Ewan Donald, engineering business Ipsum

Kevin chats to Ewan Donald, the head of Environmental, Sustainability and Governance at specialist engineering contractor Ipsum, about building an ESG function from the ground up, the real-world challenges of decarbonising a large fleet, and how to adhere to clients' ESG expectations.

What is Sustainability Insiders?

In each episode of Sustainability Insiders, Kevin Hegarty speaks to business leaders to find out how they're making their companies more sustainable. In season two, Camilla Smith, from specialist sustainability recruiter Sustii, shares what candidates and employers are looking for in this fast‑growing talent marketplace. Ian O’Donnell MBE, from the Federation of Small Businesses, talks about the challenges - and opportunities - small businesses face in operating sustainably. And one of the sector’s standout leaders, Mary Aladegbola, breaks down how she navigates net-zero challenges across NHS England. Other guests include ESG lead Ewan Donald from engineering business Ipsum, and Graham Duxbury, Chief Executive of Groundwork. Hopefully each of their stories will inspire you on your sustainability journey, and give you the ideas and tools you need to make your own company more sustainable in the very near future.

Kevin Hegarty: 00:04

And welcome to Sustainability Insiders, the podcast that talks to business leaders to find out how they're making their companies more sustainable. I'm Kevin Hegarty and I work at Cadent, a UK energy network that's on its own sustainability journey. In this episode I'm joined by Ewan Donald, the Head of Environmental, Sustainability and Governance at specialist engineering contractor Ipsum. In our chart he tells me about building an ESG function from the ground up, the real world challenges of decarbonizing a large fleet, and how to adhere to clients' ESG expectations. Hi Ewan and welcome to Sustainability Insiders our podcast.

Ewan Donald: 00:46

Hi Kevin, I'm excited to be here.

Kevin Hegarty: 00:48

So when you and I were introduced Ewan, there were just so many topics that we discussed. But the one thing that I wanted to start with was the fact that you are quite new into the business, into Ipsum, and where you work, and if we can explore that a little bit further, explain to me about what Ipsum does and how you have started your role and how you've built that

Ewan Donald: 01:06

up in its early stages. Yeah. Happy to. So Ipsum is a specialist engineering contractor working across water and power sectors. So on the water side, they predominantly maintain sewers, so clean sewers out on both private and public networks.

Ewan Donald: 01:20

And on the power side, we just about do everything, to be honest, you can imagine, with public and private power infrastructure, so supporting pickup over headlines, building battery storage facilities. You name it, we do it. As a contractor then, it's an interesting position to be in with respect to ESG, and it's fair to say the business has only been as Ipsum since 2001. We are owned by a private equity company called IK Partners, and as part of their investment, that the relevance of ESG became more and more important. And as a contractor, we're then in a very interesting position because we don't own the assets.

Ewan Donald: 01:52

We don't own the sewage facilities. We don't own the overhead lines. Our role is supporting those putting those things up. But increasingly, the expectation from our clients is that we're doing that in a way that's environmentally sound, you know, socially responsible. And that's why this role really came to be.

Ewan Donald: 02:10

So I joined the business eighteen months ago in June 2024. Prior to that, there had been attempts to sort of focus on ESG, but the business just wasn't really big enough or ready enough for it, it's fair to say. It's grown a lot through acquisition. So I was coming in really, to to a large degree, to a bit of a blank slate, I think it's fair to say, with a lack of real clear strategic vision on what the business was trying to achieve, what ESG meant for the organization, and how to address some of the big challenges. And as a contractor, probably the single biggest challenge, I know lots of businesses face this, is certainly with the fleet.

Ewan Donald: 02:42

We have over 500 fans, over 50 specialist HGVs for cleaning sewers, and they run on diesel. And we're going all over the country, and that produces a lot for emissions. So coming in early, the focus for me was in really understanding that footprint, if you like, and understanding where are our challenges. And what I performed was something called a double materiality assessment, which is actually way beyond what a business of this size needs to do. It's a requirement for much larger corporates.

Ewan Donald: 03:12

But I thought it was an important exercise just to understand what matters to our clients and what matters to us in terms of risk exposure, in terms of revenue generating opportunity. So I performed that assessment, and it's very clear that through that, there are some things that really matter to our clients that we can't really influence. For example, biodiversity, which is super important. But for us, we don't own any assets. It's very hard to make a material difference in that space.

Ewan Donald: 03:36

And there's some clear areas where there was a lot of overlap, emissions reduction or greenhouse gas reduction, depending on how you want to talk about it, reducing the impact of climate change were clearly really focus areas for both us and our clients and a key area to start. But yeah, so when I came in I did that assessment to really understand where to get going.

Kevin Hegarty: 03:53

What sort of lessons have you learned from those first eighteen months Ewan that you think, I wish I'd done that a bit sooner perhaps, or that took me down the wrong avenue, I appreciate things can be different for different businesses, but what sort of lessons have you learned that maybe you can share?

Ewan Donald: 04:07

When I joined the roles, I actually came from a consultancy business with KPMG for ten years, so I had a good idea of what best practice would look like, But one of the things I was determined not to do, and I think what a lot of ESG functions do become, is a reporting function. So the role is just all about gathering data and pushing data to people and telling people how great you've been. That for me wasn't a role I wanted to do. I wanted to actually make a difference. However, in being so adamant that I wasn't gonna do that role, I probably didn't focus early enough on the data because, unfortunately, whatever it is you're trying to do in ESG, data is so fundamental.

Ewan Donald: 04:39

One of big lessons for me was to really get under the skin of the business earlier, I think, have been beneficial. Not least, for example, our waste practices, being able to really understand what waste we're collecting and where, what emissions we have and where. All of that is essential to then be able to show you're making progress for a start and to understand how to reduce. So I my first thing would have been I wish I'd probably been more focused on the data earlier. First, I've got a really good grasp on that now, particularly emissions.

Ewan Donald: 05:05

I focused on that pretty early, but I think that would have been a key one to focus on. But what I think was really important and what we did do was getting the business on board. This sector, you could probably imagine what it's like, right, we've got people on a range of different salaries, but a lot towards the minimum wage sort of line. Typically men, they're coming in, they just wanna do a job and they wanna go home. People have come through the ranks, particularly engineers, who then end up leading those operations and still have that kind of mindset.

Ewan Donald: 05:30

So getting the organization to understand and care about this topic can be quite challenging, and a lot of my focus was spent really early on in getting the exec team bought in, that this is an important thing that we need to do. And I feel like that was very effective, and I feel that they feel like the buy in, at least from the very top, is good. I think obviously what needs to then increase is how that filters down through the organisation, through middle management, and to everyone doing their day to day job. My sort of ambition though, I guess, is to try to put controls in place or change practises that mean you can't help but do the right thing. I think it is really important you have people with you, but I think we also have to respect that by hook or by crook, some people aren't just gonna wanna do something because it's the right thing to do.

Ewan Donald: 06:14

So if you can make the right thing to do the only thing they can do, for example, by giving them an electric van or ensuring all of our waste goes to a site where it's segregated and separated out and recycled appropriately, then it kind of removes the pressure on on the individual. That's not safe. There's obviously individual responsibility. You've got to get that balance right. But, yeah, the focus has been more on trying to get the controls right and focus on those things we can control so people aren't having to make the decision, if that makes sense.

Ewan Donald: 06:39

Topics like diversity and inclusion, I think are actually very difficult for this kind of business because of the sector we are in. It's challenging to attract female engineers, for example, or that or some of the diversity that I believe the business needs, but it's also quite easy to just say, oh, there's no female engineers and not do anything about it and not focus on it. So finding the things you can influence and make a big difference in, I think, is important. Not to ignore the other topics, but push where you can. And certainly in this business, there is a desire to decarbonize.

Ewan Donald: 07:09

There is a desire to make that step. Pick your battles. Focus on the things where you can make a big difference that are important would be my advice.

Kevin Hegarty: 07:16

That's fascinating, isn't it? And one thing that jumped out at me straight away was that ownership that you feel within the business and how everybody must play a role within the business in order to achieve where you need to be. So as you say, it's how, you know, in some cases, the organization I work for has thousands of engineers working for us, and it's been absolutely clear for people on different stages of their career ladder, and like you say, it can be a challenge sometimes. And understandably people come in and just want to do a job and go home, and that's the right thing today, you know, go home to their families and enjoy life outside of work as well, but while you're in work, it's building that passion and building that understanding, isn't it, to deliver against some of these key things. And like you say, some of the simple things can be down to the fact that you supply the tools and machinery where they've got no choice, and that brings us a nice segue onto talking about fleet.

Kevin Hegarty: 08:06

And I know you like, as you said before, that you have 500 vehicles going to the Far North Of The UK down to the Far South, and what is the challenge then? What are the what is the big challenge that you're currently facing with decarbonizing that fleet of vehicles?

Ewan Donald: 08:20

That's a great question, and I guess we tend to think of it in a couple of categories, so if we think about the HGVs, so these are large sort of recycler units. They've got sort of a I try and think I'd describe it, like a drainage sort of sucking unit on the back, and they'll be they'll pull up to a sewer, for example, and extract a load of liquid from that sewer. It needs to run all the time. There is just, at the moment, is just no viable sort of electrified option for that vehicle. The ones that might exist will do 50 miles and that you can't run them all day, so it's just not even gonna do the job.

Ewan Donald: 08:51

And the key thing is the job needs doing. There's clearly a huge amount of media narrative around polluted waterways and such, like the sewers need to be maintained, and so these jobs just need to be done. And so an electrified version doesn't exist. Hydrogen, it would be the obvious nice solution in terms of a really clean fuel. We don't really have that hydrogen infrastructure in The UK at the moment, and so the real risk, and we've seen this with other businesses, is you end up for stranded asset that you can't get to where it needs to go.

Ewan Donald: 09:17

So at the moment, there isn't a fantastic route for that vehicle. So what we're exploring is a is effectively as a stop gap until the technology catch catches up in honesty, is using something called hydrogenated vegetable oil or HVO. Now that has its own problems, particularly in how it's sourced, so our focus is on getting sustainable one where we have the certification that is produced from used cooking oil and has come from Europe, rather than from the destruction of palm oil or plantation or from other another vegetation source, typically from somewhere slightly more far flung perhaps in in the Far East. So our our focus is getting the certificate to prove it has come from Europe, prove it's used cooking oil, and we are currently trialing using that in our HGVs. And I say trial, it's not that the fuel isn't tested.

Ewan Donald: 10:04

There has been a lot of evidence. It is used in McDonald's delivery trucks all over the country. It works. There's not a question that it's not gonna work, and it does replace the emissions from diesel really effectively. It's more getting our people used to it, you know, getting the fueling facilities installed on-site, and we just wanna do a proof of concept to make sure everyone's comfortable before we then make the investment to actually deploy fueling facilities at our depots.

Ewan Donald: 10:29

We think there'll be the big challenge of HCO is there's there's a big cost implication. You're talking 10 to 20% more than diesel. That is a cost that our organization is prepared to swallow for the decarbonization benefit it brings. What I'm expecting to see is actually that cost really narrows because we'll see potentially a bit of vehicle efficiency gain. The requirement to use AdBlue is reduced, which isn't a significant cost, but will help.

Ewan Donald: 10:56

The maintenance should be easier because it's a cleaner burning fuel. But on top of that, there should be a real efficiency save if we can get the vehicle back to the depot, we fuel it overnight or first thing in the morning, and it goes out and does all its things and comes back, and the same process happens. That's avoiding a detour potentially to a petrol station where they've got to then sit for twenty minutes and fill the vehicle up during work time, if you like. So I think while on the face of it, there's a lot of cost there, particularly of installing a fueling facility, my feeling is that we'll end up getting some of that back in terms of real world efficiency. As I said, we're in the process now of just trialing that, and then next year the focus will be on installing that fuelling facility across a number of our depots, and there's probably five key water depots which we'd like to focus, and so for the next few years the tent will be to have this in every single one of them.

Ewan Donald: 11:42

That's the HGV, so they're a bit of a challenge, but we think we've got an at least an interim solution. I'll do a brief in solution talk about company cars. We've already moved to a 100% plug in hybrid or electric company car fleet. My big focus is on getting that to a 100% EVs as soon as we can. Partly that is going to be through encouraging drivers when they have that choice to pick an electric vehicle, to explain how to do that and make the process easy, follow this link to get a charger installed at home.

Ewan Donald: 12:11

Here's how cheap, how much money you can save, not just in the reduced fuel cost, because you're charging at seven p a night, you can save a huge amount of money with electric vehicle, but also to do a tax, you pay £50 a month compared to £400 in a month on a company car by going pure electric. So we think we can push that up to near a 100% over the next couple of years, so that's a focus, but an easier one. The big challenge then really is in the van fleet. Now electrification, in my opinion, is the right solution for vans. I don't think there is a technology we're waiting for here, but the problem is, with electrification being the viable is the right solution, is that we've still not really got a vehicle that goes far enough.

Ewan Donald: 12:49

That becomes a real challenge for us. Now we've done a really extensive piece of analysis looking at our vehicle telematics to understand how far are our vans going. I'll be honest, when I first had this conversation with the business, every contract manager came back to me and said electrification is impossible, our vehicles all travel 300 miles a day, they have to run ancillary equipment, there's absolutely no chance we can do this. When we looked at the data, we saw a very different picture. About 50% of our fleet does routinely travel more than about a 180 miles a day.

Ewan Donald: 13:18

Now that could be multiple jobs, but about 50% are above that number. But then 50% are below that number, with something like 10%, which is an enormous number, constantly being below a 150 miles a day. There are some things we can go after there. The challenge then in going after some of those is the ancillary bits that sit around it. So most of our engineers, particularly on our power side, take our vans home.

Ewan Donald: 13:45

So you're then looking at home vehicle charging, and it still amazes me that we're kind of this far into the journey, and no one's cracked the what if you've got a tenement house, you don't have off street parking, how do you charge the vehicle? And the reality is that is a problem for us. We need driveways. So that 10% is easy to go at, Maybe only 50% of people even have a driveways as a starting point. On top of that, we then convince the person to park their van on the driveway rather than their nice personal car or whatever else they might want to park on their driveway, and also really ask them to move to a electricity tariff that's beneficial for us, if we're being honest about it.

Ewan Donald: 14:24

We want cheap overnight charging. We've even found a solution where we can do the reimbursement of payment for an individual, so we're free directly for that electricity bill, so we don't have to get into the claiming expenses back for electricity consumed, so actually we find solutions for lots of the sort of technical challenges, if you like, but we just then need to overcome the reticence in the business perhaps to adopt these because of the risk that they need to go to a job and they can't make it and have to go in public charge, but also some of those physical challenges around driveways and other actions, so that for us is a real big focus, and over the next couple of years we just get a number of vehicles, need to test that out and we need see where it works. And of course as part of the work we've done, we found certain of our contracts that that look like it would work really well on, because they tend to do more local work, others are you know more metropolitan based again, could be more effective, but there's others, just the example I gave earlier on maintenance for sort of repair work and emergency callouts where I think we're a long way away from it being truly viable.

Ewan Donald: 15:27

And part of that test, you know, I talked about the electric vans, there's loads of them available now, every manufacturer and his dog has got an electric van, and their specs very different, their loading capacity is different, their performance is very different, we're gonna spend the next two years really getting to grips with what the best models are. I guess my final kind of couple of comments around electrification would be the business case is really attractive if we can make that home charging model work. It's really unattractive, and I think this is something that needs addressing, if you rely extensively on public infrastructure. You could be paying 79 p a kilowatt, some places at 89 p a kilowatt if you're fast charging on a motorway. That is a ridiculous increase compared to the overnight charging price.

Ewan Donald: 16:08

You're talking 10 x increase compared to what you pay at home. You're talking probably what, three to four times what you pay on a daytime tariff at home, and that I understand why it's that, the cost of putting that infrastructure in, but it's far and away different from, for example, motorway filling a diesel versus local filling a diesel. You talk about 10%, 15% there rather than 500% or whatever. I think that has to change. When that starts to change, I think then it makes it more attractive to be able to just use public charging facilities more if they're available.

Ewan Donald: 16:42

Of course, being the flip side to that, public infrastructure still needs to improve. So that's that's certainly that is the challenge for the electrification space. But I genuinely do think it's the right way to go. As I mentioned with cars, for me, most people in the country, presuming they have a private driveway, should be in electric vehicles by now. When you're talking 300 mile range, there are very few people who are gonna be on a daily basis exceeding that.

Ewan Donald: 17:05

And when you come to doing the odd long distance journey, I drive an electric car. We go all the way up to Scotland in it where my parents live. That's a 350 odd mile trip. By the time we stop, supercharge the car, it's ready before we are. We stop, get a kids dinner, it's ready to go.

Ewan Donald: 17:20

I do think that obviously the hurdle is the initial upfront cost, but I do think the range anxiety has perhaps become overdominated in media narrative. I think it's a very real thing for vans, but for cars, I do think we've reached a point where that's no longer true. Clearly, the big thing we need to get to is the vans are getting closer to two fifty, 300 miles reliably. And when we get to that point, I think a lot of what I've just talked to you about starts to fall away and opens up. So my hope will be our next refresh cycle is sort of 2028.

Ewan Donald: 17:49

I'm optimistically hoping we'll move about 20% to the fleet. It might be a bit less than that, but that's what I'm hoping. But when we come to 2032 for the next cycle, I am hoping that number is more like sixty, seventy, 80% because the battery tech has moved on that much, that it's just no longer even a consideration because really even 2032 you should be touching on the point where diesel's getting phased out, and certainly 2036 you shouldn't really be able to buy a diesel van, so we need to make it happen.

Kevin Hegarty: 18:16

That is such a lived experience for so many people listening to this podcast, I'm absolutely sure, and I can say, give you an example just from Caden where I work is that being the biggest gas network we have 1,000 vehicles in just our emergency responder fleet which are like small vans effectively, and as you say we've got to make sure that we can be able to get, as part of the emergency response role that we do, we've got to be able to get to an emergency, a gas emergency within an hour of getting the call, and we've got to be sure that vehicle can get there, is on the road, has the capability to be able to be recharged if it needs to, can carry the equipment that it needs to carry. There are so many variables and considerations in that, and we're so proud of the fact actually, and I'm proud of the company that we've already electrified half of that fleet, but taking it further is now the big challenge, so we fly to think we're leading the way, but like you the lived experience of that is a challenge, but one that we're keen to tackle.

Kevin Hegarty: 19:14

And it makes me think, you've introduced another topic you in that we also demand that of the suppliers that we have that work for our business, we have a as a big business, we do contract out a lot of our work, and we want to bring our supply chain with us on that journey, so as an organization like Ipsum that is working for another organization as a contractor, talk me through some of the challenges that you face and how you overcome them already within your eighteen months towards reporting into the company that you are being contracted by and meeting their expectations?

Ewan Donald: 19:51

I cannot emphasise enough how important it is that large organisations play that role in terms of setting demanding targets for their supply chain effectively, because it is a key way. And for me, it has been a key instrument to get everybody on board that we need to get something done. So we have actually committed to setting science based targets, which you might be familiar with, Kevin, which is a very robust framework, the most robust framework out there for approving a decarbonization path that's aligned with 1.5 degrees, the Paris Agreement. So we've committed to that. We're in the process of setting that target.

Ewan Donald: 20:24

So big organizations play such a crucial role to help drive the change through the supply chain. And look, I really encourage that. But plenty of people in my business will think differently, but for me, I'm passionate that we've got to solve this problem. We have got to solve this problem, and big organizations play a key role in forcing that down. My big observation would be, I think what there needs to be a bit more of from large organisations is both carrot and stick, where they set an obligation that you must have science based targets or a proportion of your feet has to be electric, they need to check.

Ewan Donald: 20:56

They need to check, and they need to punish, support, etcetera, that business to get to the right place. But on the carrot side, it should be I don't know. Could we give you a bit of an uplift because you've made that change? Could we award more contracts to you for doing that? And I know some organisations are there, and I've seen that in in some of the tendering, but I think there does need to be a bit more of a carrot for businesses to be like, yeah, I understand.

Ewan Donald: 21:20

You're gonna give me more contracts because I'm gonna do this and commit to it for you, and let's work together in a partnership rather than not perhaps having some of those incentives. But, yeah, I think in terms of managing those requests, it can be hard keeping track. We we service lots of different clients both in the public and private sector. The different requirements and contracts, vary quite considerably, and the reporting requirements vary quite considerably. What I've certainly seen, which has been very helpful, is particularly the large businesses, so FTSE 100, two fifties, there's large corporations, they typically just ask, go and complete EcoVadis or CDP or something like that, which were recognised of external frameworks through which to report emissions data, and then they basically you just pass the data through that platform onto that company.

Ewan Donald: 22:11

There are other platforms that do it, plenty of them, and generally that's very helpful. And generally to be fair, the reporting demand tends to be on emissions numbers, and that's that's not too challenging for us. We can manage that. Where it gets more difficult is, for example, really specific numbers to do with a contract, like what volume of waste have you generated and how have you processed that. Those are things that we're still trying to build the right processes around to enable us to consistently report that particular contract level and and other points around about that topic can be challenging, but certainly emissions I find quite straightforward and I find where large organisations use these reporting platforms it's it really is quite simple.

Ewan Donald: 22:48

We have to do our emissions numbers anyway with that size of a business, it's just a case of then sending it on to them, it's super easy. But yeah, the key thing is that demand needs to be there, I think.

Kevin Hegarty: 22:57

Ewan, thank you so much for your time, it's been fascinating talking to you throughout the course of this podcast, you've shared so much insight from it feels like you must have been there for a lifetime but you've only been there for eighteen months at Ipsum and again thank you very much for joining us on the podcast and being so open about what you've learned so far.

Ewan Donald: 23:12

Not a problem talk, really enjoyed it and great to speak to you.

Kevin Hegarty: 23:19

Thanks for listening. If you've enjoyed this episode of Sustainability Insiders, please give the show a follow and a review in your podcast app. If you'd like to be a guest on a future episode, send an email to [e-mail]. Speak to you again soon.