Scott Wilson: changing the face of engineering consultancy
08-Jan-09
Liz Trew talks to Scott Wilson's director of planning, environment and landscape
Scott Wilson may not be one of the first names that springs to mind as one of the country’s leading environmental advisory firms, although that is exactly what it is. Achieving a similar level of fee income to the likes of more familiar players such as Enviros, Golder Associates and SLR, the firm has been quietly experiencing strong growth over a sustained period in the environmental activities within its technical and professional service portfolio. Environment director Stuart Coventry is keen to raise the business's profile and up its game on the corporate communications and marketing front – so do not be surprised to see the name Scott Wilson cropping up more often at green industry awards and in the trade press over the coming months.
Delving into his professional background, we find that Mr Coventry is something of a rare breed, having been with the same company throughout a career that spans nearly three decades. Fresh out of university, he joined Scott Wilson as an engineering sciences graduate in 1982 and became chartered a few years later. His arrival in the environment field at the end of the 1980s came, by his own admission, “almost by chance” whilst stationed in Hong Kong, where he got involved in a number of waste management projects, mainly relating to landfill design, as well as some water quality work. At that time, he says, “I was probably the only person in Scott Wilson's environment business.”
Recognising that there was also a growing demand for specialist environmental services back home, Mr Coventry returned to the UK in the early 1990s to focus on building the company’s environmental consultancy division. He now heads a team of more than 300, with the numbers swelling to around 600 if the planning and landscaping resources managed within the same operational group are included. Globally, the environmental consultancy has approximately double the number of UK staff.
Mainstreaming
But it is not the change in scale of operation, international expansion or even the transition from private firm to publicly quoted company – which happened in March 2006 – that stands out to him as the most significant step forward for the business during his time at the helm. Instead, it is the “mainstreaming” of the environment and broader sustainability agenda through all parts of the Scott Wilson business.
He elaborates: “Scott Wilson was for a long time known as an engineering consultancy and design service, but the consideration of environmental and social issues is now much closer to the heart of what we do. In the early days, a lot of what our environmental people did was to serve and support other areas of Scott Wilson, which was fine but our ambition was really to lead the way into projects. And we made that change about five years ago. Now we are often in the driving seat and we'll be the ones to bring in Scott Wilson design services, which is a fundamental shift.”
Related to this, there has also been a discernible change to the core clientele of the environmental consultancy. “We're still working on major infrastructure projects, which is Scott Wilson's pedigree, but over the last two or three years we've started to build up a much larger percentage of turnover working for clients who aren't building things. We're advising more on strategy and business implications, and assisting industry with their operations.”
Another effect of the ‘greening’ of services throughout the group, he muses, is that “you can’t really draw a line round the environmental business within Scott Wilson.” But instead of being a problem he sees this as “a strength that can only serve to raise the profile of environmental work internally among our engineering colleagues and externally among their clients”.
The group is currently restructuring to combine related activities – such as water, waste, geotechnics, power and mining – with the environment, landscape and planning team to form a broader divisional heading “environment and natural resources”. According to recent financial results, the aggregated business achieved a turnover of £38.1 million for the six months ending 26 October 2008, accounting for just over a fifth of Scott Wilson’s total revenue (EA Newslink, 09-Dec-08). Mr Coventry confirms that with compound annual growth running at around 15-20% for the global environmental consultancy over the last five years, it is growing faster than the entire group – including the other divisions such as buildings, infrastructure, roads and rail. What is more, the growth has been mainly organic, with only one or two niche acquisitions.
Growth trajectory
Becoming a plc three years ago has allowed Scott Wilson to fund expansion both within the UK and internationally. China is now the biggest region for the firm outside of the home market, while it is looking to grow environmental services in south east Asia, Australasia and central and eastern Europe. “India is also aspirational for us,” says Stuart Coventry. “We’ve got an embryonic group looking and planning and environment out there. We also plan to grow our Middle East business - despite the current Dubai difficulties, we feel there is still significant room for growth in a range of sustainability services.”
The group has a strategy to develop a high level of consultancy capacity in all its international offices. “We don’t see it as a colonial model,” says Mr Coventry, “but what we are striving for is to have mobility within the global workforce to deploy the right people with the right expertise for a job no matter which country they are from.” He adds that one of the biggest obstacles to achieving greater mobility is that “when you build a capability in a country it tends to get swamped by the local market and people are then not available to work elsewhere”.
Stuart Coventry’s most immediate challenge is how to continue to meet the group’s ambitious growth target for the UK environmental business of at least double digits per annum while the market plunges deep into recession. “Oddly, and thankfully, we’ve got as strong an order book now as I think we’ve ever had for both the environment business and Scott Wilson as a whole,” he remarks. “However, we have had to move our focus [he pauses]…there’s no doubt that clients in the development sector have reduced their spend.”
Property and construction clients account for as much as 20% of the consultancy’s environmental fee income, and like many other large multidisciplinary players there have been a “small number of redundancies” – mainly among planning staff. But Mr Coventry stresses that “there are no plans for mass redundancies” and other planning staff have been able to make the shift into areas less affected by the economic downturn such as transport infrastructure, waste infrastructure and the water and renewable energy sectors.
While contaminated land never has been a major business for Scott Wilson, the environmental impact assessment (EIA) aspects of development constitute a sizeable proportion (18%) of total environmental fee income. “Our exposure to EIA as a percentage of the business has probably reduced over the past year,” Mr Coventry admits, “but it has still grown in real terms as the planning cycle doesn’t just stop – there are still some big commissions to be had out there.
“We’ve got a considerable amount of work from major road projects in the UK, the water market is still strong and where we are active in the development sector – for example on sustainability appraisals, eco homes, the code for sustainable homes and BREEAM – our team is under more work pressure than ever before. So I think our strength at the current time is really the diversity of what we do, and a good mix of private and public projects."
The environmental consultancy business derives at least half of its revenues from projects funded by the public purse and a large chunk of the remainder comes from quasi-public sector utilities and companies working for utilities. Scott Wilson is currently acting as planning and environment advisor to Thames Water for the ambitious £2.2 billion Thames Tideway Tunnel “super sewer” scheme to deliver water quality improvements, described as “one of the largest infrastructure projects in Europe”.
- The company has also recently been commissioned to assess the equalities impacts of two other major UK infrastructure plans – the London 2012 Olympics and the third runway at Heathrow. The discipline has been developed to assess the effects of proposals on a range of population groups according to factors such as ethnicity, gender and socio-economic status, whereas conventional social impact assessment tends to focus on the net effect on a total population. It is an emerging area in the development assessment field – and “something UK government bodies suddenly seem extremely keen on”, he says.
State of the sector in 2009
Mr Coventry believes that the influence of the city and its shareholders since becoming a plc has helped crystallise a move for Scott Wilson into sectors less affected by economic climate, in addition to a focus on better management, sound commercial practice and reporting of performance indicators. The firm also remains open to making further acquisitions in the post-credit crunch market. “We’re not the only major consultancy that is still in a strong position,” he says, “but the jury is still out over whether there will be more consolidation in 2009.”
Speculating on how the market playing field may develop during the course of the year, Stuart Coventry is of the opinion that “over the next twelve months our competitors who are more exposed to the private sector will have to reduce staff numbers and try and fight their way into other markets less affected by the downturn”. He notes that “already we have seen some of the major consultancies reducing prices in an attempt to buy their way into some of our established client sectors.” Mr Coventry believes it inevitable that competition for the work that is still out there will intensify and tensions will mount.
Another change being brought about by the current economic climate is the potential to redress the skills shortages that have plagued the sector during its rapid development over the past decade. Even as recently as eighteen months or a year ago firms were still reporting major difficulties in filling vacancies and retaining staff, but now only a handful of the largest, and bravest, environmental consultancies are still actively recruiting across the board. Stuart Coventry admits that Scott Wilson “hasn’t recently been looking too hard for new people”.
Having effectively taken a step back to take stock of the resources it already has, he believes that there is an ability to grow fee income without aggressively growing staff numbers “if you work what you’ve got a little it harder”. This, Mr Coventry says, can be achieved through greater focus on project work rather than developing new areas of business. Where the firm has felt the need to bring in new talent there has been an “increased level of rigour in terms of the business case for doing so”.
Carbon business
One area for Scott Wilson's environment team that continues to grow is carbon management. “We are getting a lot of commissions to establish carbon footprints for major UK organisations through our status as a Carbon Trust consultant and also through working with the CBI, which often leads to further work looking at how to reduce carbon emissions in line with clients’ target commitments.”
The consultants are advising Tesco, for instance, on site-based renewable energy technologies to drive down the supermarket chain’s carbon footprint and help it meet a target to halve the average energy use of its buildings by 2020 compared to 2006 levels. This has included the installation of the UK’s first combined cooling, heating, and power plant (CCHP) room utilising ground-breaking tri-generation technology developed by Scott Wilson and its partners at Tesco's store in Colney Hatch, London.
Scott Wilson is also exploring emerging opportunities in carbon emissions trading on the international scene, including advising on how to leverage project funding from carbon reduction credits. “We’re looking at a handful of projects in West Africa where we are developing carbon credits through our own investment,” Stuart Coventry proudly states. “This means we will actually own the carbon reduction certificates, which we can then either sell to the market or retain for our UK carbon footprinting clients to access.” Currently this is an unusual approach for an environmental consultancy, but Mr Coventry anticipates doing more work on carbon credit-generating projects in the developing nations – particularly Africa – over the coming years.
Back in the UK, while many of Scott Wilson’s contemporaries have been gearing up for the new regulations on the energy performance of buildings, Mr Coventry reveals that energy performance assessment and certification is not an area of core focus for his firm. This is because Scott Wilson has concluded that it is a “commodity market where there is going to be a lot of pressure from companies who can do EPCs quite cheaply”. What is much more tantalising from Scott Wilson’s point of view is the design of sustainable, low-carbon engineering solutions that will be necessary for buildings to attain the required energy efficiency grades.
This area, he predicts, has massive potential and goes back full circle to his observation that the engineering capability within Scott Wilson is becoming an environmental service in itself. “It sums up the position we want to reach across the entire group as an integrated service provider. We’ll have our mechanical and engineering people talking the environment and social language, and our environment people talking the engineering language.” In future, he expects to see Scott Wilson engineers and environmental consultants working even more closely together “as I happen to think that the combination of science, engineering and knowledge has got to be where it’s at."
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