Sue Brown, Worley
Today's guest is Sue Brown, Executive Group Director of Sustainability at Worley.
As a leading global provider of professional project and asset services in the energy, chemicals and resources sectors, Worley is on the frontlines of doing the actual work to engineer and build everything we’re going to need for the clean energy transition, and they’re doing so across industries and the globe. Worley covers a full project lifecycle from guiding their customers with pioneering projects to finding innovative ways of sustaining and enhancing their existing assets. The company employs over 52,000 people, operates on all continents and is administered by its head office in North Sydney, New South Wales, Australia.
Sue has been with the company for quite a while and she runs a sustainability team, so we dug in on her journey and experience working at Worley. We also talk about the mix of project work coming from traditional industries versus cleaner sources, how that mix is shifting over time, what barriers are holding back the transition and what we can do to unlock faster progress.
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Episode recorded on September 14, 2022.
In this episode, we cover:
[4:47] An overview of Worley
[5:51] Sue's climate journey and how she started working in sustainability
[8:43] Role of an EPC like Worley
[13:42] How big oil and gas companies are transitioning into global integrated energy companies
[18:40] Breakdown of Worley's traditional customers vs new customers from emerging industries
[20:17] Worley's aggressive sustainability revenue targets
[25:33] Five key shifts service providers need to take for the delivery of projects
[28:15] Biggest barriers to the transition
[33:14] Balancing the tension between energy security and the energy transition
[35:40] Environmental justice reforms needed and how those might come about
[42:02] Talent bottleneck and ways to address them
[43:19] Sue's sustainability team and its charter
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Jason Jacobs (00:02):
Hello, everyone. This is Jason Jacobs.
Cody Simms (00:04):
And I'm Cody Simms.
Jason Jacobs (00:06):
And welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:16):
In this podcast, we traverse disciplines, industries and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Jason Jacobs (00:27):
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change. Today's guest is Sue Brown, Executive Group Director Sustainability at Worley. Worley is the leading global provider of professional project and asset services in the energy, chemicals and resources sectors. They cover a full project lifecycle from guiding their customers with pioneering projects to finding innovative ways of sustaining and enhancing their existing assets. The company employs over 52,000 people, operates on all continents and is administered by its head office in North Sydney, New South Wales, Australia.
(01:15):
I was excited for this one because the longer that I've spent looking at climate change and the clean energy transition, the more clear it is that we need to build a lot of stuff, and Worley is on the front lines actually doing the work to engineer and build all the things that need to get built, and they're doing so across industries and they're doing so globally. Now, Sue has been with the company for quite a while and she runs a sustainability team, so it was fascinating to dig in on her journey, why she does the work she does, and of course Worley, where it fits in, what they're seeing out there on the front lines, what mix of project work is coming from traditional industries versus cleaner sources, how that mix is shifting over time, how much of a strategic priority it is and why, what barriers are holding back the transition, what we can do to unlock faster progress, and where these EPCs fit in, in general.
(02:17):
Why is it that the US, for example, can't build big stuff? Or at least that's what a lot of people say. What do we need to do to get all the infrastructure built that we need to support the clean energy transition? I really enjoyed this one, and I hope you do as well. Sue, welcome to the show.
Sue Brown (02:36):
Thank you. Thanks, Jason, looking forward to it.
Jason Jacobs (02:39):
Yeah. I am too. I'm a little scared, because in my travels, it's come up again and again that early stage innovation starting from zero is important and there's a role for it and it matters and we should invest in it, but that the biggest bang for the buck, especially when you start factoring in things like the time value of carbon, is deploying the stuff that we've got at massive scale. That kind of deployment, when you get into building big plants and infrastructure and transmission lines and things like that, as a former mobile app entrepreneur, that's pretty far outside of my comfy spot, but it's just such an important piece of the clean energy transition that I, and anyone who's serious about accelerating the transition, needs to understand it and you are just so well situated working at Worley to help educate me and listeners on what's going on in that big wide world of deployment.
Sue Brown (03:37):
Absolutely. I think this is a bit of an unsung area of inquiry actually in the global conversation, if I'm honest, Jason. There's a lot of talk about targets and technology and what have you, but when you actually look at what needs to be delivered, to deliver the low carbon technology that's required to decarbonize an energy system, it's actually mind boggling and it's a massive task and we've done a lot of thinking on that in the last couple of years actually with Princeton University.
Jason Jacobs (04:09):
Yeah. I saw you wrote that, how many pages was that sustainability report that you put out?
Sue Brown (04:15):
Well, our 2021 one, I don't know, there was like 50 or 70 pages. This year, we've actually combined our sustainability report with our annual report, so really combined ...
Jason Jacobs (04:24):
That was like 100-something pages.
Sue Brown (04:24):
Yeah, probably, with all the financial stuff in there. But yeah, really looking at how we integrate this consideration of social and environmental value in the whole accounting of our business's performance actually. So that was a big step this year, that change.
Jason Jacobs (04:42):
Yeah. Well, before we get too far down the path, let's just take a step back. What is Worley?
Sue Brown (04:47):
Yeah. Look, so Worley is a global engineering project delivery firm, so we're about 52,000 people in 46 countries around the world now, providing project delivery engineering design services to the energy, chemicals and resources sectors globally. So we work on projects all the way through from the kind of feasible, pre-feasibility exploration stages, right through the detail design, construction thereof, and even some end of life workday commissioning assets and cleaning up after the fact. So we work with large heavy industry in the energy, chemicals and resources sector, which are of course the very industries that are very much in that difficult to abate and central to the energy transition that needs to happen.
Jason Jacobs (05:40):
How did you find yourself working in this industry, and also how did you find yourself working in a sustainability role in this industry? When did those intersect, as well?
Sue Brown (05:51):
Yeah. Look, I've got a couple of teenage children now and it's making me realize how much a freak I was as a teenager. But I saw a documentary as a teenager that really caught my imagination and it was about pollution from industrial plant equipment, the stereotypical image of belching smoke from a stack. At school, I was a science/math student, and had all these fellow students who were really interested in engineering, studying engineering, and I didn't even know what engineering was, but because they were all interested in it, I heard a lot about it and explored it a bit myself.
(06:29):
I decided that actually chemical engineering, which is the engineering of processes, was something that would be a pathway actually to clean up industry and to help improve those belching smokestacks that I'd seen as a teenager. So I went into chemical engineering with that endgame in mind, I went in with an intent to work on improving environmental performance of industry, even at that quite early stage. In fact, my first job out of university, rather than being with one of the big oil or chemical companies, was with an environmental regulator. So I went and worked for the government at the Environment Protection Authority and worked with a lot of industry and went on the job about what all their environmental issues were, across air, water, noise, waste, I got involved in some legal prosecutions and investigating incidents and things of that nature.
(07:21):
So did a lot of my environmental learning on the job, and then proceeded to work with some big industrial companies when I left the EPA, and then ultimately ended up working with what was then WorleyParsons, which was a big engineering project delivery firm, and did the one thing that I hadn't done over the course of my career, which was to take on a profit and loss accountability in the business. So I was actually in charge of a team that was delivering consulting services to industrial customers and did the P&L thing for a few years. So that was how I came to be here, and then so I've worked at that interface with our customers for probably about seven years, and then three years ago I moved into the corporate area of Worley and started managing our corporate sustainability program.
Jason Jacobs (08:13):
When you look at building out this infrastructure, can you talk a little bit about traditionally, when it comes to energy, chemicals, some of the other industries that you mentioned, what is the role of an EPC like Worley and how is that the same or different as you look at directionally where we need to go in terms of doing things in a more clean and sustainable way?
Sue Brown (08:43):
Yeah. So EPC stands for Engineer Procure Construct, and that's a package of work that often big project developers will tender out to firms such as Worley and others, to do on their behalf. So it's the design, it's the procurement of all the large equipment items that go into a big complex energy, chemicals or resources facility build, and then it's managing of the construction of the actual plant facility. So it's really critical actually when you look at the pace and scale of what needs to happen to achieve mid-century net zero, there's actually a lot of infrastructure that's going to be required, even if we use nature based solutions and what have you, there's still a lot that we need to do to electrify our energy system, to transport electrons around countries and between countries, to transport hydrogen, to transport carbon dioxide and sequester it underground.
(09:44):
There's a lot of that kind of work that needs to be done, and it's quite an art form. Delivering large complex projects, permission to describe it as an art form, it's definitely very scientific as well, but it's a mix of art and science, delivery of big complex infrastructure projects like that, not just anybody can do it. There's a whole ecosystem of procedures and practices that sit behind the control and management of all the many, many, many moving parts in a massive project like that. So those skills are going to be the very skills that are required to engineer, procure and construct the low carbon energy system that we need to build out over the coming couple of decades.
Jason Jacobs (10:30):
So in your mind, it's a similar sport as you look at, for example, oil and gas versus solar or wind or geothermal or hydrogen or carbon capture or these other areas, that it's the similar types of skills, just applied in a different area of technology? Maybe there's an emission's footprint that looks different in one versus another, but that the actual expertise involved is very transferrable. Is that what I'm hearing?
Sue Brown (11:03):
Yeah, absolutely. If we talk about the project delivery discipline, so that project management, management of contractors, management of all the moving parts to deliver a large complex project, that is a discipline in and of itself, and you can apply that equally to an offshore wind farm or an offshore oil rig, right? There's also a need for the technical understanding of the new low carbon technologies, and again, what we're seeing is that there's a great ability to transfer the skills of the engineers and other people that we have that work for us from working, for example, on natural gas and complex chemical processing facilities onto say a hydrogen manufacturing facility. They're still dealing with pumps and pipelines and flanges and pressure differences and temperature differences. The laws of thermodynamics don't change because you're talking about a different substance, and so there's great opportunity to transfer a lot of the skills that exist that people hold in traditional industries, if you like, into the low carbon future world.
Jason Jacobs (12:09):
Gosh, it's such a loaded word to even say the climate community, because what is the climate community? Everything is the climate community and nothing is the climate community, right? Then there's so many different perspectives that everyone butts heads and disagrees, so it's like, well, who are you actually talking about? I was about to say the climate community, so I'm trying to think, I'm just stream-of-consciousness here as I figure out the right wording. But I think what some people who are maybe critical of working with the big existing players in the traditional chemicals and fossil fuels and stuff like that, their concern is not a balance sheet concern, the opposite.
(12:50):
It's certainly not an expertise concern either, they certainly have the expertise to help. I think it's more of an inertia concern, an entrenched interest concern, a lobbying and trade group concern, concern that the ones with the most to lose in the short-term might be the ones who might drag their feet the hardest to live off the fat of the land longer, before the inevitable transition ultimately comes, and put it off as long as possible. So I think there's some distrust from people that put climate front and center of their careers in working with the big incumbents in the transition. I'm just curious, from your seat, how do you think about that? I know it's a sensitive question given who your clients are, but to the extent you can talk about it, it'd be great to understand just how you think about it or how Worley thinks about it.
Sue Brown (13:42):
Yeah. Look, I think businesses need to adapt and evolve to survive, don't they, because we don't live in a static world, the world's always changing, and most successful businesses and brands that have been around for decades and centuries even achieve that not by staying the same. I think what's clearly in evidence in, for example, one of the two being known as the big oil and gas companies is that they are transitioning to become global integrated energy companies. They can see that we are moving from a world that is about energy in molecules to energy in electrons, and they are transitioning their businesses and they're building the capability that they need to survive and thrive in that new world.
(14:30):
I think those companies bring obviously a lot of capital and ability to actually do projects and do research and develop things, they also do bring a lot of technical expertise and understanding of the global energy system and energy supply and demand, which is going to be required, or certainly the demand side, regardless of how you're supplying the energy. So yeah, I think those companies are on big transitions and they're bringing a lot to the task. They've also got a lot of skin in the game, Jason. They're got big valuable assets out in the world that are now at risk from the physical impacts of climate change, and so everybody's working to ...
(15:18):
The thing that I asked to my team about just recently, it feels like there's not a corner of the world that hasn't been touched in the last 18, 24 months with quite a significant impactful manifestation of climate change, whether you're dealing with a flood in Pakistan or 45 degrees in Central London or the worst brush fires on record in Australia or freak storms in the US. Every pocket of the world is being impacted by climate change, and that impacts on people's assets as well. It's very clear that the social license of certain technologies and industries and businesses will be seriously challenged by the impacts of climate change that everybody's feeling now, and businesses need to be diversifying and looking to that low carbon future.
Jason Jacobs (16:08):
So it sounds like you have this expertise and this expertise is relevant in the incumbent industries, and in the industries of the future, and just ballpark, what is the breakdown in terms of the existing work that you do, let's say in 2022 or in the last few years, of maybe some of these traditional higher emitting industries and technologies, versus the ones that are more sustainable? This is not like a gotcha, it's more just to get a snapshot of where we are in the transition and what Worley's book of business looks like. I'm sure all of that's in your annual report, so it's not like it's a secret or anything, but since I have you.
Sue Brown (16:47):
Yeah. No, no problem. So the [inaudible 00:16:50] at the moment is around 35% sustainability revenue, 65% more traditional conventional energy, and we have an ambition by 2026 to have that at 75% sustainability revenue. So we're absolutely looking to grow that low carbon part of our business, and we've taken a lot of ground frankly in the last two to three years. I think when we first started looking at that number a few years ago, it was something like 14% and we're not at 35%. When you look at our pipeline of sales that we've got record of, that's growing up to 50% and over, over the next 12 months.
(17:30):
So there's rapid change happening in the industry. If I can contextualize the rate of growth that's going to be required in these low carbon technologies, the IEA has said that the annual investment over coming years, out to 2030 and beyond, is in the order of four-to-five-trillion dollars per year in low carbon energy and supporting infrastructure, like transmission lines and what have you. That's four to five times what the investment was in 2021. So it's a significant step increase that's required, and to be sustained year after year, after year, after year for the coming two to three decades.
Jason Jacobs (18:16):
You might not know this stat off the top of your head, so it's more just about an order of magnitude than a specific number, but if you look at that 35% number that's coming from sustainable revenues, how much of that is coming from the same customers that you were serving on the 65% side versus new customers that are coming from these emerging industries?
Sue Brown (18:40):
Yeah, you're right, I don't have that breakdown to hand. It's certainly a mix of both, so some of our large global energy companies are doing some of the iconic new salable aviation fuel projects and what have you, and then there's others who are not traditional customers of ours, who are doing these Gigafactory, enormous factory storage facility type projects in different parts of the world. They're not entities that we've worked for until recent years, so it's definitely a mixture of both, no question about it.
(19:17):
If you can see the US government sending very strong signals at the moment around management of methane emissions actually, and is really the global leader on that particular charge, getting methane emissions down quickly as a key short-term driver to bring the temperature change down, there's methane emissions that are produced by agriculture obviously, but also the oil and gas industry is a significant contributor to methane emissions, and so it makes sense that we're working with our traditional gas customers around methane abatement, and we are. So we working across a range of fronts with traditional and new and different customers.
Jason Jacobs (19:58):
When you look at that goal to shift from 35% to 75% in just a few years, which is great, or I guess technically four years, but that's still not very many years, why? What's driving the organization to set those aggressive targets?
Sue Brown (20:17):
Yeah. Look, we did a really, I think a fantastic pace of work two, three years ago, we actually ... I'll just give you a very high level history on Worley. Three years ago, our heritage company by the name of WorleyParsons, which was an Australian Securities Exchange listed company, acquired a division of a big American engineering firm called Jacobs Engineering, and we acquired the energy, chemicals and resources division of Jacobs, and overnight doubled in size and became what is now known as Worley. As part of that acquisition and merger, it really was bringing together two equally weighted heritage companies, and so there's really a significant pace of work done around integrating the business and agreeing and deriving and doing the thinking around what's our purpose, what is this purpose that's going to bring us together, that is our north star, that gets us out of bed in the morning and all betting for the same team?
(21:20):
So there was a fantastic pace of work done over a period of months, about 80 workshops held all around the world in all our different offices, people, all different experience levels, different backgrounds, et cetera, et cetera, contributed to those workshops to arrive at, articulate what our purpose was going to be. At the end of that process, the purpose that was articulated is delivering a more sustainable world. Everything we've been doing since that was articulated, I think back in mid 2020, is really to line up to that. So in recent times, we've been doing some work around, well, what's our five-year ambition that will tell us that we're on track to achieving our purpose? This 75% of our portfolio being sustainability revenue is part of that thinking. So we're really lining up everything we do in the targets that we're setting for ourselves in support of achieving that purpose.
Jason Jacobs (22:17):
We're going to take a short break, so our partner Yin can talk about the MCJ membership option.
Yin Lu (22:23):
Hey, folks. Yin here, a partner on MCJ Collective. I want to take a quick minute to tell you about our MCJ membership community, which was born out of the collective thirst for peer-to-peer learning and doing, that goes beyond just listening to the podcast. We started in 2019 and have since then grown to 2000 members globally. Each week, we're inspired by people who join with different backgrounds and perspectives, and while those perspectives are different, what we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change.
(22:52):
Some awesome initiatives have come out of the community, a number of founding teams have met, nonprofits have been established, a bunch of hiring has been done, many early stage investments have been made, as well as ongoing events and programming like monthly women and climate meetups, idea jam sessions for early stage founders, climate book club, art workshops and more. So whether you've been in climate for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to MCJCollective.com and click on the members tab at the top. Thanks and enjoy the rest of the show.
Jason Jacobs (23:25):
Back to the show. If you look at the transition overall, I don't know if this is tracked or how one would track this, but if you look at the mix of different projects and the ones that would fall in the sustainability bucket and the ones that don't, and just as an aside, at some point we should probably define what means sustainability, because it's such a loaded word, but is the thought that you will essentially manage to the index of that shift and just keep up with the Joneses, or are you actually looking to get out ahead of what the market demands?
(23:59):
I ask because you're a services' firm, and so you're beholden to your customers, and if your customers want dirty or want whatever it is, I shouldn't say dirty, because then people get all angry, so I'll say if they want coal or they want natural gas, which is a whole other discussion, versus something that is more squarely in the future bucket, then are you at the mercy of that or are you actually trying to take steps to drive the transition as a firm?
Sue Brown (24:30):
Look, you raise a really interesting and salient point, Jason, which is as a service provider, increasingly I think we're going to be working in partnership with our customers actually, I think that model of service providers is breaking down and needs to evolve as we move through the transition.
Jason Jacobs (24:48):
Gosh, we could spend a whole episode just on that.
Sue Brown (24:52):
Correct, we could. There are issues around getting too far in front, and being really clear about what it is that we're pursuing and why. I think what we've been really seeking to do over the last couple of years is to start pushing the thinking in the wheelhouse that we squarely fit in, and that's why I love talking about the delivery of the projects, because there are significant challenges to the pace and scale at which we deliver complex energy infrastructure right now. To deliver at the pace and scale that the IEA is telling us we need to, to get to net zero 2050, some things need to change.
(25:33):
So as I mentioned earlier, we've put out a couple of pieces of thought leadership now with Princeton that really explore what are the shifts that need to occur, and there's five key shifts. We're really looking to explore that thinking and develop it more in partnership with customers, looking at different ways of doing things, so that we can accelerate this delivery. So the five shifts, because now that I've referred to them, I better tell you what they are, it's around with projects for development that we need to take a broader view of the value that those projects deliver to communities, so not all being about the economic merits of a project, but taking a more holistic view to what are the environmental and social, what's the environmental and social value being brought by given project?
(26:20):
We're of the view that we need to keep technology options open at the moment, we can't have governments picking winners and shutting things down, because we really need to pull every lever in different technologies, as you and our listeners know, work in different countries and under different circumstances and have different degrees of social license. We need to really standardize the design of the infrastructure that needs to build out. So at the moment, energy infrastructure is very, very bespoke in its design, and that inherently slows things down and makes things more complicated, so we see a need to design one, build many, and get a lot more standardization in hydrogen plants, for example, and you can really see it in wind farms.
(27:07):
We need to create more partnerships, and that's a really common reframe in the discussion around the energy transition. We need to be managing partnerships up and down our supply chains, and bringing complimentary skills and insights together to work problems together, no one can do this alone. We also need to be using digital technology to really accelerate the pace at which things move and the information that's actually available about projects and the build-out and carbon emission reductions, to provide transparency to communities about that process as we move through the transition.
(27:42):
So there are five of the big levers that we think need to be pulled and need to be done differently, and we are starting to work with customers to explore some of those things and develop some thinking in-house as well about how we can apply these to the way that we deliver projects for our customers.
Jason Jacobs (28:00):
When you look at everything that needs to get built, what are the biggest barriers that you see to getting the transition to happen faster?
Sue Brown (28:14):
Yeah. Look, so there's a couple. One thing, and the reason that we've been working with Princeton on this work is off the back of the amazing Net Zero America study that they published in late 2020, where they described five different scenarios to get the US economy to net zero by 2050. Then the thing that was radical and different that they did is they then downscale mapped that infrastructure and showed it on maps, so you could actually see where all the wind farms are going to be, where all the utilities go solar, where do the pipelines need to be, where the transmission lines need to be.
(28:50):
When you look at those maps, and a similar pace of work is well advanced in Australia in some interim findings and maps have been released in the Australian context as well, when you look at those maps it leaps off the page at you the importance of bringing communities along on this journey, and gaining and retaining the social license that is necessary actually for this sort of development to proceed. So I think there's definitely a big issue around creating value for all stakeholders in projects, and also around how the way we permit and approve these projects.
(29:29):
Permitting approvals is done differently in different parts of the world, done differently even in different states in the US, I understand, can take a very long time. Particular, if you're talking about a mine project for a transition middle, or a nuclear facility, you're really talking about 10-plus years, and we really need to look at that and look at how that permitting approvals process can be expedited without losing all the hard-won gains of the environmental and social impact assessment that has achieved a lot of good in terms of making sure that there isn't collateral damage associated with those sorts of developments. But we need to definitely look at how that can be made faster.
(30:15):
I think supply chain is a really big issue when you look at the build-out that needs to happen, you look at the concentration of supply of many of the pretty cool components and pretty cool materials that are going to be required in the new low carbon technologies, and there's a very great concentration of that at the moment in Asia and in China specifically, if you're talking about solar panels and even wind turbine blades and increasingly battery technology. So there's a real need to diversify the supply base of some of those critical components that are going to go into the transition. I think governments are awake to that and we've seen recently in Europe what happens when you have all your energy supply in one basket, or there's one player that controls too much of the supply chain, so I think we need to learn that lesson and ensure that doesn't sector into the low carbon technology.
(31:13):
So I think there are the big things, I think it's that social license, the permitting and ensuring the supply chains. There's also a skills issue, but I think that will resolve over time. I think over the next five years, we need more people with experience than what we've got, but I think ... I looked at my colleagues here at Worley, and there's so many people who are wanting to build on the skills and experience that they've gotten in the conventional energy sector and apply that in the new low carbon technologies and future, that I'm quite confident that transition will occur within experienced professionals already and doubtless universities are going to be pumping out new graduates with the right technical skills straight out of uni as well.
Jason Jacobs (32:00):
This next question, it's a hypothetical one, but there's clean energy, and you talk about the goals of 75% of the work that you take on being sustainable by 2026, and of course the mission of the company is to, I forget the exact wording, but around accelerating to a cleaner world, so you do that and you rally the troops and new grads come, because they want to deliver a more sustainable world, and everyone's on board and the employees are demanding, and that's where they're going to get fulfillment and satisfaction and they can't imagine working anywhere else, but the reality is that clean is super important, no doubt about it, but there are other things, as we just alluded to, that are also important things like security, things about independence, things about reliability.
(32:46):
So this is a hypothetical scenario, but let's say some of these other things come to the forefront, which don't make clean any less important, but just maybe make some of these other problems more near term and acute, which leads your customers to come to you and want to build more dirty stuff. But yet, you've declared this mission of facilitating, and then you've hired all these people that want to go bring about clean, how do you balance that tension?
Sue Brown (33:14):
Yeah. We're seeing this play out in Europe right now, globally, but more acutely in Europe and Germany specifically, this tension between energy security and the energy transition. The message that is very clearly coming out of the European Commission and different heads of state over there is that these are not mutually exclusive, these need to be solved together. There's an enormous opportunity actually in accelerating the energy transition to achieve energy security. Now, that being said, clearly there are bumps in the road. There are steps being taken that 12 months ago nobody ever would have thought would have happened, like Germany extending the life of a coal-fired plant, et cetera.
(33:55):
I think the view is, and certainly my view is that, that's a bump in the road. This is a decades-long transition, it's not going to be a linear reduction or a linear process. There are going to be bumps in the road and twists and turns, but everybody's eye remains on the prize of mid-century net zero, and I think that remains the case. I think, picking up on my point before about the physical impacts of climate change, they're really ramping up now, and I think there is absolutely no way that we can turn back from this de-carbonization journey that we're on. Will it move at different paces over the coming decades? Probably. Will there be bumps in the road? Probably. We're seeing one right now, but I think ultimately it's the journey that the world is on and there actually isn't a lot of optionality around that.
Jason Jacobs (34:49):
Now, a followup to that is you talked about all this infrastructure that needs to be built and you talk about the importance of social license and there needs to be a value proposition at the community level, and I guess my question is, I'm no expert on the IRA bill here in the US, but it seems that one of the tension points is, hey, it's great that we're green-lighting all this clean stuff, but permanent seems like it's a really thorny topic, especially in the environmental justice community. I'd love to just get your view on what's happening there, why there's this debate and tension, and how you balance those two things. I have a followup, but I'm going to save that one until we cover this important question first.
Sue Brown (35:40):
Yeah. So this is a very curly question, and I don't think it's a simple answer, so I can just talk in some generalities. I think there's no question that the environmental and social impact assessment and permitting processes that we've had in place for many decades have created good in the world, in terms of minimizing and eliminating what otherwise might have been adverse impacts, have really helped to mitigate the impact of development. However, the downside is that in some jurisdictions, it's just a really complex slow process. You've often got more than one jurisdiction involved, or one level of government, so the federal government might have a role, the state government, provincial government might have a role, and then if you're talking about a massive piece of linear infrastructure like a pipeline that's going to be used to carry CO2 for sequestration of hydrogen or a big piece of linear electricity transmission line, then you're bringing in even more jurisdictions and it all gets more complex and complicated.
(37:00):
So I think we need to find a way to do that faster and smarter, that doesn't undo all negate protections that we've come to expect in our development process. So it's not a straightforward fix, but I do think, can we use technology as a way? So for example, datasets on the natural environment and biodiversity, is there some work that can be done to provide, open source some of that information? So it's just there, so you don't have to have bespoke surveys done over a period of 12 months, a particular parcel of land to a particular development, but no, actually we build as a global community, or as a country or as a state or whatever it is, a body of data that then supports and can be drawn on through a permitting and approval process.
(37:54):
Now, there are probably other legislative changes or reforms that are required, I'm not close enough to the US system. What I do know about the US system is that it's very different to the Australian system, so I understand that in the US it's actually the government that controls the environmental social impact assessment process, whereas here in Australia it's the project proponent that does that and then the government does a review. So there's some fundamental differences in the way things are done around the world, but what I know about both US and Australia is there's an opportunity to reform and streamline I think, without losing the benefits that those processes provide.
Jason Jacobs (38:34):
It seems, and correct me if I'm wrong, but that policy plays a major role in how quickly this transition plays out. Given where you sit, and again, correct me if I'm wrong, but it seems like yes, you have your goals, but you'll get paid if the transition goes slowly and you'll get paid if the transition goes quickly, and it's really your customers who are driving the work you do, at least to some degree. Given that, I'm just curious how much Worley as a company gets involved in the policy discussions, if at all, and why or why not?
Sue Brown (39:14):
Yeah. Look, we're pretty apolitical, to be honest, so we don't tend to be out advocating policy positions. What we do like to do is, where it's helpful, is to provide our observations, because we are out, boots on the ground, delivering projects, understanding what the realities of bringing a hydrogen project to market in whatever country of the world it is, is. That's actually a really useful perspective to policy makers, and so we do like to contribute that where we have an opportunity to, but we don't tend to be out there advocating policy positions.
Jason Jacobs (39:55):
I know we're getting a little long in the tooth here, but there is just a couple of substantive topics I'm hoping to address quickly, if that's okay.
Sue Brown (40:03):
Sure.
Jason Jacobs (40:03):
One of them is funding. So I know that Worley, or I'd imagine, and correct me if I'm wrong, that you aren't funding these projects directly, you're delivering them and getting paid by whosever funding these projects. So I guess my question is, as you look at the capital stack and there's the first of a kind and the valley of death and project finance and government grants, and there's all these different source of capital, but is capital bottleneck, and if so, where in the stack stands out most to you, given your perch and the kind of work that you take on?
Sue Brown (40:37):
Yeah. Look, there are probably other people who can speak with far more insight than I can around capital, what I am aware of though is that, at the moment, particularly with emerging technologies like hydrogen and wind and different things, is that oftentimes those projects aren't yet commercial. So I think what we've seen work to really accelerate the deployment of utilities, solar and wind over the last decade, is that government, early government support to de-risk projects, to then leverage the private sector investment is a model that's been very successful in solar and wind, and we hope to see more of that in some of the new emerging low carbon technologies.
(41:25):
So I think there's a real role for government there, and you can see that in the Inflation Reduction Act, it's like a massive shot in the arm for project development and de-risking in the US, and we'll see things go ahead at pace now. So yeah, I probably don't have much more to add on that, finance is not my dag, Jason.
Jason Jacobs (41:46):
Nor me, to be honest. I know the buzzwords, that's about it. But what about jobs, so when it comes to having the right people and enough people in the right skills, how much of a bottleneck is that?
Sue Brown (42:02):
Well, it absolutely is, if governments aren't investing and universities aren't adapting their courses of study, but I see evidence of that happening all over the place. So I think skills, there's a real ... People talk about a just transition and often talk about these towns or counties that are being built around different fossil fuel assets and they'll be left with nothing, those sorts of people who are skilled working in an industrial setting and who understand energy, I think there's a home for everybody in the new energy future, to be honest.
(42:42):
Now, it might not be in exactly the same town that you're living in, in some instances, but I think government's spending a lot of time and effort looking at how we transition communities like that. I just think people have a lot of transferrable skills and fungible skills that can be deployed to the low carbon future technologies that we're going to need.
Jason Jacobs (43:04):
We've talked a lot in this discussion about Worley this and Worley that, but what about within Worley, Sue and the sustainability team, what is the charter of the team and what are you doing either internally or externally to bring about change?
Sue Brown (43:19):
Oh, yeah. So our team, I have a small team, about half a dozen of us in the corporate sustainability team, driving our corporate initiatives, and we really see a couple of key facets to what we do, and one is elevating our voice and building our thought leadership in this space. So the work with Princeton is part of that, me talking to you is part of that, us offering our insights and observations around the world to different governments and stakeholders and customers is part of that, speaking at conferences is part of that.
(43:54):
We're also really actively seeking to build a sustainability culture across our business, so just as over many years and decades, ourselves, other contractors and our customers have spent a lot of time and effort building a safety culture to reduce the safety incidents and fatalities, we're looking to build a sustainability culture. So really building the awareness and understanding of what it is, how we can bring it on our projects, arming people with the tools and the processes in our internal workflows to bring that thinking to everything they do. So really looking to build the culture as well.
Jason Jacobs (44:37):
When you say sustainability and that 75% target for example, I could guess the obvious ones in terms of what doesn't fit and what does fit, but let's talk a little bit about the gray areas. Are there big internal debates about what is or isn't categorized as a sustainable project?
Sue Brown (44:54):
There's certainly, we're an organization of 52,000 people, so 52,000 different opinions across the business. We've effectively developed the Worley sustainability taxonomy, it will probably evolve over time, it's loosely aligned to the EU taxonomy, insofar as we include integrated natural gas in that taxonomy, as the lowest carbon fossil fuel and definitely as a bridge to the transition that needs to occur. So yeah, there's different views, but we've certainly done a lot of work to look at that and to map what we think should be in and what's not, and will continue to evolve that over time.
Jason Jacobs (45:37):
Our last question is just if you could wave your magic wand and change one thing that's outside of the scope of your control, that would most accelerate your ability to achieve those targets in 2026 and beyond, what would you change and how would you change it?
Sue Brown (45:51):
I would like that magic fairy to put a global price on carbon.
Jason Jacobs (45:55):
Why?
Sue Brown (45:56):
Just to level the playing field and drive the behaviors to reduce the complexity of the transition. It would really let the market take the steps that it needs to take to do what it does best, which is make money. So I think a price being attached to carbon would motivate a whole lot of activity, which is activity that we need to see.
Jason Jacobs (46:19):
Sue, this has been such a far-reaching discussion. Is there anything that I didn't ask that I should have? Or any parting words you'd like to leave listeners with?
Sue Brown (46:28):
No, just thanks for the opportunity. I think it's great what you're doing here with this podcast, Jason. Just really opening up, providing a safe space for people to learn, and I won't say ask the dumb question, because we're certainly not asking questions, but those questions that you've got in your head or those things that you want to learn more about, I think this is a really great, great platform for people to be able to come and hear straight from the horse's mouth on different things.
Jason Jacobs (46:56):
Well, selfishly, I just learned a ton in this discussion.
Sue Brown (46:59):
Oh, great.
Jason Jacobs (47:00):
Well, Sue, thank you so much for coming on the show and wishing you and the whole Worley team best of luck, and also best of luck in the transition as well. Hopefully, we'll make it an ongoing dialog. If there's any way that we can assist you along the way, please let us know.
Sue Brown (47:15):
Great, thanks, Jason, really appreciate it.
Jason Jacobs (47:18):
Thanks again for joining us on the My Climate Journey podcast.
Cody Simms (47:21):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. To do this, we focus on three main pillars. Content, like this podcast and our weekly newsletter, capital to fund companies that are working to address climate change, and our member community to bring people together, as Yin described earlier.
Jason Jacobs (47:43):
If you'd like to learn more about MCJ Collective, visit us at www.MCJCollective.com. And if you have guest suggestions, feel free to let us know on Twitter at MJC Pod.
Cody Simms (47:58):
Thanks and see you next episode.
