Environment Business Observations with WSP USA's Dennis Papilion, Part 1

Dennis Papilion, the new president of WSP USA’s Earth & Environment (E&E) business, has witnessed enormous changes during his nearly 30 years working in environmental management and engineering.

In positions of increasing responsibility at major firms, he and his teams have navigated the shifting policies, regulatory philosophies and funding priorities that follow presidential and congressional elections, as well as the ups and downs of the business cycle.

In discussing the questions that follow, Papilion expressed optimism about current trends in the environmental segments and WSP’s growing sophistication as it serves clients and protects public health and natural resources.

Among the trends that excite Papilion:

• the growing integration of climate change into investor strategies and financial regulation,
• WSP’s continuing evolution into a top advisory and consulting firm for sustainability and climate change mitigation and risk management, and
• greater incorporation of resiliency and conservation into large public- and private-sector projects.

He also discussed some of the significant opportunities facing WSP to address these trends and enhance our position in the environmental industry, such as:

• applying the expertise of WSP’s recently acquired firms, such as Golder, EarthCon and Climate Finance Advisors (CFA), to cross-sell new services to private and public sector industries and clients, and
• leveraging new technologies and applications from WSP and acquisitions to position for larger multi-year remediation and restoration projects.

​1. What is the status of the environmental services market now, and what are you expecting over the next two years?

The environmental market is flat-out booming, with significant growth due to social and scientific awareness, industry responses to climate change and the focus on environmental social governance (ESG) and the change in presidential administrations in 2021. President Biden’s Environmental Protection Agency (EPA) is initiating new rulemakings to reverse the rollbacks in the previous administration, especially as those relate to climate change. Additionally, he has requested an EPA budget increase of more than 20 percent for the coming fiscal year.

We’ll also see large growth due to infrastructure spending.

But to be responsive to these demands, WSP USA and other environmental firms must build up our staff resources. There’s not only a war for new talent, but also to retain key employees as companies seek to recruit industry veterans and specialists.

Looking ahead, many leaders from the Baby Boom generation are retiring or will soon. So, we’re intensely focused on hiring new grads and even working with high schools to educate students about the growing opportunities in the environmental and engineering space.

2. What does WSP USA have to do internally to prepare for the generational change in leadership?

Provide more opportunities for training. There’s tremendous talent at WSP and we need to offer more training so that junior- and mid-level staff can level up to meet the needs of clients and the demands of projects. Also, specialties are always evolving, and to keep pace, extra training is required.

One emerging specialty where we’re especially focused on building our internal capacity and capabilities is in climate-related financial disclosure and analyses. I’m very excited about bringing on the experienced team at CFA, a small consultancy that has achieved robust credibility with multi-lateral funders like the World Bank, as well as a range of private-sector organizations and governments.

3. How is the climate crisis changing financial practices, and what is WSP doing for clients in this regard?

This is an emerging priority that has developed real traction over the last several years. Companies are facing new demands from investors and lenders to assess and disclose their climate risks—both the transition risks of changing energy and environmental policies and the physical risks such as extreme weather and sea level rise—and to explain how they’re addressing those risks.

The Task Force on Climate Related Financial Disclosure, Global Reporting Initiative, Sustainability Accounting Standards Board, International Integrated Reporting Framework Board, and other organizations are demanding higher levels of integrity and transparency around environmental, social and governance (ESG), and climate generally.

We’re expanding our pool of skilled staff to meet these growing demands, and we’re drawing on the recent CFA acquisition and other internal experts on climate, resilience and sustainability to provide cross training and specialized support. The big picture here is that our service portfolio continues to evolve from traditional environmental science, design and engineering to robust advisory capabilities around this epic transition that is happening.

The recent Verdantix Green Quadrant report, which ranked WSP along with ERM, EY and PwC as the four leaders in sustainability and ESG consulting, reflects what we’ve already accomplished.

4. What other trends do you see shaping the environmental markets over the next year or two?

Corporate clients are refreshing their approach to regulatory compliance and evaluating their risks across their entire portfolio of assets. This is driven by the Biden Administration’s priorities.

After seeing diminished emphasis on enforcement in the previous administration, now company managers with environmental responsibilities are rolling up their sleeves and working harder on meeting these requirements.

5. The U.S. Supreme Court is now reviewing the EPA’s application of the Clean Air Act to greenhouse gases. Are you concerned an adverse decision could reduce the pressure on large emitters?

Large companies in electricity, oil and gas, and other emissions-intensive industries know that the long-term trend is toward reducing GHGs and transitioning business models toward lower-carbon activities. They’re hearing this from their large institutional investors, from lenders, from their customers and other stakeholders.

An adverse decision could take some of the regulatory pressure off large emitters, but the long-term trends are clear and strong.

6. What will the $1.7 trillion Build Back Better infrastructure bill package mean for environmental services?

A couple of things. One, there will be a need environmental analyses and mitigations for all of these infrastructure projects, so that will increase our business and drive the need to build up staff resources to meet regulatory compliance and prevent unnecessary delays in shovels going in the ground.

There will also be a need to design long-lasting infrastructure, such as highways, bridges and rail systems for resiliency and greenhouse gas mitigation. This is an evolving target. One could say it means developing a resilient structure through the use of composite materials and with designs to withstand sea level rise and other impacts of climate change. But at the same time, it incorporates the processes and materials used in construction.

There’s a growing need to lay out specifically how these infrastructure projects will really contribute to greenhouse gas reductions. This is an emerging opportunity for environmental scientists to be working with the engineers. I think this is one aspect that’s going to shape how these big projects are designed and built.

Stay tuned for more environmental business observations by Dennis Papilion in Part 2.

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