Interview: Aggreko maintains course as US rolls back on ESG

Working out ESG strategy and targets for any major corporation in the US suddenly got a whole lot more complicated. Yet, if Todd Aston is worried about the new US administration’s take on all things ESG, he’s not showing it.

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“I think everybody’s still kind of waiting for the shock and awe of the new administration period to wear off and see where the chips are going to fall,” says Aston, whose role is to develop and deliver Aggreko’s regional ESG strategy in North America.

“I think everybody still agrees that saving the planet is the right thing for us to do for the next generation.”

The ‘background noise’ around ESG has certainly changed in the US. On his first day back as president, Trump signed an executive order aimed at withdrawing the US from the Paris Climate Agreement for a second time. Separately the president is aiming to eliminate DEI programmes at federal agencies.

Some major corporations, including PepsiCo, Google and Target, are reviewing or amending their DEI policies, while carbon reduction targets are also in the spotlight.

Nonetheless, Aston - who joined Aggreko in late 2023 after a career in the automotive and aluminium industries - says that Aggreko, which over the past two years has boosted its sustainability functions by recruiting ESG leads in each of the regions in which it operates, plans to continue with its ESG programme.

“I have a feeling you’re not going to see anything really walked back from it for lots of folks, especially on the sustainability side. I think those investments are going to move forward. The growth curve may taper off a bit, but I don’t think you’re going to see anybody really walking back their stance on sustainability or on trying to reduce their carbon footprint or anything like that.”

Todd Aston, VP of Environmental Social & Governance at Aggreko. Photo: Aggreko

Focus on scope 1 & 2 emissions

For Aggreko, he says, the company’s main climate goals remain the same: To achieve Net Zero in scope 1 and 2 greenhouse gas emissions by 2035; to power the company’s facilities with 100% renewable energy by 2025; and a 30% reduction in the emissions intensity of energy solutions by 2030. Separately, the company has pledged to increase the representation of women in leadership roles.

“When I joined Aggreko in the end of 2023, we wanted to focus on scope one and scope two as aggressively as we could for a couple of reasons,” he says.

“One, it, it’s a little bit easier of a knob for us to turn naturally. But two, we wanted to really establish some credibility with our customers so that when we speak to them about the energy transition, we’re doing so from a place of authority, and we can make them comfortable that we understand that journey with them and go along.”

To that end, over the past five years Aggreko has been focussing on a programme of revamping its rental depots around the world to make them more sustainable and, where possible, run on renewables.

Last year in North America, the company started a programme of installing LED lighting in all its depots and purchasing Renewable Energy Certificates to offset direct carbon emissions. Now it is looking to go further.

In January the company completed its first one in the US, a 14,000 square foot depot in New Orleans, which the company estimates generates around 92% of the power it consumes.

“Louisiana was a great opportunity for us. It has good sun, a good utility provider to work with. It was also a facility that just had a brand-new roof installed a few years or prior so really that there was no additional prep work that needed to be done,” says Aston. “We were able to offset 92% of power needs, that includes facility lighting, additional power testing of units, shop and repair.”

Now the company is investigating ways to roll the concept put across the company’s other 32 North American locations, starting with the 16 depots it owns freehold. Already the company is working on similar plans at depots in New Jersey, St Louis, San Francisco and Los Angeles.

“We had an initial push in Europe to introduce rooftop solar and we’ve been slowly rolling that out to some other facilities globally,” Aston says. “We’re trying to hit as close to 100% offset for each of the facilities we’re looking at.

“If we own the facilities, it makes it a little bit easier for installation. It makes it a little easier to make sure that we’re seeing the return on the investment in the time frame that we want,” he says.

“We’ve had a few that we’re probably end up being able to have a net positive where we’ll be able to export more than we’re consuming but we have a few that just because of location or physical footprint and or local utility providers, we may be restricted to be less than optimum.”

Solar panel initiatives

One of the main challenges of installing roof top solar panels, Aston says, is in fact ensuring that the roof is strong enough to hold the extra weight. Many of the US depots owned by Aggreko include older buildings which either need either a complete roof repair or structural upgrades to be able to support the solar, requiring additional work and capital expenditure which Aston says can range from a few hundred thousand dollars to over a million.

“When we first started talking about solar and looking into the age of the roofs, we realised there’s significant investment required. But our executive committee didn’t even bat an eyelid. They said if that’s required for the solar then that’s required for the solar. Let’s move ahead and approve the capital as one,” says Aston.

“It is a sign of Aggreko’s commitment to reducing emissions because, in this day and age, capital for ESG initiatives becomes difficult. The initiative itself may have a good budget or business case, but I’ve seen other organisations start to shy away from that extra expenditure. We really haven’t seen any of that at Aggreko. It’s been a full approval for any of the sites that we’ve tried to do.”

Aggreko’s new roof top solar panels installed at the company’s New Orleans depot. Photo: Aggreko

He estimates that the company spent around US$4 million on ESG upgrades and plans to spend a similar amount this year. By the end of 2025 he expects to have rolled out the concept across six facilities.

At the company’s repair centre in Pearland, near Houston, Texas, Aggreko is planning to go even further by creating what it calls a ‘centre of excellence’ to display the company’s green credentials.

Here the company plans to instal a micro-grid and battery energy storage system to hold onto the power from testing gas generators and then export that back to the national grid.

“When we test some of the large natural gas generators, typically we would hook that up to a load bank to verify testing. The problem is you’re essentially just wasting that energy when you’re doing those tests,” Aston says. “So we’re looking to tie that into a BESS system in a micro grid. We’re working with the local utility to be able to offset and sell that energy back to the grid.”

And the company says that once the Pearland centre of excellence is operational, it plans to use it as a blueprint for upgrading other large Aggreko facilities where generator testing takes place as well as a model to show customers.

“All of the core expertise that we have will be in one facility,” Aston says. “Customers can come in and see that we’re we do know what we’re talking about and see it in action.”

Aston calculates that the transition to LED lighting and the rollout of solar installations between them should reduce scope 1 and 2 carbon emissions across Aggreko’s North American by 30%-40% over the next year. The company then plans to offset the remainder by purchasing Renewable Energy Certificates.

Reducing customer carbon emissions

Yet in terms of reducing scope 3 emissions – those generated by the use of its fleet by customers, which make up the largest part of its carbon footprint - Aston says Aggreko is taking a more pragmatic approach.

The lion’s share of Aggreko’s scope 3 emissions come from its customers using leased generators on their job sites.

Aston says that although it is investigating new technologies and working with customers to inform them about more sustainable options available and their total costs compared with that of a standard diesel genset, at the end of the day, the company’s guiding principal is that the customer knows best.

“We want to make sure our customers are first and foremost in our mind,” he says. “We are a customer service organisation, so we need to make sure that as we adopt a technology that it is truly ready for prime time, that our customers aren’t going to see interruptions in the field, they’re not going to see downtime and things like that because we’ve tried to rush to market with a technology that’s not quite ready.”

Similarly, Aston says that the company will continue with its other ESG targets which also include a goal increase the number of women in leadership roles in the company. In its most recent report, the company said that the proportion of females employed at management band E and above stood at 19.15%.

We’re in a kind of wait and see to see how the definition shakes out as some of these policies get cascaded down from executive order to actual law,” Aston says.

“But for us, I think we’ll stay the course that we’ve been on because it’s a core belief and not necessarily anything that would fall against the current administration’s rules, at least as we understand them today.

“We would love to see more female leadership in the organisation but we don’t have targets where X percentage has to be female or X percentage has to be a minority. That’s just not part of who we are. We value the diversity and we want to hire the best possible people. We want to make sure that all the options are on the table and we’re bringing in the best talent.”