Veolia CEO: We Can Help Run Thames Water If Govt Nationalise It

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1:16Welcome to Big Boss Interview. I'm Liana Byrne. We have BBC Climate Editor Justin Rowlett with us today. Justin, you've been speaking to the CEO of one of the biggest water companies in the world. I'm joined by Estelle Brachlianoff, the chief executive of Veolia, the world's largest environmental services company. It's a 44 billion euro business. It employed 215 ,000 people around the world. It supplies water, deals with waste and produces energy. the basic services that keep modern societies running. And the company's size and reach makes Brachlionov one of the most powerful women in world business.

1:59Veolia is the biggest waste company here in the UK. Its lorries may well collect the rubbish and recycling from your homes. I'll be exploring what Brachlionov's plans are for Veolia in the UK. Could it help improve this country's woeful water industry? Maybe even take over troubled Emswater. And what about data centres? Can their voracious appetite for energy and water be tamed? Let's hear it then. Here is Justin's interview with Estelle, CEO of Veolia.

2:33Estelle, welcome to Big Boss Interview. First of all, briefly, what is Veolia?

2:39Estelle Brachlianoff:Oh, Veolia is a multi-local company present in 45 countries, leader of environmental services, which is what we do is offer environmental security to cities and to industries alike. This is about water, this is about waste and recycling, this is about local energy. So originally it was a French water company, wasn't it? And how did it evolve into what you're describing as this kind of environmental security company? You're right. Originally means more than 170 years ago, you're right. We were born in France in water, but it developed into now, you know, a company which is 80 % outside France and actually 40 % outside Europe even.

3:18Estelle Brachlianoff:We are number one in the US. We are number one in Australia. This is for water. The US is for hazardous waste and for water. And in Australia, it's about waste as well. So we are really present in many, many different countries. And how did it evolve from this originally French company to a worldwide one? actually has the customer's need has evolved from, you know, providing essential service, such as water at your tap, developed into developing technologies and innovation to treat various pollutants. And then, you know, recycling as a social service as well. And we've acquired as well a few companies over the years.

3:56And that's how we became this, you know, 45 billion turnover to 120 ,000 employees worldwide now. So this is a big, big, big company. How, Estelle, did you get to the top? Actually, I've been in the company for more than 21 years. So I kind of know it inside out, moved through the ranks, started as, you know, having being the head of a small business unit somewhere, and then progressively a larger one. And then I moved for a few years, actually, in the UK, heading our activities there, and so on and so forth. So what degree did you study? What did you study? Yes, I graduated as an engineer as well as I majored in quantum physics, which is not exactly very useful for Veolia, but still makes you think in like innovation terms.

4:48And when there is a problem, there is a solution. We just have to find it out. So you're in quantum physics, but you end up running a business. That seems like quite a big journey you've made. Yes. A lady which is driven by curiosity. I love to learn things, discover people, discover countries. I've lived six years in the UK. And that's how I came from, you know, like an engineer to progressively run businesses. So probably the second driver for me is like the never give up. So I said, you know, like I was always attracted to from challenges as in, you know, like, OK, I'm not so sure I'm going to be able to do it.

5:27But let's give it a try. and as long as I have an appetite for it and even a passion for it, okay, let's give it a go and try. But you rose all the way to the top. So what's the point at which you said, I'm going to give it a go, I'm going to go to be CEO of this huge company? Oh, I never had this moment. Actually, I was always, you know, from one job to the next and as long as I have a value and have a little bit of fun as well, let's give it a try and give it a go. Never thought about, you know, what the next steps will be. You know, I'm not at all like this is my plan for the next few years in the organization was never the way I thought about it.

6:04You are one of the most senior or run one of the biggest companies, one of the women running one of the biggest companies in the world. If that captures what I'm trying to communicate. How has being a woman changed your pathway through a big and frankly quite male dominated business like the earlier? Yes, it's a male-dominated business, although things are moving fast, you know, and now we have more than 30 % female, you know, throughout the organization. It was basically twice less just five years ago, roughly. So it's moving fast, but still is male-dominated. I guess I'm a great believer that difference creates innovation.

6:44And difference can be, you know, like male and female, you know, around the table, but can be nationality, can be, you know, even if I'm a social partner. You have to mix people to be able to create something different from just reproducing exactly the same answers to new problems. That's why I don't know if I was only a female, but it's fair to say very different from other people around the table. Let me give you an example. When I was appointed in the UK that was more than 10 years ago to run the business here, I was the only woman around the executive committee of the UK business. I was French and I was something like 40 years old at that time.

7:25And I remember asking some of the team, what was the, after a few years, what was the most shocking of the three? I said, oh, you're right. Female, French or 40? Yes. And the reality was all three, you know. So I guess difference is not only about gender. It's wider than that. And I hope it brought something to the party. But it gave me back something as well. I learned a lot by working with people who were, you know, like in the UK, very different from my initial way of running businesses. I've got to ask you the obvious question. Do you think the fact that you were a woman created barriers along the way?

8:02Was it a challenge sometimes because you were female to get that job, as you say, French, female and 40? Yes, of course. But I never thought about it when I was experimenting, if you want. I was just, OK, if there is if there is something I believe into, I'm going to fight for it. And that's it. So it's more after years than what I reflect back. I can see, you know, the barrier. But when they were, you know, in front of me, I never thought about them. The question is really the question is really to be given the chance. And I was very lucky that I was given the chance of friend diverse businesses I just told you about.

8:39And that was by my boss at that time. Let's move to Veolia itself. So you've talked about kind of environmental security as a kind of organizing principle to how you see the company developing. You've also talked about Veolia as a defense company. Now, you supply water, you deal with waste. How is that national defense?

9:01Estelle Brachlianoff:Actually, I think environmental security is part of national security. And probably we haven't realized it yet, but some other countries have. When I say some other countries have, if you were to come with me in the Middle East now, probably you wouldn't understand very much what I mean by that. Desalination units in the Middle East are targeted, as we speak, because they are a critical infrastructure to provide water, not only to cities, but to industries, to refineries and to pretty much everything, and of course agriculture. So they are considered an essential service, a critical need. When you say targeted, you mean literally targeted by Iran in the conflict around the Straits of Hormuzh?

9:44Actually, desalination units are in the list of the targets, and actually some of them have been bombarded, as we speak. So we have therefore Veolia facilities in the Middle East surrounded by Patriot missiles. So literally, we're talking about, you know, security as in national security. Of course, you know, this is an extreme example that you can see in the Middle East. But when you look at the summer that we've had through Europe and including in this country, in the UK, you can think of, you know, when water becomes scarce, when you have droughts, And you have to think of water as something as critical as many other national securities, you know, items.

10:29Water irrigates pretty much everything. Without water, you don't have, you cannot have food. You cannot produce anything. Of course, you know, you cannot, you know, drink. So it's critical resource.

10:43Estelle Brachlianoff:And this is one of the first consequence of global warming and climate change is on water. So it's one of the first victim of climate change is water. And you've talked about water bankruptcy. It's a phrase the UN also uses, the idea that we're kind of effectively using up running out of water faster than nature can provide it. How can, you know, this is, you know, you're a commercial company. How can you step in and kind of address this, these kind of really big national and environmental issues? So Veolia is the largest water company in the world. We operate on the five continents, including in very water-scarce areas, such as Jordan, Chile, Australia, just to name a few.

11:24Estelle Brachlianoff:And we've, over the years, developed technologies and know-how to be able to ensure you have safe water, resilient water at the tap every single day. Water is a key critical infrastructure that we have to think of as we should protect it. That's why I call it security as much as any other critical infrastructure. What does kind of water failure in the UK look like, do you think? I mean, you've had water companies here in the UK, you're experts in water supply. Are we at the point now where we could see a situation where there is enough water to flush toilets in the UK? There is enough water supply, water in the taps.

12:08People are going to stand pipes out in the street. Can you imagine that happening?

12:12Estelle Brachlianoff:I would put it another way around. We have to do everything it takes so that it doesn't happen in the UK. And we have everything it takes. So we have the technology. I hope we will have the will, the political will, to understand that it's a geopolitical and national security interest for the country to act quick and to act fast. Why do I say that? We have all the technology to be able to avoid, you know, water restriction at the tap in the UK. And acting now will always be less expensive than active in a few years time in the middle of a big crisis. It's economically efficient to do it that way.

12:53You're saying that the technology is there. That implies that the technology is available, but that it's not there, which implies that we do have a problem. and parts of Britain were close to rationing water supplies this summer. So, I mean, just give me a sense of your perspective, running one of the biggest water companies in the world. How close is the UK to having a really serious issue with water supply?

13:16Estelle Brachlianoff:I hope that this summer, where we were very close in the UK of having water restriction, as you mentioned, will be a wake-up call for everybody to say we have to act now as opposed to wait for the next crisis because climate change is happening. The first victim of climate change is on water. So you know what? The type of summer we've seen this year will happen again. And they will happen again more frequently and even more intensely. That's a fact. That's what science tells us. We already had two-thirds of the country facing drought this summer. And you know what? Again, this is going to happen again.

13:51Estelle Brachlianoff:So we have two choices. One is turn a blind eye and wait for the next crisis. And at one point then, yes, there may be water restriction in the UK. Or we have a plan, we act now and we use everything we have. And what do we mean by what I mean by everything we have? Use the technology and the know-how of companies like Veolia has developed over the years in five continents. We are ready to import it in this country to be able to treat wastewater, to treat the pollutant in water and to avoid water restriction. And how do we do that? you know, like manage leakage in a better way, using AI, for instance, so smart investments, reuse of wastewater, and maybe developing a few desalination units at one point.

14:39Estelle Brachlianoff:Do you think it's come to that? Desalination units in the UK? Do you know, this is a question for you, that you already have a few desalination units in the UK? It's usually something the general public doesn't know, but you already have a big one. I'm ashamed to say I did not know that, Estelle. You already have a quite large one in the Thames Hestory. And, you know, we are regularly selling a smaller unit in the western part of this country. Why is that so? Because as opposed to what a lot of people think, all the south of the UK is actually commonly known for water scarce and quite a dry part of the world.

15:14I did see a statistic that said Rome gets more rain than London, which is quite extraordinary. Now, listen, Veolia used to run a regulated water company in the UK, and there's a wonderful commercial opportunity available for you. You could take over Thames Water, which has been having some trouble. How about Veolia takes over Thames Water, puts in place some of those new technologies that are going to protect us from droughts in the future?

15:36Estelle Brachlianoff:I would think in a different way. You know, I will let, of course, the government decide what they want to do with Thames Water. What I can say, we have a lot of things we can offer. We have the technologies and know-how to be able to operate large network, large wastewater treatment units, for instance, in a very efficient way. Very efficient means, of course, Thames Water and other water companies need more investment. But I guess it's smarter investment, which I think Veolia contributes to. I mentioned leakage. You know, when you are facing potential water restriction and you still have a big leakage, you might wonder, OK, what is this absurd?

16:16Estelle Brachlianoff:You know, you have the traditional way of reducing leakage, which is just to replace pipes. It costs you a fortune. You know, it's quite a lot of disturbance in the streets and that's it. You have a more modern way, if I may, which is to use AI to detect the leak exactly where they are happening. So you're targeting a specific section of the pipe to be replaced. This is typically the way I, what I call smart investments. So, of course, we can help water companies, Thameswaters, whatever its future is, as well as the other, to be smarter in their investments, to operate in a more efficient way.

16:51Estelle Brachlianoff:Thanks to the innovation with the, we are the larger water company in the world. We can bring those innovation to the UK. And why do I talk about being more efficient in running, for instance, wastewater? water it's because you know it's one of my obsession is that people have value for money so innovation for the sake of it is no interest for me innovation has to serve a purpose it can be solve a problem pollutant in water water restriction that you can avoid it can be as well just by being more efficient you have the bills right which can stay where they are as opposed to go up. Bielia is ready to help.

17:30Okay, well, we're very glad to hear that. But I'm wondering why, you know, there is this commercial opportunity in Thameswater. I mean, you know, and you've kind of stepped back, you're clearly saying Bielia doesn't want to buy Thameswater, certainly at the moment. Does that mean that you think Thameswater isn't fit for purpose? Isn't a business that you think that you could successfully turn around?

17:51Estelle Brachlianoff:No, I would put it another way around. I think, you know, you have a, it's not for me, it's for really the government to decide what type of model they want for running the water companies in the UK. The actual model is, you know, the assets are owned by the private sector, as well as the assets are run, if you want, by the private sector. There are a lot of models where the assets are actually owned by the public. It's public ownership and the public, whether it be the government or a specific dedicated regional body of some sort. But the private sector brings innovation as well as know-how to run them.

18:31Estelle Brachlianoff:So in a way, you can have the best of both worlds, in my opinion, when you have, you know, like private sector do what they do well, which is bring innovation. But Veolia is not here specifically to bring money. In a way, we're here to help save money. So, Ernie Burnham, the new UK Prime Minister, has said he doesn't think the water industry in the UK is working. And I have to say, I think a lot of the UK public would agree with that. So, are you saying, you know, listen, Andy, if you nationalise the assets, if you make the physical assets of the companies a public good, then we, Viola, would be happy to come in and use our expertise to manage them better.

19:10Is that what you're offering?

19:11Estelle Brachlianoff:It could be an option, yes. You know, by running some specific plants, why not? So plants, I mean, you know, drinking water units or wastewater treatment plants or network management. That's what we do in some different countries. I am not at all opposing public and private sector. I think the public, as in the government or, you know, public bodies, are exactly where they should be in deciding what to do. Then we're here to provide our expertise and innovation so that we deliver at the best cost possible. And I think, you know, we need both in other terms. And I think that if the water sector is giving this direction, we'll be very happy to support, again, running in a very efficient way using the innovation we've developed everywhere.

20:00Estelle Brachlianoff:Just to give you an idea, in Jordan, I've talked earlier on about reusing wastewater. Basically, it's recycling wastewater, as opposed to ask the farmers to stop irrigation for a few weeks because we don't have water in the middle of the summer. What about using wastewater, treated wastewater, of course, being recycled to help the agriculture sector? That's what we do in Jordan. 75 % of irrigation of water in Jordan is provided by wastewater. water. That's something we can develop in some part of the UK as well. Let's move on to another business area that I know is something you think is a potential opportunity for Veolia.

20:40Data centres, and you're talking about supplying water, naturally grows out of your core business, but also energy to data centres. Now, data centres, as you know, are very controversial. I'm the climate editor of the BBC. I get asked about data centres practically every day. What do you think you can bring to these issues about the incredible appetite for both energy and water that data centres have?

21:03Estelle Brachlianoff:So data centre and micro E and everything to do with AI, I call it the AI industries because it's really a supply chain. It's two sides of a coin. One is exactly what you said, they're consuming enormous amount of water and energy. And we have the way in Veolia, again, the know-how and technologies to be able to make it more sustainable. And we'll explain that in a minute. The other side of the coin is that we can use and we are using AI as well to reduce water consumption, to detect leak, just as I mentioned, or to be more efficient in what we do. So I guess AI can be a force for good, as long as it's used in a very practical way, where each time we check the balance between the environmental impact and the positive effect it can have.

21:49Estelle Brachlianoff:When it comes to data centres being implemented in the UK, you're right, if we're not careful, we can have a fight for water, in a way, or for energy between a local community and the data centres, which is, of course, not at all what anybody wants. By the way, it's happening already in the US when you look at it. And it is becoming data centres a very big part of the next election in November in the US is around data centres, you know. So it's becoming a political agenda as well. And it's becoming a political agenda pretty much everywhere. As in, do we have to choose between supplying farmers and city or cooling down data centres?

22:30And the issue, just to be clear for the audience, the issue is if you stop supplying water or energy to a data centre, if it goes off, you lose all the data. And that's a huge kind of loss. So data centres demand unbelievable security of supply of both water and energy.