Booming sustainability consulting services

The market for sustainability consulting services has begun to take shape as companies struggle to set decarbonization targets and measure progress.

Partners that offer such services range from consultancies focused entirely on sustainability to broader professional services and consulting firms that manage sustainability practices. Sustainability consultants provide a combination of business advice, assistance with data collection and analysis, and specialized software tools.

Potential customers, at this stage, are mainly made up of large global companies responding to the regulatory environment in Europe. However, the number of companies subject to compliance requirements could increase dramatically if the Securities and Exchange Commission (SEC) required public companies to disclose their greenhouse gas shows in their 10-K statements. Such a rule could surface in 2022 or 2023.

“Mandatory disclosure is going to be central to getting more companies to tackle their [carbon] footprints and minimizing their emissions,” said David South, senior director of energy and utilities at West Monroe Partners, a Chicago-based business and technology consulting firm.

Services for sustainability

Ethos Sustainability Solutions offers sustainability consulting services combined with software tools. The Philadelphia company works with its clients to create a long-term, typically 10-year, strategic sustainability plan.

Joe Camilleri

Joe Camilleri, CEO of Ethos Sustainability Solutions, said the company’s most popular offering is a sustainability rating tool that measures a company’s performance in 17 sustainability areas. These areas are based on the United Nations Sustainable Development Goals and any other environmental, social and governance reporting framework (ESG) chosen by a client.

“Clients are now looking for certain sustainability services with the understanding that it will make it easier for them to implement larger or systemic changes,” said Camilleri, who co-founded the consultancy in 2019.

Camilleri also cited the high demand for measurement and planning services, noting the new prevalence of ESG rating and disclosure tools that brokerages are implementing to rate stocks. An ESG rating assesses a company’s exposure to ESG risks, providing investors with another way to assess investment potential.

Customers, however, seem more interested in knowing their carbon footprint than taking significant steps to reduce emissions. “Many aren’t quite ready to implement the changes needed to significantly reduce their impact,” Camilleri said. As a result, the company has seen a decline in demand for implementation services which come with a higher cost of capital.

David South, Senior Director of Energy and Utilities at West Monroe PartnersDavid South

“These customers seem to be expecting a more developed carbon offset system, as well as a decrease in the cost of other carbon and plastic mitigation technologies,” he said.

West Monroe plans to leverage its business and technology consulting services to meet clients’ sustainability needs as they arise. On the technology side, South said he thinks customers would need help with data collection, cleaning, management and analysis. And, once the database is in place, dashboards can help leaders visualize data and track progress toward achieving the Sustainable Development Goals.

“We hope to be very involved in this in the future,” South said.

Some consulting firms have built offerings around green cloud computing. Thoughtworks, a Chicago-based technology consulting firm, launched its sustainability consulting services with its Cloud Carbon Footprint tool. The offering was born out of a conversation with a digital native customer who needed to determine how their cloud usage was affecting their overall carbon footprint, said Elise Zelechowski, global head of diversity, equality, inclusion, sustainability and social change at Thoughtworks.

Cloud Carbon Footprint, a free and open source tool, converts cloud usage into estimated energy consumption and carbon emissions, according to Thoughtworks. Cloud Carbon Footprint is sparking conversations with customers about how to use the tool to support the Sustainable Development Goals, Zelechowski said.

Sanjay Podder, Managing Director and Head of Sustainability Technology Innovation at Accenture Sanjay Podder

Accenture, meanwhile, offers myNav Green Cloud Advisor, a tool to map out a green cloud migration strategy.

“It establishes a baseline of existing data center power consumption, IT requirements and sustainability goals, and quantifies the greenness of potential cloud solution options,” said Sanjay Podder, managing director and lead sustainability technology innovation at Accenture.

Accenture also offers a suite of sustainability services. These include industry net carbon transitions; computing and sustainable technologies; sustainable measurement, value creation and impact; sustainable brand, design and customer experience; and leadership, talent and organization.

The latter service aims to create “the mechanisms and cultures that embed sustainability into everything an organization does,” Podder noted.

Indeed, sustainability consultants have cited the importance of corporate culture.

“This work is so much about cultural change,” Zelechowski said. “How to change and evolve the culture of the organization to work differently? »

Elise Zelechowski, Global Head of Diversity, Equality, Inclusion, Sustainability and Social Change at ThoughtworksElise Zelechowski

A siled approach won’t put companies on a different path: Representatives from IT, operations and finance, among other groups, need to work together to develop a decarbonization strategy, Zelechowski said. Here, sustainability initiatives can borrow ideas from the green building movement, which uses the Cart approach to bring together a range of stakeholders early in the design process. Zelechowski, before joining Thoughtworks, worked in green building and founded the Rebuilding Exchange, which diverts building materials from landfills and promotes reuse.

Sustainable partnership

Thoughtworks collaborates with industry peers in its quest for sustainability. In May 2021, the company co-founded the Green Software Foundation with Accenture, GitHub, and Microsoft.

This work is so much about cultural change.

Elise ZelechowskiGlobal Head of Diversity, Equality, Inclusion, Sustainability and Social Change at Thoughtworks

The foundation aims to build an “ecosystem of people, standards, tools and best practices” in green software engineering, Podder said. The overarching goal: to help the software industry contribute to the information and communications technology sector’s goal of reducing greenhouse gas emissions by 45% by 2030, which, according to Podder, is in accordance with the Paris Agreement.

“We need to form these types of collaborations to share information on how we act strategically and quickly,” Zelechowski added.

In other alliances, Accenture expanded its relationship with Salesforce in 2021, combining Salesforce Sustainability Cloud with Accenture’s sustainability services for clients such as ISDI and Mastercard. The company also has extended its sustainability work with SAP.

Hans Georg Uebe, Global Head of Ecosystem Delivery Success at SAPHans Georg Uebe

In addition to Accenture, SAP partners with Wipro and BearingPoint in the sustainability market. Large SAP partners have dedicated practices, while a few smaller partners focus entirely on sustainability, said Hans Georg Uebe, global head of ecosystem delivery success at SAP.

SAP partners’ sustainability offerings include “accelerate-oriented” packages that can lead to a broader service agreement, sustainability metrics dashboards and benchmarking content, as well as standalone applications, a said Mitchell Kick, senior vice president and COO of global business development and ecosystem at SAP.

Sustainability: areas of focus

Large corporations are among the most likely buyers of sustainability consulting services. Larger companies are four times more likely to offset their carbon footprint and 1.5 times more likely to increase renewable energy use than their smaller counterparts, according to West Monroe’s Quarterly Executive. Survey for the fourth quarter of 2021. The company surveyed 150 C-level executives at companies with annual revenue of at least $250 million.

On the other end of the spectrum, startups such as born-in-the-cloud companies can focus on sustainability as a strategic part of the business.

Mitchell Kick, Senior Vice President and COO of Global Business Development and Ecosystem at SAP Mitchell Kick

But it’s the larger companies that often become sustainability-conscious across their international operations, which may meet – for example – European Union standards, South noted. The EU makes environmental reporting mandatory for public companies, banks and insurance companies, among other groups.

Supply chains have become a focal point of corporate sustainability campaigns, with large corporations feeling pressure from consumers, regulators and investors to monitor the environmental effects of their suppliers. Forty-two percent of West Monroe executive survey respondents said they have set standards specific to the supply chain. “They need to look at all the inputs to their operations, which means their supply chains,” South said.

Accenture offers a circular value chain service as part of its suite of sustainability offerings. A circular supply chain reuses raw materials after use to minimize waste. “If organizations want to impact the sustainability agenda, they need to shift to responsible and circular value and supply chains,” Podder said.

Supply chain concerns and regulatory changes could influence the demand for sustainability consulting services. Increased international attention could also play a part, the UN climate change conference COP26 – being held in Glasgow from October 21 to November 12, 2021 – being an example.

“COP26 … can force [businesses] to be more aware of their footprint and to force more scrutiny of the supply chain,” South said.