stages: the scope of the exercise needs to agreed with key participants; data collected for each part of the chain; opportunities for reduction prioritised; and an action plan drawn up.

Lighter footprints can mean lower costs

In the near term, companies are well-advised to start work on supply chain analysis because they face increases in direct energy costs and the energy costs of suppliers. The benefits of doing so have been demonstrated by the snack producer Walkers, and its parent company Pepsico. Working in partnership with the Carbon Trust, the companies identified potential savings of up to 9,200 tonnes carbon dioxide and £1.2 million per annum.

Walkers’ supply chain analysis revealed costs that might otherwise have remained hidden. Its suppliers typically store potatoes in an environment where temperature and humidity are controlled to prevent them drying out, so losing weight and thus value. But keeping humidity high costs energy, and although a high water content is good for supplier revenues, it is bad for potato crisps and so Walkers incurred energy costs in removing it. The company says it is now working with suppliers to iron out such anomalies.

Expect the unexpected

The source of energy, as distinct from its use, may also have a significant impact on supply chain emissions, as has been illustrated by a project run by newspaper publisher Trinity Mirror, also in partnership with the Carbon Trust. The publisher found that emissions from its own operations are hugely outweighed by those of its supply chain, which contributes around 80% of the total footprint.

Paper manufacturing is the most energy intensive part, accounting for more than 70% of the total energy use. Trinity Mirror’s environmental policies mean that it purchases 100% recycled paper from manufacturers in the UK, and on the face of it this appears the cleanest option, because the paper is recycled, the manufacturing plants are well run and efficient and based in the UK.

However, Trinity Mirror discovered that using 100% recycled paper from the UK produced 174g of carbon dioxide per newspaper, compared with Swedish 50% recycled paper, which produced just 95g. Why the difference? The answer is to be found in the different energy sources of grid electricity in the two countries: the UK grid relies heavily on coal and gas, while Sweden’s supply comes mainly from hydro-electric and nuclear power.

A positive approach to problems

But reducing energy costs aren’t the only benefits. In future, we face legislation which penalises high energy consumption and rewards emissions reductions, plus changing consumer attitudes to climate change.

In practice, some companies are likely to run into difficulties, some of which were identified by the Carbon Disclosure Project as part of its 2007 report on UK FTSE 350 companies. Some companies expressed concern that squeezing emissions from supply chains would be more a cost than a benefit. Some retailers expressed doubts about the strength of public concern about climate change, or suggested a lack of consensus about how to proceed among those citizens who are concerned.

Participants are also understandably territorial about their part of the supply chain. Previously, they may never have been asked for the data needed to build the footprint and may be cautious about the impact on their own business of giving up such information. Effective communication is essential to overcome this: they need to clearly understand what data is needed and why, and how it will be handled.

“You need to take a positive approach to supporting your supply chain,” suggests Mike Barry, Sustainable Development Manager at Marks & Spencer. “An open collaborative approach is probably best, possibly by setting up a portal where suppliers can access support and guidance, and exchange information,” he says.

“It’s important not to be overly prescriptive. Let those guys at the coalface do what they have to. Instead of being too prescriptive consider an enabling role, rewarding good performers,” he suggests.