Questions remain on net-zero resolve of Big Four

15 October 2020 5 min. read
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Three of the world’s four largest professional services firms have recently committed to producing net-zero carbon emissions in the next decade, while the fourth has made noises toward the same goal. However, without a change to the business models of the firms regarding carbon intensive activity, this is unlikely to make a noticeable dent on the unfolding climate crisis.

2020 has seen a growing number of major consulting firms declaring themselves to be ‘net-zero’ carbon, or to be aiming for as much within a short amount of time. Strategy giant Bain & Company recently marked its ninth year of carbon neutrality – reducing and offsetting its flights, taxi and train rides and all the energy required to power its 58 global offices, while MBB rival Boston Consulting Group pledged to spend $400 million to become climate positive by 2030.

Following a number of accounting scandals being linked to the Big Four of Deloitte, EY, PwC and KPMG – as well as the Panama Papers having exposed their role in helping clients shift wealth to tax havens which foster damaging environmental policies – the world’s largest professional services firms are also increasingly seeing net-zero as a way to restore their reputations among clients.

At the turn of the year, this saw EY launch its Better Begins With You programme to promote community and sustainability work by its staff, as well as committing to be net-zero by the end of this year – a decade sooner than many other firms.

Questions remain on net-zero resolve of Big Four

In contrast, Deloitte announced that through its WorldClimate strategy it would commit to the more conventional target of achieving net-zero emissions by 2030 – though that is still 20 years ahead of the 2050 timeframe set by the Paris climate agreement. It will also be “operating green,” and extending the impact beyond the firm. Specific goals include reducing business travel; sourcing 100% renewable energy for Deloitte’s buildings; converting 100% of the firm’s fleet to hybrid and electric vehicles; and engaging with major suppliers to adopt science-based targets.

Finally, PwC announced shortly after in September that it too would aim to operate at net-zero by 2030. With global reach across 157 countries, industry coverage, and its 284,000 people that support clients at every stage, PwC intends to enable such radical change by building on existing client work in sustainability and net-zero transformation. For example, its advisory practice is integrating climate risks into relevant engagements, providing clients with insights about climate risks and opportunities as well as helping them to transform their business processes.

At present, KPMG is conspicuous in its absence from the clamour to aim for net-zero – though some local firms – including Australia – have made commitments to net zero operational emissions. KPMG firms in Ireland, Brazil, Spain and the Netherlands have already achieved carbon neutrality, while its UK wing released a report which warned that only 8% of companies have plans to tackle climate change.

Commenting on the whitepaper, Sue Bonney, KPMG UK’s Head of ESG, remarked that if the UK is to truly achieve the goal of transforming to a sustainable, net-zero economy, “we need far greater collaboration and more immediate action at boardroom level.” While it was not a statement of company policy, it certainly seemed to imply that net-zero was on the firm’s agenda.

Questions raised

However, even if the Big Four do seem to be moving toward a consensus on the issue in terms of company policy, the actions of individual wings overseas suggest there may not be universal agreement within their firms.

According to Australian journalism platform The Fifth Estate, it remains unclear whether or not the Big Four will continue to offer services to carbon intensive projects and clients, such as fossil fuel companies. Having reached out for comment The Fifth Estate did not receive a response from any of the companies on the matter.

Meanwhile, Jonathon Peacock, KPMG Australia’s Head of Oil and Gas spoke publically in support of the Australian Government’s continued support of fossil fuel. Welcoming an announcement from the Federal Government that Australia would ramp up its gas exploitation to drive down energy prices, he stated, “we can expect further positive focus on gas supply and integration across supply chains from this year and into 2021 and beyond,” implying that the firm would be more than happy to benefit from the work which would prolong Australia’s dependence on carbon-releasing fossil fuels.

Elsewhere, Deloitte’s commitment to preventing climate change was also called into question, following the release of a report claiming global warming could economically benefit a list of countries with cooler climates. Branded as “misleading” and “perfectly insane” by a host of climate experts, the whitepaper from Deloitte’s Czech wing argued that the country was poised to benefit from any increase in the Earth’s temperature, no matter how intense.

Ultimately, as Jo da Silva, Global Sustainable Development Leader at Arup put it when the firm announced its own net-zero target, the biggest impact audit and advisory firms will have is likely to come from their influence on clients.

Unless the Big Four are able to change tack with regards to how they advise their clients – especially regarding carbon intensive industries, or heavy-polluting governments – the commitments of their firms to net-zero will be little more than good PR. Whether the quartet are willing to go further than that remains to be seen.