It’s time consulting leaders walk-the-walk on climate change

18 August 2021 Consultancy.uk 8 min. read
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Sustainability professionals have long encountered a mixed response from the C-suite when it comes to taking action on environmental, social and governance (ESG) issues. Thankfully however, the denial level amongst the C-suite in the consulting industry, on perhaps the greatest challenge of our time, climate change, has shrunk considerably and sustainability is now firmly on the consultancy boardroom agenda.

Pandemic aside, 2020 gave us much to celebrate as big business awoke to the benefit of addressing climate change head-on. This is a victory many years in the making. In recent years, the commitment from business leaders to “do well by doing good” has increased substantially – by way of example, more than 20% of the world’s largest corporates in the last few years, with combined sales of more than £10 trillion, have committed to net zero targets.

It is estimated that British companies represent a third of those who have signed up to the pledge to eliminate their contribution to carbon emissions by 2050.

Chris Bowden, Managing Director, Squeaky

As well as it being the ethical and moral thing to do, core to this shift is the overwhelming weight of accumulated research which has found that companies who pay attention to ESG concerns increase the potential for value creation in respect to top-line growth, cost reductions, reduced regulatory and legal interventions, employee productivity uplift and investment, and asset optimisation.

The conflicting interests of ESG
Whilst many consulting leaders now take ESG seriously in their decision making, many are managing conflict with board members who are blinkered by the lure of short-term results and are bound to the belief that companies who focus on ESG issues experience a drag on value creation. Worryingly, the 2020 Annual Corporate Directors Survey by PwC found that only 38% of board members think ESG issues have a financial impact on a company.

As a result, many C-suite executives have made unrealistic and somewhat outlandish net zero pledges, which will still need to be met long after they have left the company. Creating a poisoned chalice for future leaders is neither helpful nor ethical. Responsible pledges must be made, and action must be taken, now.

But archaic board-level thinking is not the only challenge on the race to net zero. Too many companies, consulting firms included, have embraced a “box-ticking” culture that encourages the adoption of increasingly standardised ESG activities. Token programmes and unclear claims will not only erode public trust and invite backlash against a company and its executives, but they will also impede the combined effort needed on the race to zero.

The catalysts of change

Arguably the biggest catalyst to make companies more sustainable, inclusive, and socially responsible is the reform of capitalism. To say capitalism has been a powerful movement is not justice enough. Study upon study has noted that today, consumers will spend their money with brands who align with their moral beliefs, and if they don’t, there’s little public hesitation in snubbing companies who people believe are not pulling their weight.

Silence is no longer an option in the marketplace of authenticity and experience. Plus, the failure of political systems and governments to lead efforts to curb climate change – no less than when Donald Trump pulled the US out of the Paris Climate Agreement in 2016 – has created an opportunity for brands to step up, connect with consumers, and take the lead in an unprecedented way.

It is a shift that has led many businesses to move beyond passive activity – like signing petitions – to build strong alliances, policy and activism, aligning on science-based commitments towards sustainability.

And it’s not just consumers who’ve acted as a motivational force either. Employees are pushing the companies they work for to follow a moral imperative rather than a silent one and will punish those who fail to speak out by taking their talent elsewhere.

The tools for change are at our fingertips

Consultancies have always needed to amend their strategies to respond to market conditions, but climate change is a different beast because the timescales of the most harmful impacts are far beyond most strategic plans. What the world has learnt from a year in a pandemic is that it is entirely possible to collaborate to make instant change. So, not only did the lockdown trigger the largest ever fall in carbon emissions, but it has also left us safe in the knowledge that businesses can create new working models, at speed. Excuses are now futile.

Plus, the positive news is that the technology, creative collaborative thinking, and affordability exists to reach net zero. The question is, how can the consulting C-suite set their consulting firms up to reach net zero, contribute to the bigger goal of limiting global warming and, ultimately, limit further impact of the climate disaster?

1. Act now through carbon offsetting
Reaching net zero requires momentous abatement of greenhouse gas emissions across all sectors of the economy. Certainly, offsetting alone will not tackle climate change and it cannot be treated as a silver bullet. However, as experts around the world agree and as the science proves, it is an essential part of our journey to net zero and most companies will not be able to reach net zero without it. Not matter how much an individual or business reduces, there will always be stubborn or hard to address residual emissions.

We need to move to a low-carbon world as quickly as possible. But even in the best-case scenario, this transition will take time. As such, while we work on reducing our emissions (often involving long term systemic changes to decarbonise existing business models), we need to do something about the carbon emissions we are producing today.

Funding an equivalent amount of carbon emissions reductions through voluntary carbon offsetting is an effective way to take responsibility for this carbon footprint and buys us time while we develop new processes and technology to reduce it.

2) Power your consulting firm with genuinely clean energy
Renewable energy has a dirty secret. It is often presented as entirely positive. However, ‘renewable’ is not always the same thing as energy from non-polluting, sustainable or carbon neutral sources. In fact, many energy providers use ‘renewable’ to describe energy from ‘dirty’ sources including biomass, which involves burning wood or waste and releasing both solid carbon particles and greenhouse gases like carbon dioxide (CO2) into the atmosphere.

While none of the ‘renewable’ energy providers have been deceitful necessarily, some are not entirely clear about their sources. This means making informed decisions can be harder for customers.

Energy is the foundation of any business, and if you are serious about reaching net zero, it is that businesses responsibility to power its people with energy that has no adverse impact on the environment. This means reduced or no carbon emissions, and no high-level radioactive waste emissions.

3) Identify and overcome paralysing misconceptions
One of the biggest misconceptions out there is the belief that a mission or purpose that embeds ESG commitments costs more. Prioritising ESG doesn’t have to cost the earth – indeed robust actions and transparent behaviours can be adopted with little cost, and yet the value add can be exponential.

The key here is to set the record straight amongst the C-suite community, busting any of those long-standing myths, so that they can prioritise ESG commitments.

4) Prioritise innovation in your consultancy
When it comes to sustainability, one of the biggest tech developments is the capacity to create, capture and transmit data. Learning and acting on this data is a critical feature of the sustainability agenda. The reason is because advanced analytics supply businesses and organisations with insight into how efficient they are, ultimately helping to pinpoint opportunities to reduce environmental impact.

Artificial intelligence (AI) and Robotic Process Automation (RPA) developments are also making a significant contribution to the sustainability agenda, helping optimise operation efficiency and process accuracy.

But innovation is not just about data. Businesses must innovate their thinking too. They need to be open to and commit to collaborating in green finance, invest in clean technology and use their powerful voices to back social movements that call for positive change. And it’s the c-suite who must lead this charge.

5) Role model green behaviours by consultants
Companies who are serious about becoming more sustainable, inclusive, and socially responsible must consider ways to embed these objectives into the organisation and start initiating behavioural change right away. Most successful companies have a mission statement and a purpose, so one way to start would be to consider whether these statements align with their ESG goals.

Another route is to become a certified B Corporation, a for-profit company, which commits to creating a positive impact on society and the environment through its operations. It is worth noting that recertifying UK B Corps (B Corps must recertify every two years) reported an average growth rate of 14 per cent, 28 times higher than the national average of 0.5 per cent.

About the author: Chris Bowden is Managing Director of Squeaky, a B2B Marketplace for renewable energy that enables businesses and public sector organisations to buy 100% clean electricity directly from wind, solar and hydro generators.