Centrica CEO, Chris O'Shea, talks to Justine Greening about the energy transition and bringing people with you

JG Centrica is a business people know really well through British Gas. It’s also a company that offers opportunity and one that is playing a central role in the transition to green energy. It’s played a part in my own social mobility journey as it was the last place I worked before becoming an MP so I’m delighted that it has joined our push for better social mobility with the Purpose Coalition. The Levelling Up Impact report that is launching soon will set out some of the work Centrica has been doing. In the meantime, tell us about your own journey.

CO I was brought up in Fife in Scotland. My parents were self-employed and when they ran into difficulty and lost their business we had to move to Glasgow. I was ten and nearing the end of primary school. It was only 60 miles away but it felt like a different world - it was a huge life change. The one beacon of stability at the time was a family friend who was an accountant. Looking back, that had quite an impact on me. We did accountancy at school and I was good at figures so I decided to study it at the University of Glasgow.

I didn’t know anyone else who’d been to university and I’d missed the Institute of Chartered Accountants lecture which told you how to do job applications so I was a bit worried about getting that first job! I eventually started work at a small firm in Glasgow but I was quite ambitious and wanted to work for one of the ‘big six’ firms to get international experience. I joined Ernst & Young in Aberdeen then spent seven years with Shell, working in Aberdeen, London, Houston and Lagos. I worked at British Gas Group for seven years and then was Chief Finance Officer for three different public companies – Vesuvius, Smiths Group and Smiths Instruments. I joined Centrica as CFO and became CEO two and a half years ago. It’s a massive privilege - we’re right in the middle of the energy transition in the UK and Ireland and we have 20,000 amazing colleagues helping with that and with the journey to net zero, as well as levelling up.

JG It’s a time of great change but also of challenge. Paying their energy bill is going to be one of the biggest costs that people will have to face. How is Centrica helping customers get through this difficult period?

CO With 7.5 million residential customers, 500,000 business customers and 500,000 in Ireland we have a huge reach, supplying energy to more than one in four households. The important thing is targeting direct help towards the most vulnerable. We have a partnership with the British Gas Energy Trust which was set up in 2004, funding charities and organisations that help with debt support, and to date we’ve contributed about £100m. Anyone with a problem can get in touch. But we decided that wasn’t enough and in the past nine months we’ve contributed £18m specifically for those in the most need who can apply for grants up to £1,500 to help with their energy bills.

JG In a way, it’s also about working with people before they get into debt?

CO We want to encourage people to seek help and to talk to someone if they’re in trouble and that’s why we launched the Stop the Silence campaign earlier this year, to tackle the shame that’s attached to debt. We also decided that for the duration of the energy crisis, 10% of the profits from British Gas Energy will provide on-going support, in addition to the £18m already committed. I have great colleagues in the company and in my leadership teams, as well as supportive directors. We all wanted to do the right thing and that meant we were able to make quick decisions to provide prompt help to our most needy customers.

JG And that’s where an organisation’s culture comes in –having everyone on the same page can be really powerful. It’s always the same people on the front line when times are difficultwhere you start tends to shape your life chances and the Purpose Coalition is working towards breaking that cycle. How does Centrica see these levelling up challenges?

CO We’re a significant employer in the UK and Ireland but we’d stopped recruiting and we weren’t training enough people to come into the industry. That has lots of ramifications but fundamentally it meant we weren’t giving people enough opportunity. We began our apprenticeship programme in the first quarter of 2021 and by the second quarter we’d recruited more apprenticeships than in the previous four years combined. Eighteen months later we have 900 new apprentices. Most start as smart engineers who, after 54 weeks, are earning £29,000. We’ve also trained 150 gas engineers. We have hired 600 engineers who were newly qualified but had no work experience. We have 1500 more colleagues in our industry than 18 months ago. If we get it right, we can change lives with well-paid jobs.

JG How did the company manage that sort of scaling up?

CO Covid taught us about ingenuity and adaptability, and how colleagues could work from home. From day one, all new recruits get the same health and wellbeing plan, including the same healthcare cover. But the issue for big companies like Centrica, and for government departments, is how do you push hard enough to make things happen but not so hard that the system breaks? There are bound to be bumps in the road but as long as you know you’re doing the right thing, you can stay the course. That’s not only the case for the individual but also for the business.

We’re the largest installer of heating in the UK – if we don’t train people, we can’t provide the service that customers expect. We have four academies which train and certify our apprentices so we’re educating our own people. Increasing the number of people we’re employing means we’re growing, and that represents success. We’re also focusing on offering opportunity to former members of the armed forces, with more than 10% of apprentices being ex-armed forces and a commitment to have more than 500 by the end of next year.

JG And widening that pipeline of talent then gives opportunity to people who might not otherwise have got that chance. It gives a positive sense of what the business is about.

CO I’m passionate about diversity and inclusiveness, not just because it’s the right thing to do as an individual but because it’s the right thing to do for business. We’re a customer facing business with more than 10m customers. To understand them we have to look and sound like them, whether that relates to gender, ethnicity, sexual orientation or socio economic background. One of our biggest colleague networks is for former service men and women but we also have networks for sexual orientation, gender diversity, fertility, menopause and carers – we offer 10 days paid carers leave. We can all learn from these groups and it’s really important that everyone has the same opportunities. We’ve retained a lot of the flexibility that we fine-tuned during the pandemic because otherwise people are excluded. It means that our workforce is very loyal. I want us to offer something our competitors don’t and make it a more attractive place to work. Our call centre staff, for example, are still working from home if they want to, with just one day per month in the office, and are just as productive.

JG It’s a battle for skills at the moment so it’s incredibly important for businesses to use all the talent that’s available. Your Levelling Up Impact Report shows your focus on mental health and wellbeing. How are you supporting staff?

CO I’ve had experience with mental health issues with family members so I’ve always been very aware of the issue. When I started at Centrica there were already First Aiders in place so it was ahead of the game. We want to encourage people to reach out and ask for help, in the same way as our Stop the Silence campaign for debt. A thousand people started work with the company in the last 15 weeks. Yesterday I had sessions with some of them where they had the opportunity to find out about life at Centrica but also to ask me questions directly in a live Q & A. It’s taken Covid for us to realise that we need to be adept as managers and check in with people regularly, to know our teams, to realise when something’s not right. To be an effective leader, you must care.

JG We’re currently going through the biggest economic shift and, as an energy company, Centrica is not just steering the business through that but the rest of us too.

CO We’re part of a broader coalition with government, energy companies and others working towards net zero. That requires a significant increase in electrification, wind, solar and decarbonised gas, ie hydrogen. The UK has 28m homes – 5.5 million of those can only be decarbonised by heat pumps, 6m by hydrogen and 16.5m in between could be by either. We’ve got to get on top of that. We’re the UK’s largest supplier of both gas and electricity so we have no vested interest. Hydrogen is the only way to ensure we decarbonise properly. If we don’t have hydrogen, the poorest in society won’t be able to decarbonise. Poor quality homes with poor insulation won’t get heat pumps. We can’t leave anyone behind in this transition so we need to have honest conversations in the process and not make inaction our default position. We want to refurbish what was our largest gas storage facility, Roughfield, to make it Europe’s largest hydrogen facility. It will cost £2bn and create around 3,000 jobs and allow us to put hydrogen into our gas network. Our Hydrogen Village trials near Ellesmere Port in the north west and in the north east prove hydrogen works in all homes. If we get it right ,we can easily decarbonise by 2050. It will allow us to ramp up production with the UK well-placed to become a net energy exporter once again. At the moment the gas flow in Europe is east to west. We can make it go west to east. It will create jobs, ease the pressure on public finance and allow us to invest. We’re creating well-paid jobs so that people can make their own decisions – it’s what levelling up is about. It’s an intergenerational improvement and hopefully we can help to deliver that.

JG It’s a fantastic ambition. In London, we see evidence of the Victorians’ legacy all around us. Centrica is helping the entire country to shift on the energy transition and that will also be an incredible legacy. Two final questions – what is the best piece of advice you were ever given?

CO Be curious. Don’t think you know the answer, ask questions.

And it’s interesting you talk about managing the energy transition as our legacy because as a company we’ve already been involved in a number of transitions. We started off lighting the gas lamps in London and still do around Westminster. When we transitioned from natural gas to town gas in the 70s, every appliance in every home had to be changed. We did all of that so we know how to do it.

JG And what advice would you give to someone at the start of their career?

CO Find something you enjoy, that you’re invested in and that you find fulfilling and then you’ll do it better. Find a working environment you’re comfortable in and an organisation where success is rewarded. If you’re good, opportunity will come. If you’re in the right company, the bright lights shine very brightly - it’s easy to see them and to know where you’re going.