Sustainability with Impact: A Downer Case Study

As the prominence of Environmental, Social, and Governance (ESG) rises within corporate Australia, the intersection between sustainability and workplace Health Safety and Environment (HSE) becomes increasingly important.

Organisations like Downer Group are spearheading efforts to embed sustainability into their operations and serve as models for those striving for a more sustainable future. In this article, we delve into Downer's journey towards sustainability and gain inspiration from efforts that extend far beyond business as usual.

ESG at Downer Group

Downer Group are a leading provider of integrated services across Australia and in New Zealand. With a very diverse portfolio, their products and services impact the lives of millions of people every day.

The principle of ‘Zero Harm’ acts as a cornerstone of Downer’s operations. As such, sustainable growth, responsible activities and minimal environmental impact are seen as being essential for long-term success.

“At Downer, the sustainability of our operations is paramount – for our people, partners, shareholders, customers, and their customers,” emphasised Ricky Bridge, Group General Manager of Environment, Sustainability, and Reporting, at a recent HSE leaders forum held by The Safe Step.

A strategic approach to sustainability

Downer has been focussed on sustainability for several decades, but the momentum and sophistication of efforts has increased in recent years. The goal for ESG specialist Ricky Bridge is one of constant improvement “What was considered sustainable 20 years ago is no longer sufficient. Our understanding and our efforts must continuously evolve,” he says.

In more recent times, stakeholders seek, not only for sustainable messaging, but also clear and credible ESG plans, alongside transparent reporting.'

Materiality assessments help Downer identify the most critical sustainability issues for their business and stakeholders. They align their strategies with the United Nations' 17 goals, using key performance indicators, targets, and metrics to track progress.

Commitments are outlined in Downer’s Environmental Sustainability Policy and our Zero Harm Management Framework. A number of initiatives are designed to keep employees and broader stakeholder groups aware of and engaged with environmental sustainability commitments.

Data-Driven Insights

Downer uses ESG platform ENVIZI, which captures and analyses vast amounts of information from across the business. This data-driven approach helps to break down traditional silos, identify improvement opportunities, make informed decisions, and drive ESG outcomes at scale.

Sustainable Finance and Debt Platforms

Downer has taken significant steps to integrate sustainability into financial practices. In 2020 the group refinanced its debt platform, securing a $1.4 billion syndicated sustainability linked loan facility. This loan aims to incentivise Downer to meet sustainability commitments and support sustainable economic activity. It is linked to KPI metrics tied to greenhouse gas emissions reductions and social sustainability, which, if achieved, will lower borrowing costs.

“The inclusion of sustainability issues in debt financing shows the increasing and tangible focus that a wide range of stakeholders are placing on sustainability performance, extending beyond a regulatory lens,” says Bridge. He recommends working closely with Finance teams to amplify impact.

Operationalised ESG

Integrated and operationalised sustainability is a key criterion for senior executive Short-Term Incentive (STI) and Long-Term Incentive (LTI) programs.

Business units are empowered to take ownership and identify areas where they can have the most impact. By aligning their actions with the Sustainable Development Goals (SDGs), Downer ensures that every employee contributes to sustainability in their day-to-day jobs.

Transparent Reporting

Transparency plays a vital role in Downer's sustainability efforts. They have published a dedicated Climate Change Reports that monitors climate-related initiatives, progress, and targets.

Annual Sustainability Reporting showcases their commitment to addressing gender equality, conduct on a range of ethical issues including modern slavery, WHS, climate change, community relationships and mitigating environmental impact.

Emissions reduction

Downer has established a centralised decarbonisation fund to decrease direct Scope 1 and 2 emissions. While they have made good progress in this area, Ricky Bridge says Scope 3 emissions pose a significant challenge, describing indirect emissions as “the big elephant in the room”.

While achieving net-zero emissions can be challenging, he is starting to see examples of how it can be achieved. They embrace a pragmatic approach to decarbonisation, aligning their pace with the Science-Based Targets Initiative (SBTI).

Downer acknowledges that achieving sustainability targets necessitates addressing Scope 3 emissions, particularly in their Road Services business and vehicle fleet. They actively explore ways to reduce the environmental impact, including shared vehicles, optimising driver behaviour, and exploring alternative fuels. Collaborating with fuel providers and engaging their broader supply chain enables Downer to learn from partners' experiences and drive continuous improvement through data sharing.

Conclusion

As organisations become more serious about their green credentials and ambitions, they can draw inspiration from Downer Group's initiatives.

To help lead the way, ESG and WHS professionals should adopt a holistic, forward-thinking approach to sustainability. Making a difference won’t happen overnight, but understanding and aligning with ESG considerations is the first step.

After all, there is a clear benefit in being able to help organisations create maintainable profits, cultivate positive work environments, and contribute to a more sustainable and prosperous society.

How can we help?

Has your team got the capabilities and experience to achieve sustainability with impact? Do you need help developing a sustainable transition strategy? As Australia’s leading recruitment and search consultancy specialising in Health, Safety, Environment and Wellbeing, we can connect you with HSE specialists on either a permanent or temporary project basis.

Or, if you are a WHS or ESG professional with experience in this area, we can connect you with a future-forward organisation and others innovating in this area.