Q&A with BT CSO Niall Dunne: Keys to sustainability success
Q&A with BT CSO Niall Dunne: Keys to sustainability success
In this Q&A, Niall Dunne, chief sustainability officer at BT and a guest editor at BusinessGreen, explains how a C-level sustainability post can help firms drive systemic green change. Dunne joined BT, the large communications services company in the UK, in July.
James Murray: How does a chief sustainability officer differ from a sustainability manager? Is there more to it than a different job title?
Niall Dunne: The first aspect is that the nature of a C-level role implies board level responsibility and accountability, which shows that sustainability is an issue the business is really serious about. Specifically, within BT it means the budget we set aside for sustainability - which over the last few years has always been greater than one per cent of pre-tax profits - is in the hands of a sub Board level committee who work with the CSO to ensure our projects are invested in a way that is connected to the core of our business and supports our mission to be a sustainable business leader.
To answer your question, the CSO title implies you have senior level traction and buy in. It implies that you have the budget and resources at your disposal to make a difference, because often one of the most of frustrating things in this space is you can have a great ideology, but if you do not have the resources behind you to make a difference you will struggle.
There still aren't that many CSOs in place at UK firms. Do you think having the role in place makes a real difference to an organisation's wider sustainability performance?
Accenture did a great piece of work on this recently that said this is such an important agenda it should sit with the CEO. I'd agree with them, but when you get down to practicalities most CEOs don't have budget. They don't have a transformational budget. They can certainly influence and they own the strategy of the organisation. But this is a transformational role and when you need to specifically think about resource utilisation, and the innovation pipeline, and the people agenda, and how that all fits together, having someone who is directly responsible for that and the transformational plan to drive change through the business is a huge advantage. The CEO will have a myriad of other responsibilities, but the CSO has evolved from being an operational back office activity to being a transformation head within the business.
Why do you think more businesses do not have CSO roles in place?
It varies by industry. In any fast changing sector you will have businesses that see the opportunities and get that sustainability is about building business models for the long term, but unfortunately they are often the exceptions. When you look at peak oil and how we need every tonne of carbon we emit by 2030 to deliver five times the level of economic value, we all know the ability to do more with less and prosper in the next great industrial revolution will define the winners and loser over the next two decades. But if this was easy everyone would do it. You can write down how to run a four minute mile, but that does not mean everyone can do it.
Ideologically, most business get it. They understand that a much more holistic view of how you run your business than just focusing on quarterly returns is more effective, they understand that a broader view of stakeholder value is a better way to see risk and opportunity. But the challenge is that you need to change business while it is in flight. It is the challenge of how do you change the engine while the race car is moving.
How do you achieve that? What can a CSO do practically to drive change?
The first aspect is you need a unifying ideology the whole business can get behind. You need to make sure there is a higher purpose that everyone can relate to, from the guy who drives your vans to the guy who is up to his nose in a bundle of wires in some innovation facility. Having a higher purpose people can relate to allows them to look to the bigger picture and understand how the entire organisation is capable of driving systemic change.
The second thing is you need to build flexibility into how you engage with the entire organisation. You need to find ways in for different people. So you might have a finance department that is obsessed with cost transformation - that will be very familiar to many people - so the question is how do engage with that agenda? Companies might have already looked at their capex and opex, but sustainability gives you different lenses through which to look at costs. It allows you to ask "what is our exposure to spiralling resource costs in the medium and long term, how can we build a business model that ring fences or mitigates that risk?" If you can frame the cost agenda with those arguments you can get the route in to the finance department, which is typically very effective at driving change.
ICT companies such as BT have played a pretty visible role in driving sustainability up the corporate agenda. Why do you think the technology sector has embraced these ideas?
It's the upside. It's the fact that when you talk to the world's largest fast moving consumer goods and retail companies and ask them what their biggest business challenges are, particularly in emerging markets, what we're hearing is the models we are running for demand and supply globally are coming up against barriers. The current model for growth is not capable of scaling up. It's not working now with seven billion people on the planet, and it's not going to work with eight, nine, 10 billion people.
The systemic changes that are needed won't be delivered through analogue systems that don't connect together, they will be delivered by networks that will ultimately resolve imbalances between demand and supply, irradicate inefficiencies in supply chains, and also create a much more conscientious and collaborative demand model for consumers. That kind of ecosystem needs ICT companies likes BT to innovate and deliver the kind of change that will allow those models to flourish.
At a practical level I assume that means the roll out of more smart technologies?
Absolutely - and the beauty of these systems is everything happens at the backend. Look at things like smart traffic management systems where automotive brands are building sat nav systems that have smart analytics built in. They mean that if you are driving on the M1 and you get a feed in from any number of WLAN channels that tells you there is an accident ahead then the system can reroute you instantly. We don't have the stats on that, but we're looking at what it could save in terms of fuel and carbon and we would anticipated that it's in the order of billions of litres of diesel and petrol over the course of a year, just through smart traffic management alone. That's a carbon story, but it's also a user satisfaction story, and a quality of life story as well.
So the definition of green IT is moving away from simply being about energy efficiency?
It's moved out of the IT department and into a CFO or CSO type agenda. It's not just about the servers and how we minimise their impact, it is also about the entire ecosystem that we are a part of. What are the technologies that will allow us to grow while being much smarter about how we use resources? That question needs to be answered by the world's ICT companies; and not just the big guys, we're seeing a lot of small companies with great ideas coming into this space that are really able to differentiate themselves and sell into the likes of BT.
We've had a few questions come in for you over Twitter. One of which is whether BT will get involved with the Green Deal scheme?
There's an opportunity with the Green Deal. It is largely about rolling out low tech solutions that can make a material difference to the building stock. But as part of that BT has been lobbying for three years now to get a much more transparent system of energy labelling in place so that the consumer can see the carbon profile of the energy they are using and know the carbon intensity of their electricity. They would then be able to request that suppliers switch to a lower carbon alternative. Under the Green Deal we have a great opportunity to get people not just to consume less, but also to consumer better. But to do that you need transparency. Right now the consumer does not know the energy mix coming into their home or business. I suspect many of them would like to know and would make much more conscientious decisions on the back of that information.
So you'd like to see an A-G style rating for the carbon intensity of energy tariffs?
Yes - I think the A-G rating is something that could naturally be picked up by the Green Deal and support electricity market reform. We know that type of approach has worked with electrical appliances and we're confident it would work with green energy.
Another BusinessGreen reader question asks how you would advise someone interested in working in the sustainability space.
The key is to have an open mind and realise that how you get into this space centres around understanding how you change business. Business transformation skills and acumen are a vital part of the skill set for any budding CSO or environmental manager. You need to understand how to look at the business model as it stands currently and identify the threats and opportunities, and then identify how you implement change. It's not a very sexy answer, but a lot of it comes down to good project management.
Tony Blair, when he was asked what was the one thing he learned in government, said that when he went into politics he thought it was all about ideology and philosophy, but when he came out he realised it was all about project management and delivery. This agenda is very similar, a lot of the focus is on the philosophy and ideology, but while that's important I'd argue 80 per cent of this agenda is about programme management and delivery. If you can learn that and do it effectively it will make a big difference.
It is also only going to become more important, because the next challenge is around how you drive change through a whole business ecosystem, not just an individual business. The next step is pushing green approaches across the entire network of partners and suppliers and customers, and bringing those project management skills to play as broadly as possible is going to be vital as we aim to ensure there are countless networks all driving towards the same outcomes.