Posted , in Client behaviour
Overcoming the obstacles to sustainability investment
Regular readers of our content will have already seen us make the case that sustainability will be one of the defining stories in the next chapter of the professional services industry. Across virtually every industry and every region, businesses are waking up to the fact the environmental, social, and political changes currently looming on our collective horizons represent a genuine threat to their long-term health. Inevitably, clients will end up turning to professional services firms—both to help them understand the scale and the nature of these changes, and to provide them with support as they seek to make their organisations more resilient to them.
The factors compelling clients to take a more active interest in sustainability have been well-documented; see, for example, our recent white paper on “Sustainable Transformation”. But firms that truly intend to maximise the size of the opportunity here will also need to consider the other side of this particular coin. In other words, they will have to identify the most common obstacles and barriers that act to limit client investment into making their organisations more sustainable. Understanding these obstacles is, after all, a prerequisite if your firm is to have any hope of successfully navigating them.
Ask clients about this and you’ll get a range of responses. Some cite a lack of leadership buy-in as the biggest limiting factor on their sustainability spend. Others point to measurement challenges—difficulties either with assessing the sustainability of their organisation in a robust way, or with quantifying the value-add to their business of sustainability spend. Still others say that their organisation lacks a clear owner for sustainability-related issues, meaning that investment in this space happens haphazardly and without any clear strategic vision.
But push a little more, and it quickly becomes clear that many of these specific issues are, in reality, just symptoms of a single underlying cause. Put simply, sustainability is not just an agenda item that can be evaluated and analysed the same way as any other. No; making intelligent decisions about sustainability requires stakeholders to adopt a radically different mindset compared to their usual way of thinking about business priorities.
Most businesses rarely spend money without a clear understanding of the business case involved and the potential financial returns. And even though investment in sustainability can be looked at through a financial lens, doing so often has a limiting effect. Organisations are going to have to learn that not every business priority can be easily quantified in monetary terms. Additionally, most clients outside of a few select sectors are used to managing their businesses on relatively short timeframes; investments need to see a pay-off within a few years at most to be considered worthwhile. And while sustainability risks like climate change certainly will have short-term effects for many organisations, the full scale of their impact will take decades to play out.
This mindset challenge is why it is not uncommon to find businesses where progress is slow, despite the full buy-in of investors and company directors. It’s the stakeholders the next level down within the organisation—the people in operational leadership roles—who are often the ones most in need of being brought on-side. These people simply don’t have the luxury of thinking on multi-decade timespans in the way that an investor can. Their performance is evaluated based on how the business performs in the here and now; and so we shouldn’t be surprised that, when allocating spend within their business unit, they are going to prioritise projects that have a more immediate and more easily measurable ROI.
Professional services firms seeking to grow their pipeline of sustainability work will need to help their clients break out of their established modes of thinking, and adopt a new mindset better suited for the age we find ourselves in. And they should focus this effort not on people who have already been won over, but on stakeholders in key operational roles: the people whose buy-in will be critical if client organisations are to have any hope of making real, substantive progress on these issues. Help your clients overcome this challenge and you will undoubtedly be doing them a great service—while also setting yourself up to benefit from their newfound willingness to invest in sustainability.