Posted , in Client behaviour
A bottom-up approach to sustainability
- Fergus Navaratnam-Blair
On the 11th June, the world’s most powerful people descended on the sleepy seaside village of Carbis Bay in picturesque Cornwall, as the town played host to the 47th annual summit of the G7. Two topics dominated the agenda: climate change, and the global economic recovery from COVID-19.
At the end of the three-day event, the assembled Presidents and Prime Ministers released a joint statement unveiling their ambitious “Build Back Better World” (or B3W) initiative. This represented a clear statement of intent not only that there would be significant state investment in global public infrastructure in order to accelerate post-COVID growth, but that this investment would be targeted towards building the infrastructure necessary to support a low-carbon economy. As part of this initiative, the G7 renewed an earlier pledge to raise US$100 billion per year in financing specifically for green projects in developing countries.
This all comes at a time when sustainability is, understandably, a hot-button issue in the world of consulting. More or less every major firm tells us that they’re making serious investments into building up their sustainability expertise. And the data suggests that they are right to do so; in a study last year, we found that 82% of clients agreed that ensuring a “green recovery” from COVID-19 was a strategic priority for their organisations. But programmes like the B3W Initiative should remind us that different countries will have very different roles to play in that green recovery. And that means that consulting firms which are serious about developing their sustainability capabilities will need to avoid the temptation of attempting to do so in a purely top-down way.
Too often, we see firms appoint a global ESG leader, or create a centralised sustainability practice, and attempt to use this centralised expertise to govern the development of their sustainability services. But such an approach is, quite simply, doomed to fail. The challenges facing an emerging economy attempting to maintain its pace of growth in a less carbon-intensive way are completely different from those facing a developed country looking to decarbonise its existing infrastructure. Likewise, the types of climate risk a client is exposed to can vary dramatically based on the geographic location of their business and its supply chain. It’s highly unlikely that a Sustainability Services Director sitting in New York or Paris is going to be fully attuned to the needs of clients in New Delhi or Pretoria.
These kinds of issues can be avoided if firms are willing to adopt a more bottom-up approach to developing their sustainability expertise. Partly, this means hiring local sustainability experts across a wide variety of markets. But even more importantly, it means being willing to invest in the upskilling of your existing employees. Five or six years ago, there was a big push among firms to ensure that all of their consultants—regardless of what fields they worked in or where they were based—had enough digital literacy to be able to converse intelligently with clients about their digital priorities. Now, the same kind of push is needed for sustainability. If firms can successfully weave sustainability into their existing service lines in this way, they will put themselves in a much better position to be able to address the specific ESG needs of their clients—regardless of where those clients happen to be located.
The 2021 United Nations Climate Change conference also known as COP26 —to be held in Glasgow in November—is widely expected to be another landmark moment in the global fight against climate change; agreements reached there could further galvanise the energy around sustainability in the Global North, and accelerate the flow of green capital into infrastructure projects in the Global South. By taking the right approach to sustainability now, you can make sure that your firm isn’t caught on the back foot when that happens.