Rules of engagement

Written by: Geraldine Faulkner | Published:
Terry A’Hearn, chief executive of the Scottish Environment Protection Agency

The Scottish Environment Protection Agency’s boss, Terry A’Hearn, tells Geraldine Faulkner how he intends to make more businesses comply with regulations

When you have been a globe-trotter like Terry A’Hearn, chief executive of the Scottish Environment Protection Agency (SEPA), who has worked in Australia, London and, more recently, in Northern Ireland, you tend to absorb a multicultural and collaborative approach to business. However, making an effort to understand where businesses are coming from does not mean the chief executive is in danger of being a soft touch – quite the opposite, in fact. The regulator is always just beneath the surface.

When A’Hearn is asked what are the most relevant lessons he has learned from his previous roles and which he brings to SEPA, he doesn’t hesitate (even though he was up until 5am that morning following the events of last month’s snap election). “I think the focus on bringing business success and environmental protection together is absolutely paramount. Businesses have to transform the way they work to use fewer natural resources, create less pollution and produce less waste. Our brief is to help people adjust,” says the CEO, nicknamed ‘Mr Watchdog’ by the Herald newspaper. “The challenge is so big – especially as we are using three times the planet’s resources – my message is that compliance with environmental regulations is non-negotiable.”

He stresses that while SEPA aims to help businesses be successful, if the only way to meet the legal standard is to add costs and reduce revenue, then ‘so be it’.

“This is not an agenda that people can get away with and they need to accept this approach as it’s very sensible. If there’s a way to help people go further and that makes money for them, we’ll help them achieve it. The critical thing is when people sometimes go soft on compliance; this is the absolute opposite to our intention, as compliance is not up for negotiation,” he reiterates firmly.

This doesn’t appear unreasonable, especially in view of the Scottish Government’s commitment to ambitious climate change targets of a 42% reduction in greenhouse emissions by 2020 and an 80% reduction by 2050. This includes a ban on food waste to landfill by the end of 2020, which is expected to help reduce emissions.

Cutting food waste in Scotland

Since A’Hearn’s appointment in January 2015, he has also seen the implementation of the national target, introduced by former environment secretary Richard Lochhead, to cut food waste in Scotland – reported to comprise around 1.4 million tonnes per annum – by a further 33% by 2025.

Since January 2016, any Scottish business producing more than 5kg of food waste a week has had to collect the material separately under the Waste (Scotland) Regulations.

However, the Environmental Services Association (ESA) has warned that the requirement has led to more contamination due to businesses that “would not have ordinarily participated” being forced to do so and subsequently not separating the material in the correct manner.

Jacob Hayler, executive director of the ESA, maintains there has been a low uptake due to a lack of enforcement, plus large parts of the country are exempt from the regulation, which he says affects efficient planning of collection routes.

How does A’Hearn respond?

“I would say that when you have a regulation and when it’s about something that can be difficult to manage – for instance, the tightening of air standards on factories that already have regulations on their stacks – it won’t be so hard to achieve, but when you’re talking about something that needs significant adjustment, it takes longer to accomplish,” says the pragmatic chief executive before emphasising the point he made earlier: “Our aim is to help businesses to comply. Ultimately you have to make sure regulatory requirements are fully met over time, and we will be working with others to ensure it works. Our brief is to help people adjust and make things last.”

When challenged over the fact that SEPA data for 2014 showed that less than 320,000 tonnes of food waste was managed either by local authorities or the private waste management sector, A’Hearn responds: “I will draw the same parallel with air standards; you meet it by what happens in the factory, namely with systemic change, and it will happen over time. People can sometimes get hung up on whether a target is being met quickly or slowly. By using systemic change, you get there and the change lasts.”

Collaboration

It is, of course, a delicate balancing act being a regulator and yet working to adopt a more collaborative approach with the business sector.

Using the new powers given to SEPA in the Regulatory Reform (Scotland) Act 2014, the environment protection agency launched its new regulatory strategy, entitled One Planet Prosperity, in August 2016. This aims to give the agency a wide range of regulatory powers as well as giving clearer and more collaborative aims.

One of the aims of the regulatory strategy is to get businesses to sign up voluntarily to a Sustainable Growth Agreement (SGA).

Stirling-based manufacturer Superglass Insulation was the first company to sign up in March of this year. The SGA commitments target a reduction in waste, water usage and CO2 emissions from the Superglass facility while seeking the use of technologies to increase the use of renewable energy sources. According to the Agency, SGAs represent a formal agreement with SEPA, entered into on a voluntary basis by regulated businesses, with the focus primarily on practical actions to deliver positive environmental change. When the SGA was signed in March, A’Hearn said: “This is a marker on a journey and not the finish line.”

Widening the scope of SEPA as well as its approach means a different way of thinking, according to the chief executive. “To make big gains, you have to go back up the supply chain and reduce waste. It is a different way of thinking. Instead of using a narrow set of regulatory tools, we have to think about ‘how can we work with supply chains, people who finance a project? How do we get all the leaders together?’ We will be trying to use a much more comprehensive approach that assists people to get better results.

Tough love

“What I would say to businesses though is that I won’t be disingenuous. We are the environmental police, and if their behaviour demands it, we will enforce behavioural change quickly and powerfully, but if businesses want to reduce their waste, we will help them. We can take either approach, it is up to them. It can either be the regulatory kick up the backside or the regulatory handshake.”

Like other public sector bodies, funding restrictions are also said to be creating issues for regulators. SEPA, for instance, has had to deal with a £2.4 million cut in 2016 (about 7%). At the time the cuts were announced, A’Hearn said they were “manageable”. He was also quoted as saying that “it is better to set ambitious targets and nearly get there than to set unimpressive ones and get there”. Does he still feel the same way?

“Like every leader, I prefer not to have cuts; however, I take a pragmatic approach. I think I inherited a really good organisation and we have the ability to absorb these sort of cuts and find new ways of operating. It means employing a better way of regulating; a more efficient way of regulating. I appreciate the government has priorities like education and health to consider,” he reasons.

Finally, how are things going with regards to Scotland’s Making Things Last – A Circular Economy Strategy, which was published in August 2015?

“We do have a long way to go, but one of the reasons I competed to get the job was because Scotland has ambitious environmental targets, and has a good track record to start to deliver things on the ground. Getting from three planets to one is a challenge, and while Scotland is big enough to be serious – it offers great universities, great industries and world-class innovation – it is small enough to be nimble; I have seen great achievements on the CE. But to say we’ll have it in a year or two is ridiculous; you have to think differently, and it will only make an impact if it makes a difference on the ground.”

Terry A'Hearn CV

SEPA chief executive Terry A’Hearn has more than 20 years’ experience in the environment profession, having held senior roles in Melbourne with the Environment Protection Authority in the Australian state of Victoria, in London with the global consultancy firm WSP and, most recently, in Belfast as chief executive of the Northern Ireland Environment Agency, before he joined SEPA in January 2015. In all this work, A’Hearn has focused on bringing environmental and economic aims together, supporting business and social innovation and getting tougher with the worst environmental performers. He is a senior associate at the Cambridge Programme for Sustainability Leadership, a member of the advisory board of the Global Footprint Network and a Fellow of the UK Institute of Directors.

Five things I can't live without...

Watching football: I am an avid football fan and a life-long Stoke City supporter, probably one of about five from Australia!

Going for long walks: My wife and I love going for long walks, whether in the countryside or exploring cities.

Coffee: I hail from Melbourne, which has a huge coffee culture, so I search out the best cafés wherever I find myself.

Travel: My wife and I love travelling and have now seen more of Europe than we have of Australia.

Good books: I hate being caught without a good book to read and, being very people-focused, autobiographies are my favourites.


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