Driving the green machine

Born again
Just over a decade later, Carillion, the contractor formerly known as Tarmac, lists sustainability as one of its five key strengths. “Social and corporate responsibility extends to everything a business produces, how it buys and sells, how it affects the environment, how it respects the rights of people and invests in the community,” says its website.

In 2003 it won Business in the Community’s (BITC) ‘Impact on Society Award’ and became its ‘Company of the Year’. It is the highest ranked construction company in the Sunday Times/BITC Corporate Responsibility Index which was published on 14 March 2004.

How did this contractor change from being the scourge of the environmentalists to a leading light for sustainability? Are we looking at a PR triumph or a more deep-rooted transformation?

The protests at Twyford Down were significant because they united a wide cross-section of society for the first time. It wasn’t just the crusties - Swampy and his pals - or the sandal brigade or the wildlife lovers. Regular, middle-class people too were outraged at the thought of a massive wedge slicing through the beautiful Hampshire chalk down.

The cost of security, borne by Tarmac, was £2m and there were violent clashes between police and protesters. Twyford Down triggered a whole series of other protests, which some say was the reason – or perhaps a good excuse - for the Major government severely trimming back its road building programme.

The enemy within
For Tarmac the impact was equally significant. Away from the site, protesters targeted offices in Southampton and London and six were arrested after they broke into the Wolverhampton HQ. Even the board got first-hand experience. In June 1994, protesters who had bought shares in the company caused chaos at the annual general meeting, preventing the chairman from speaking for 10 minutes and bombarding the board with probing questions about environmental issues.

It was chairman John Banham’s first AGM with Tarmac. At it he announced that the company would set up an independent environmental panel and start to report environmentally, which it did the following year.

Despite its environmental awakening, the grief continued for Tarmac. In 1995, the M65 near Blackburn attracted less media attention but plenty of protesters. In 1996, Tarmac’s construction arm shunned the controversial Newbury Bypass, but Tarmac Roadstone won the surfacing contract, invoking cries of ‘hypocrite’ from Friends of the Earth. Protesters smashed up Roadstone’s Newbury office. In 1997, the appearance of Swampy at Manchester’s second runway guaranteed a media circus there. And Tarmac Heavy Building Materials had to pay a £7,000 fine for polluting a river in the same year. Morale among staff was low.

Sustainability makes sense
One project was about to push Tarmac to the forefront of the sustainability seminar circuit. In 1998 Tarmac brought in a consultant from The Natural Step (TNS), a Swedish-invented system for building sustainably, to advise on its Swindon PFI hospital.

The project team was enthused. They were making decisions which were good for the environment and made business sense for a PFI job. TNS helped them to examine the materials and products they would use, for example they halved heat loss through the roof by increasing insulation and changing radiators. They created a Sustainability Action Plan which encouraged car-sharing (and even lorry sharing for trade deliveries) and setting and monitoring aggressive waste targets, for example.

Then came the opportunity to rebrand. In 1999 shareholder pressure led CEO Neville Simms to demerge the contracting arm from the heavy building materials business. It was a chance for those in construction to reassess their values and goals, says Quentin Leiper, who took on responsibility for environmental issues in 2000.

No longer was the firm Tarmac, that black stuff which coats the countryside. It was Carillion with its blue pool ‘C’ insignia, and accompanying green tree and sun.

Back then, remembers Leiper, environmental issues were seen as vital but not key, although the firm was doing all the right things with respect to target-setting and measuring progress with KPIs. “The board saw environment as the nice thing to do as opposed to seeing that doing it well was a business opportunity.”

Leiper admits he couldn’t see the business value at first. “I thought I had to be green and say we are doing it for the planet,” says Leiper. “It took me a year to stand up and say we want to be sustainable for Carillion.” Leiper, a civil engineer, made sense of the business case for sustainability by producing diagrams (his ‘sun diagram’ to map the firm’s business to sustainability issues is shown left). Since then others – such as Severn Trent – have taken on his logical engineer’s definitions.

Leiper also changed the name of the Environmental Panel to the Sustainability Panel, “I could see the market was moving towards sustainability”, and brought in former Friends of the Earth director and founding member of Forum for the Future Jonathan Porritt. “Jonathan stretches us on sustainability but he is very aware of the business context.” Leiper also upgraded the panel so it was board members rather than operational MDs who joined the independent experts.

At project level, bid teams use Leiper’s sun diagram to help them show how the project will contribute to the different elements of sustainability. In how much depth depends on the client. It’s a differentiator, says Leiper, although you must couch things in the same way as the client. “Sometimes we have got to lose the word sustainability and get into the jargon and the talk that the client uses. If he calls it CSR, we must call it that too.” Another goal is that all projects will have a Sustainability Action Plan. So far 200 people have been on a two-day course (‘The Natural Steps’) to that end.

Value-added ventures
The value of getting people motivated is immeasurable, says Leiper. One of his first moves as environment director was to seek out a charity that operated at a regional level. Now site staff can volunteer locally on projects with The Wildlife Trusts in addition to Carillion donating cash. “I didn’t want to just send the money. I wanted to get engagement at a project level and at a business level. It makes individuals feel of worth. Hopefully we are using it as a way to engage with staff.”

There’s more. Carillion people get involved in the community. Schemes include staff spending time in schools, carrying out projects with the pupils, and graduate recruits learning team-building while decorating a community centre.

The car fleet has also felt the touch of sustainability. They are all diesel now to reduce carbon dioxide emissions. Carillion’s goal is a 5% reduction in CO2 year on year. And at the moment managers are being asked to look in their boots. Heavy golf clubs transported hundreds of miles burns more fuel.

Meanwhile Leiper is spreading the message, lecturing to civil engineering students and visiting other firms to talk about sustainability.

But does this really make a difference to the way Carillion does business? Would the ‘new Tarmac’ turn down another Twyford Down?

Yes, says Leiper. Sustainability is now a consideration when Carillion goes through the bid/no bid process. It became part of the matrix it uses to weigh up projects, alongside risk and financial aspects in 2002. “We would reject some projects,” he asserts. “But there is a balance to be found. If it’s gone through the due process of law, do we turn it down because we don’t think it’s a good idea? Some we would. Some we wouldn’t.

“How do you balance the social side of sustainability with the environmental? I don’t think anybody has a proper grip on that.”