Business spotlight: Biffa pushes for a sustainable recovery
8 September: One of the UK’s leading waste management companies, Biffa has emerged from the pandemic in a strong position. ICAEW Insights speaks to CEO Michael Topham about its focus on sustainability and the contribution it can make to the economy.
Planning out the delivery of essential services during a pandemic, practically overnight, is no mean feat. Of Biffa’s 8,000 employees, the vast majority work in frontline roles. The company had a responsibility to deliver their services without putting its people at risk.
“We had to ask ourselves: ‘how do we carry on?’” Biffa CEO and Chartered Accountant Michael Topham tells ICAEW Insights. “We were quite fortunate in one regard, in that the majority of our services are either provided outdoors in the community or big, well-ventilated areas.”
Managing these sudden new safety considerations involved a lot of logistical planning, such as changing the way crews were formatted on the trucks. It was an example of true collaboration, Topham says, between unions, corporations, regulators and customers.
“There was a lot of very quick collaboration and the long and the short of it was that we were able to continue to do almost everything we needed to do,” he says. “We had to because having the bins emptied is an essential service.”
Liquidity and funding during COVID
While the Group’s Municipal business remained resilient its Industrial and Commercial business was severely impacted, with so many of its business customers across sectors such as leisure, hospitality and retail, forced to shut down. Biffa takes a measured and careful approach to its finances and maintained significant amounts of financial liquidity before the coronavirus hit. “We had about £150m of undrawn liquidity. So we knew even if this lockdown had gone on for the best part of a year, we would have been able to withstand it.”
The company also decided to raise an extra £100m in additional funding. “We wanted to have the flexibility to ensure we could continue to invest and take advantage of the growth opportunities that we expect to arise out of the crisis.”
Looking to the future
With a strong foundation in place, the company is now looking to the future. Coronavirus offers businesses and governments across the world a chance to ‘build back better’, Topham believes. Biffa is pursuing a 10-year sustainability strategy that runs through all of its operations, which aligns with the UN’s Sustainable Development Goals.
Initially, that involves more acquisitions across its Collections business, to create a bigger platform to build a more sustainable waste management infrastructure. This will put the company in a better position to invest in new technologies such as electric vehicles, Topham explains.
“We're starting to do it in our densest urban routes. Eventually, it will be rolled out across the country. It's a really great strategy, will give good returns and it's great environmentally.”
A lot of the UK’s recycling is currently done overseas, Topham explains. One of Biffa’s aims is to create the ability to process more recycling in the UK. The business just opened a PET plastic recycling facility in Seaham, Co. Durham, capable of processing 1.3 billion plastic bottles a year. Through a joint venture with US partner Covanta, Biffa is also investing in energy-from-waste plants to process waste that cannot be recycled. “It helps create a more domestically-focused and more sustainable, business model, and it's what the UK needs,” explains Topham.
The strategy commits Biffa to reduce its carbon impacts by 50% over the 10 years. “I was quite clear that this should be a 10-year strategy, not 25 years. We've already reduced it by 65%, from 2002 to 2020. We need to be very, very clear about what we want to achieve and measure it very clearly. If we meet our targets, it will set us up to achieve net-zero.”
Achieving sustainability goals
Biffa’s careful approach to managing its finances and operations puts it in good stead to achieve its sustainability goals, Topham explains. The company has a ‘balanced scorecard’ to manage the business. “We call it our balanced business plan. It’s got five pillars within it, of which sustainability is one. This is cascaded down through the various business functions and divisions. It's all good practice around the congruence of goals, but also of making sure that financial, profit-related targets sit alongside safety, people, sustainability and customer service.”
All of this could benefit the UK from an environmental perspective, but it could also contribute significantly to the UK’s economic recovery, says Topham. Biffa’s investments in recycling infrastructure will create jobs and encourage investment elsewhere.
“It's very clear to us that the things that we were doing before and that we have laid out in our plan remain as vital and critical to the UK’s journey in terms of climate change. We are definitely on the right track.”.
Are you professionally ready to mitigate the risk and maximise the opportunity of climate change? Visit the ICAEW Climate Hub for more details.