Is sustainability consulting really on its way out?
In his recent speech to the UN, Donald Trump described climate change as the “greatest con job ever perpetrated on the world”. The statement was met with widespread ridicule, but have the markets listened to the president or to his dissenters?
We survey 300 senior buyers of sustainability consulting services every year as part of our Market Trends programme. This year’s was the fourth iteration since we began running this report in 2022, giving us a valuable opportunity to look back at how the market has changed over time. Crucially, it was interesting to monitor whether the recent pushback against sustainability from the US government had affected global demand for sustainability consulting.
Client appetite has been buffeted by both political and economic winds. As our report dives into, announcements from governmental administrations are leading clients to scale back their sustainability initiatives, and more than two-thirds of clients we surveyed admitted that the economic environment has led to them deprioritise ESG.
Green shoots
While this will understandably ring alarm bells for some, clients are still very much thinking about their long-term transformation goals. Almost all clients told us they felt that they needed to change their approach to sustainability within the next three years to remain viable. This demonstrates the fact that clients fully understand the nature of the challenge if they are to compete in a lower-carbon economy.
In the short term, actions principally look set to revolve around reporting. Clients need access to data to accurately measure their environmental impact and will be looking for data & analytics expertise to help make this happen. They are also excited about the role of automation and AI in helping to collect, calibrate, and simplify this process.
The longer-term plan revolves around three key areas of focus: changing consumer behaviour, establishing greener supply chains, and, most crucially, the development of more sustainable products and services.
All of these actions point to the need for slow, more transformative change. Clients understand the extent of the challenge that they are facing and are adapting their strategies to build those changes into their wider business decisions. They recognise the holistic nature of this challenge: To get the most out of this transition, they need to encourage consumer enthusiasm for green products as well as provide the green products themselves.
So, what does all of this mean?
In three words: Don’t panic. Prepare.
Our first sustainability report in 2022 emerged into an environment of ebullient enthusiasm, and it is right to acknowledge that, for the meantime, the days of ambitious, large-scale transformation plans may be behind us.
However, clients are thinking in longer terms than electoral cycles, and, based on the plans for investment, the appetite for sustainable transformation clearly remains as clients seek to embed sustainable thinking into all of their processes. This cuts right across the board of E, S and G, showing how important this priority is for all clients.
Instead of it being an issue of desire, clients appear to be more concerned about clarity. While they know they need to change, they don’t necessarily know how to go about it. They will be gravitating towards partners that can help them create a green strategy that cuts across the business in both the short and long term. Simply put, this is about embedding sustainability into wider transformation to ensure that it becomes standard practice.
In the short term, this is about creating the means to measure emissions in line with new regulation. But the real value will be in the longer-term projects: Clients want help building a coherent strategy across their business to ensure that all areas of the organisation are pulling in the same direction when it comes to emissions reduction and inclusivity.
What can firms do next?
To gain greater insight into the status of the sustainability consulting market—including market sizing, survey analysis, and insights from global sustainability leaders—download our latest Sustainability Market Trends report. If you would like to uncover the growth opportunities specific to your firm in this fast-moving market, please get in touch.