In conversation with... Richard Kirkman, Veolia | White & Case LLP

Yes, hello, Kate. I'm really looking forward to this.

My career in this area started in a really different place. I did an engineering degree to start with, and then I got into manufacturing, but I didn't really like it. So, I went back to university and studied environmental science. Then, when I came out, I was looking for a global organization making a difference. Veolia struck me as the right kind, and I joined their energy arm. We were transitioning away from coal and oil in the UK. Veolia is a 170-year-old organization. We had our first water contract back in 1853 from Napoleon to treat water in Lyon. That excited me, trying to transition away from fossil fuels and having water contracts. Then there was waste management, so I studied the circular economy again, which is very relevant to water and waste. I got a PhD in how to put policy in place to make the circular economy happen. All those things inspired me to try to make things happen and get stuff done in this area. That's what Veolia is good at, and what I'm now doing in Australia and New Zealand, focused on water.

We've just launched our next 4-year strategy called Green Up. It's very purpose-led. We went out to all stakeholders—clients, suppliers, local communities, local authorities—to discuss what our strategy should look like. It was hugely fruitful. We came out with a bottom-up strategy that delivers huge change over the next 4 years. Australia is one of the zones where the group wants to invest and fast-track, probably because of the changing policy landscape. Our purpose, stakeholder needs, and policy and strategy of the zone are coming together.

There are a number of dynamics across Australia and New Zealand. One is the pressure on water resources, which is accelerating due to natural disasters and aging infrastructure. We have aging infrastructure and more pressure on water resources. The good thing is there is a way through with an investment plan to rebuild infrastructure. There is a renaissance of desalination plants coming; it was 20 years ago that many were built, and now we can see them in the pipeline. We're involved in a few large developments. It's exciting that in 10 years, we'll have different infrastructure. The other dynamic is the recycled water dilemma. Everyone knows we can produce recycled water to put back into dams cleaner than what we take out. But politically, it's difficult to put those plans in place. We have assets around the country that can do that but haven't switched them on. The time will come as people see droughts and cost of living pressures change political views. We're not there yet, but well prepared.

You're referring to our ecological barometer, which we surveyed people globally and in Australia to see what they think about climate change, if it's man-made, and what should be done in energy, waste, and water. It was enlightening that there is genuine and growing concern. There is an increase in this geography for people feeling something needs to be done. That's fed into the changes in investment we're making because people's views are important. They are voters that lead to political will for policy and investment. Over the past three or four years, the direction of travel is accelerating at a political level to make Australia more sustainable.

I don't think there's an emerging water crisis; there's always been a water crisis because you're always a few months away from not having any water. It's about staying on top of it and long-term planning for assets, as it takes 10 years to put new infrastructure in place. There is a transition, but it's been ongoing. We need to reduce reliance on surface water. Climate change will change dependency on resources. We'll need more desalination plants and seriously address recycled water to make it more palatable to everyone. Those are the two big ones: desalination and recycled water. Also, industry uses a lot of water and needs help to clean it up before it goes back into water courses. That's a huge commercial opportunity. If we're going to solve climate change, we'll need more uranium for nuclear power, resources from mines for electric vehicles and solar panels. Those resources will create value to clean up the water used in extraction. So, the three critical areas: desalination, recycled water, and cleaning up industrial waters.

I think we should absolutely consider all stakeholders: media, local authorities, central government, communities, technology providers, everyone in the supply chain. That's why when we formed our strategy, we invited everybody to talk about it to get every view. All stakeholders are relevant for energy, waste, or water. Everybody's involved, and you don't need many people to stand up against it to disrupt national plans. We've got a wide coverage of who we need to convince and get on board, so that whoever's in power politically, the plan remains the same because it takes so long to develop.

Investment in water assets, as with waste and energy, is never smooth and even over a long period. There are periods of investment, and then you need to manage those assets until the next wave. The positive is we're at the point where we need the next wave, and there isn't a shortage of capital for these utility assets; they're high-quality investments. The issue is getting projects off the ground due to complexity in procurement, delivery, technology choice, and the time it takes. Sometimes environmental factors change during procurement and construction. That's the real challenge: the length of time projects take. For infrastructure projects, you don't want to build a road and find more cars than expected. It's a very political area, and that's the main challenge. In terms of investing properly in assets during their lifetime, we're obsessive about maintaining facilities to operate for the full period required. That's the art of what we do: ensuring high-quality water production regardless of investment. The last thing we want is failure in such a critical resource.

The core technology at a water treatment facility normally doesn't deviate, but enhancements take place over time. It's evolving maintenance and upgrading, for example, on a desalination plant. We continuously invest throughout operation and can adapt and upgrade. Regarding new pollutants, microplastics have been around for 30 years; it's new that we're talking about them. We may need a way to deal with them differently, but it's yet undecided. That's the reason it's not dealt with. I have no doubt in our ability to solve technical challenges. Again, that's the heart of Veolia: looking at water technology, understanding what's possible, and implementing it. Most things are possible if we have the will.

In this long-standing field of water management and treatment, every possible financing method and arrangement has been tried. Not to say we won't recycle some previously used ones. What we like to see is that the operational part of the project gets a lot of attention because that's where we can add the most value in ensuring over 30 years, the absolute best quality and lowest cost products are produced. Most procurements are very mindful of that operational period. So, whatever the financing methods, the money is there for water treatment; people are ready to invest. What's important is what the operational period looks like.

Probably the most notable is the advent of generative AI, which has come to the fore in the last 12 months. We've been talking about digitalization, AI, and machine learning for the past 5-10 years, but overnight it's become available to all users. A day doesn't go by without me receiving emails saying they can solve all problems with generative AI. We've quickly concluded this is a data-led solution. We've been investing in collecting and storing our data for the past 10 years securely and structurally, which enables us to use this new technology for gaining insights and deploying actions. That will make a big difference, not only in water, but because of the long-standing data we have, it's going to be powerful. In terms of physical technologies, we always have something on the horizon. We have a large water technologies group at Veolia. One I like is the barrel, a desal barrel, which is a plug-and-play desalination technology from Sidem, part of Veolia. It has a smaller footprint, can be quickly deployed, and desalinates water better. Existing water treatment technologies are robust and unlikely to become obsolete. They will leverage gen AI capability for data usage, with more monitoring points becoming cheaper. At the same time, there are emerging contaminants to contend with. So, there's technology evolution in the mix.

That's what I was saying earlier: our ability to look at all the desal plants we operate globally, figure out how membranes operate with different salt concentrations, and understand the best way to operate them in current conditions is at our fingertips and will become more readily available as months and years unfold.

I don't think we need AI for this one. Unusually, I think it's easier to make a prediction without a crystal ball because as we've discussed, it takes 10 years to implement real infrastructure change across a nation. The plans are already in place and unfolding. There are six or seven new desal plants on the cards. More serious consideration of reusing water and turning on recyclable water schemes is happening. That's a political decision to take. The challenge we'll have to deliver all that is whether we have the people and skill sets to run all those new facilities. That's the same in energy transition and waste management transition. Water has that challenge to live up to, but we absolutely know what it's going to look like. We'll have new desal plants, new water treatment plants, and recycling water because industrial customers need it. Veolia is a training ground for people to come through and provide those resources. It's not always comfortable for me that I'm training people to work across the wider sector, but I can be altruistic about it. It's nice to be the place where you can get the best water expertise, and we have people available to develop new facilities. So, the 10-year vision is already there for everyone to see; it's just about how we all contribute to realizing it.

For 20 years, I think by then we'll have completely solved all these micro pollutant issues. We'll be producing green hydrogen as our main fuel source, and every drop of water that we ever use will be recycled back and cleaned again for reuse.

Thanks, Kate.