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WSP sets sights on becoming ‘premier global EC firm’

Logo - © WSP

WSP is a firm with a mission – a mission "to future proof our cities and environments". And if successful, not only will it have helped "our communities to thrive" through its planning, design, management and engineering services, but it will also have seen its own group headcount increase by 35% and net revenues by a minimum of 33% over the coming three years. This is what WSP has outlined in its 2019-2021 global strategic plan.

And the Montreal-based firm is in no doubt as to the role that its c6,000-strong environment line is going to play in that mission. In fact, underlining the contribution that the firm expects to see from its environmental line in its strategy has been the official promotion of André-Martin Bouchard, long-time global environment lead, to WSP’s top table as global director - environment.

Person - AM Bouchard © WSP

What’s the significance? Possibly some personal relief for Bouchard who admits that for some time he has been double-hatting, running the C$175m Canadian environment operation by day before turning his attention to the global operation by night! But aside from presumably giving him a little more family time, the recognition of WSP’s environment contingent is much more significant for the company as whole and indicative of its core intentions, as Bouchard explains to EA.

He says: "Today’s society is evolving rapidly, and, given the wider backdrop of megatrends impacting so many aspects of what we do and how we live, the importance attributed to environmental considerations is only going to grow. Our mission is to future proof our communities, our cities and our environment – it’s the backbone of our Future Ready programme.

"Over the last ten years we have built a great platform, organically and acquisitively, to realise our mission. But we continue to evolve as a global company, focusing on ensuring even closer ties to our global clients, developing better tools, sharing information and collaborating across our regions, business lines and sectors.

"We now have close to 6,000 environmental staff around the world and from an operational excellence perspective we have worked hard to integrate all our teams together. The fact that the environment division is now represented at global leadership level is hugely exciting - not just for our environmental consultants and for further developing our environmental consulting capabilities, but more importantly because it recognises the environmental line as a strategic priority for WSP and that really differentiates us on the market.

"WSP is among the very few global multidisciplinary firms where the environment sector is represented in the global leadership team. Now we want to take it to the next level. We want WSP to be the premier environmental consultancy worldwide in the next three years."

There can be no doubting the ambitions that the WSP board has for its environmental line.

Drive to diversify

But to be fair, there are other wider commercial considerations at play here also. Before embarking on its journey to internationalise and diversify its business, the company (Genivar as it was back then) was predominantly rooted in the Canadian property sector, and whilst it’s hard to question the success of a strategy that has seen it grow from a 5,000-strong Canadian player to 48,000 staff working in seven sectors in over 40 countries in six years, the two largest divisions (transport & infrastructure and property & buildings) still generate around four-fifths of net revenues. Under the latest 36-month strategic plan, WSP’s top brass are looking for further diversification of its portfolio and revenues; more precisely they want to see the current combined 20% share of the five smaller ‘Cinderella’ sectors - namely environment, water, power, resources and industry - grow to somewhere between 30-50% of the total.

And they’ve made a good start already, with the environment line’s share of the net total already up from 7% in 2015 to 12% in 2018. But what exactly does the "premier environmental consulting firm worldwide" look like to Bouchard?

He concedes that it would be difficult to claim that title without improving the firm’s rankings both in revenue and staff terms – and clearly that is an objective under the new strategy. But it’s not just about headcounts and numbers: "We want recognition across the market and with our clients as a high-end environmental advisory consultant - on a par with any of the pure-play environmental consultancies - but within the multidisciplinary context that is WSP.

"We want people to automatically associate ‘WSP’ with ‘environment’, in the same way that they already do with ‘transport’ and ‘buildings’. I think there is a very nice spot for WSP to fill; of course, there are other large firms with significant environmental contingents but WSP is publicly making environment a priority, which not only reinforces our commitment with our clients but will also ensure that we attract the top talent. By 2021 if we are not in the top 3 EC companies worldwide, we’ll be disappointed - that’s what we’re aiming for."

A top three EC ranking? According to EA’s most recent global EC market assessment report, WSP currently ranks tenth. Perhaps then WSP’s environment arm is going to be modelling itself on…let’s say ERM for argument’s sake, EA puts to Bouchard. "Of course not," he replies, "although I have the utmost respect for our competitors."

"We don't want to copy anybody. We have our own identity and our own go-to-market strategy and brand story. We’ll remain true to that but what really singles us out is that, being part of the wider WSP group, the environmental team is able to contribute to major infrastructure projects around the world many of which have significant environmental components to them. As a business line, we’ll continue to offer standalone services and generate the bulk of our own revenues but at the same time we will capitalise as much as possible from those internal revenues generated by projects won by other parts of the business."

Reaching the ranks of the top three

To achieve that goal, Bouchard is quite clear where he and his team are going to be focusing. From a regional perspective, WSP already has strong EC positions in UK, Canada and also Latin America (thanks to a slew of recent acquisitions there), but there is still space to strengthen its standing in those markets he says. And in the US - even with the addition of 600 environmental staff thanks to last December’s acquisition of Louis Berger (EA 1-Aug-18) - WSP is still subscale, according to Bouchard. It’s also underrepresented in continental Europe too. [That said, Bouchard exclusively reveals to EA WSP’s latest bolt-on acquisition: a 20-strong French geotechnical outfit called Sepia, with additional presence in Spain, so again it is clearly work in progress.]  Meanwhile, downunder, whilst the OPUS buy certainly cemented their position in New Zealand (EA 15-Aug-17), in Australia, there’s also more work to be done (and growth to be secured), Bouchard indicates.

And from a service line perspective, in line with the new global strategy, the focus will be on further improving strategic advisory services - everything related to ecology to permitting to EIAs and related services including climate change adaptation and sustainability services. And of course, it will still be reinforcing core EC services such as contaminated land, waste landfill management, and environmental compliance and due diligence or program/construction management services in WSP’s more mature markets and strengthening them in its newer markets.

M&A will also continue to be a significant component. As Bouchard says, take any top 100 environmental firms list [Ed: EA will be issuing its updated Global 100 list in the coming weeks] and any one of those firms could be a potential target.

However, one area where the firm still intends to keep a respectful distance, even with signs of improving fortunes, is the oil & gas sector (and here any assumed similarities with ERM are definitely put to bed). In fact, WSP CEO Alexandre L’Heureux recently made it clear that the firm has "no aspirations" to pursue oil & gas businesses (and at the same time he indicated construction would be given a similarly wide berth). But in the wider resources field Bouchard does see real opportunities for his team in the mining sectors of Canada and Australia, in particular.

Global firm with local feel

On the basis of its impressive recent growth trajectory, we’ll certainly be watching WSP closely over the coming three years. But with its stated objective to add another near 20,000 staff over that period, will this super-sized firm continue to be able to match the expectations of its core assets i.e. its staff, as well as it shareholders? There is anecdotal evidence of a growing malaise amongst employees working in the wider engineering services industry for some of the sector’s leviathans who long perhaps for simpler days of yesteryear in simpler (i.e. smaller) structures and organisations.

It’s an issue that Bouchard takes extremely seriously: "We all know that there is a shortage of talent; no doubt there is more movement now than perhaps we saw in the past. Voluntary turnover is something we watch closely, and, as outlined in the strategic plan, we’re aiming to keep that figure to less than 12% (from 14% currently).

"On a practical level, yes, we are 48,000 people but the global head office team comprises less than 150 people, mainly responsible for capital allocation, governance, policies, investor relations and brand among others. The P&L responsibilities and the client relationship really lie at country level. It’s a big firm but composed of many smaller WSP entities, with a decentralised and empowered model. And across WSP, if you look at the size of the projects that we work on, 28% of the revenue is generated from projects of less than $250k in fees. We offer the best of both worlds: the opportunity to play a part at local level whilst also having access to some of the world’s most iconic projects."

"And for our environment teams, I hope the new strategic plan is something that will give them a purpose, a strong sense of buy-in to a company that is progressive and a thought-leader particularly in the environment space," Bouchard concludes.

And finally, still on the subject of nurturing the environmental contingent to reach a top three ranking, the firm’s attention isn’t just limited to attracting or retaining talent from the existing EC pool. There are also initiatives in many quarters to bring on the next generation of environmental consultants. It’s the reason why WSP in the UK has been instrumental in helping set up a degree level environmental practitioner apprenticeship which will be launched later this year. It’s the perfect way both to ensure a future flow of new recruits (in around five years’ time) whilst also having the opportunity to mould and shape them to match WSP’s needs!

Afterall, to achieve that top three ranking, Bouchard is going to need all the recruits he can get!

WSP will issue its full FY2018 results on 14 March.

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