Big interview Keeping them C-suite
If Agg wants to see a fellow executive these days – as long as they’re based in London anyway – he can just pop down the corridor for a chat. That’s probably just as well, for if the CFO’s role involves as much number crunching as ever, cultivating the human touch is increasingly vital. That’s particularly given National Grid’s status as a private company. Think about it like this: they may help build a greener tomorrow, but every investment Agg and his colleagues make, from new cables to better street lights, has to be funded from somewhere. And, given it’s a member of the FTSE 100, with powerful shareholders like Goldman Sachs and JPMorgan to contend with, the firm must keep its gaggle of owners happy.
National Grid now boasts 28,000 members of staff and assets worth £65bn.
electricity distribution operators, Agg says the twin trades are a dramatic step towards National Grid’s 2050 sustainability targets. “Those two transactions together will move us to around 70% electric and around 30% gas when we look at the overall portfolio of National Grid,” he explains. “Look at the transaction in that broader light – as part of that overall pivot.” Agg notes that the March deal isn’t finalised yet. Among other things, its Australian-majority buyer is subject to UK government checks. All the same, in their elegant blending of financial and environmental goals, Agg’s successes certainly speak to how finance can help sculpt National Grid’s future. Nor is that the only area where Agg thinks his team can make an impact. To explain what he means, he highlights his company’s plans to fund subsea cables between Scotland and England, ensuring new wind turbines in the North Sea can efficiently pump electricity across the country. It’s a similar story, he continues, when it comes to deploying virtual control devices, allowing engineers to travel between jobs more efficiently, or how National Grid analyses data to make its buildings more sustainable.
£54bn
The amount National Grid is investing in upgrading the energy grid.
Industrial News 12
As a transatlantic company, meanwhile, Agg liaises closely with colleagues in the United States. “The reality is that I collaborate with my finance teams there day-in and day-out, just the same way that I deal with my colleagues here in the UK,” he says. “We play exactly the same role in supporting the business and helping drive performance, enabling investment decisions, driving more efficient processes through data digitisation.” Fair enough: a project in the Upstate New York town of Schenectady, helping replace 4,200 street lights with energy-efficient alternatives, is just one of many cases where National Grid US is following in the footsteps of its British cousin. It makes sense, moreover, that recent events have made a joined-up approach to sustainability even easier. With the pandemic upending how corporate communications work, Agg says it’s now remarkably straightforward to “drive a lot of collaboration” via Zoom.
Fortunately for him, Agg says National Grid’s shareholders are thoughtful enough to appreciate the company’s long-term vision. “They are looking at National Grid as a long-term investment,” he argues, suggesting that constant dialogue with investors has helped them get behind the C-suite’s thinking. And, if an altruistic love of the planet doubtless plays a role here, Agg hints that self-interested financial pragmatism can too. “[Shareholders] understand the need for National Grid to be a core part of the decarbonisation journey in both the UK and the Northeast of the US,” he explains. “They realise that we’re working hard to align with our regulators and other stakeholders on that journey and, therefore, that will feed through ultimately to the growth of our business.” Considering National Grid registered net income of £1.6bn last year, he likely has a point. Beyond the boardroom, you can imagine Agg’s conversations with government are perhaps becoming more frequent too. Before her brief tenure as prime minister, Liz Truss ruled out energy rationing, without explaining what would happen if demand outstripped supply this winter. Asked what National Grid had planned in the event of a crisis, Agg was predictably diplomatic, noting he was looking forward to seeing what the new government proposed. But between those longer emergency tests and unclear rules around who can tune in for National Grid’s weekly Operational Transparency Forums – journalists were briefly uninvited by mistake – you suspect things are tense. Even if we do emerge next spring without icicles for toes, yet more drastic shifts may soon be on the horizon. In April, Downing Street announced plans to nationalise Electricity System Operator, the division of National Grid that actually keeps Britain’s lights on day- to-day. To put it another way, the company could soon find itself in yet more meetings with ministers and civil servants, and potentially face even greater calls to justify new financial ventures. It would probably be an understatement, in short, to suggest that Agg could have a hectic year ahead. Though, if he can get through the next few months without a repeat of December 1970, that would surely be a start. ●
Finance Director Europe /
www.financedirectoreurope.com
National Grid
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