Demand and dilemmas grow for sustainability consultants
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Sustainability consulting is booming. As companies set ever more ambitious goals in this area, the advice they need goes beyond technical or regulatory matters to strategic planning and business transformation. And, at the same time, consultancies find themselves under growing pressure to stop accepting work that helps fossil fuel companies keep polluting.
“What was a niche market is becoming part of mainstream consulting,” says Brendan Williams, an analyst at research and consulting firm Gartner. It estimates global sustainability consulting revenues doubled between 2020 and 2021, and then again between 2021 and 2022.
Much of this work is to help companies meet emissions reduction goals. Boards now look at their organisations’ strategic goals through a climate and sustainability lens, says Francois Austin, global head of energy and natural resources at consultancy Oliver Wyman.
But while large corporations are seeking advice on sustainability strategies, smaller clients often need different guidance. “There’s quite a disconnect between the major players, who are relatively well-educated about this and may need support in developing a more co-ordinated approach,” says Austin. With smaller companies, “initial education needs to be done to bring them up to speed”.
Once companies have developed a strategy, though, consultants can provide a wide range of services, says Tamzen Isacsson, chief executive of the Management Consultancies Association. Its January survey found 80 per cent of consultants expected their sustainability work to increase significantly over the next year.
“It could be identifying climate change risks or helping firms understand policy changes and the environmental targets they need to meet,” she says. “Or helping them with wholesale changes in their business models.”
Changes to business models sometimes require technical as well as strategic support. For example, Jonquil Hackenberg, PA Consulting’s global head of sustainability, says that, to help foodmaker Mondelez pursue net zero targets in its biscuit category*, which includes its Oreo cookies, her firm evaluated sustainable farming technologies and developed a supply chain plan.
Such specialised work calls for consulting expertise in everything from financial modelling to climate engineering. “And there’s a great deal of science and policy work, a lot of which isn’t intuitive and is difficult to navigate,” says Solitaire Townsend, who co-founded the sustainability consultancy Futerra in 2001. “So you do need specialists.”
She believes consultancies — whose direct carbon footprint is relatively small — must stop advising fossil fuel companies. “Our material impact is in the advice we give to clients, which is a very big deal,” she says.
In 2015, Futerra published the industry’s first client disclosure report, revealing how much of its revenues came from high-carbon clients. More than 170 creative and PR agencies have followed suit. In 2022, as part of the UN-backed Race to Zero climate campaign, the firm became the first company in the professional services sector to be designated as a climate solutions provider, which means 90 per cent of its portfolio of clients and projects must be aligned with keeping global warming to 1.5°C.
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However, not everyone sees the decision on whether to work with oil and gas companies the same way. “Of course, we’re working with them because they are integral players in enabling the energy transition,” says Austin. “But there are clients and projects where we’ve been asked to do work that is not consistent with the transition, and we have said no.”
Williams sees three approaches in the consulting sector: taking on any client regardless of its environmental strategy; taking on any client but only for projects to reduce its carbon footprint; and “at the other end of the spectrum is not working with [fossil fuel] companies at all”.
While activists are stepping up pressure for consultancies to ditch clients in “dirty” industries, doing so may become compelling for another reason: to recruit staff with much sought-after sustainability skills. Last year, more than 1,100 McKinsey employees signed a letter saying the firm’s “inaction on (or perhaps assistance with)” the emissions of its clients posed a risk to both its reputation and its ability to attract and retain top talent.
Williams says consultancies are “selling the advice of smart people” — who are unwilling to work for companies that “don’t walk the walk”.
*This article has been amended since publication to clarify that PA Consulting is working with Mondelez to pursue net zero targets in its biscuit category, not just for its Oreo cookie