The market for sustainability consulting services has begun to take shape as businesses struggle with setting decarbonization goals and measuring progress.
Partners that offer such services range from consultancies entirely focused on sustainability to broader professional services and consulting firms running sustainability practices. Sustainability consultants provide a mix of business advice, help with data collection and analytics, and specialized software tools.
Potential clients, at this point, consist mainly of large global companies responding to the regulatory environment in Europe. The number of companies with compliance requirements, however, could grow significantly if the Securities and Exchange Commission (SEC) requires public companies to disclose their greenhouse gas emissions in their 10-K filings. Such a rule could surface in 2022 or 2023.
"Mandatory disclosure is going to be a linchpin in forcing more companies to come to grips with their [carbon] footprints and minimizing their emissions," said David South, senior principal of energy and utilities at West Monroe Partners, a business and technology consultancy based in Chicago.
Services for sustainability
Ethos Sustainability Solutions offers sustainability consulting services combined with software tools. The Philadelphia company works with clients to create a long-term, typically 10-year, strategic sustainability plan.
Joe Camilleri, CEO of Ethos Sustainability Solutions, said the company's most popular offering is a sustainability scoring tool that measures the performance of a company across 17 areas of sustainability. Those areas are based on the United Nations' Sustainability Development Goals and any other environmental, social and governance (ESG) reporting framework a client chooses.
"Customers are looking for certain sustainability services now, with the understanding that it will make it easier for them to implement larger or systemic changes down the road," said Camilleri, who co-founded the consulting firm in 2019.
Camilleri also cited high demand for measurement and planning services, noting the new prevalence of ESG rating and disclosure tools that brokerages implement to rate equities. An ESG rating assesses a company's ESG risk exposure, providing investors with another way to review investment potential.
Clients, however, appear more interested in learning about their carbon footprints than taking major steps to reduce emission. "Many are not quite ready to implement the changes required to actually lower their impact significantly," Camilleri said. Accordingly, the company has seen lower demand for implementation services that come with a larger capital cost.
"These customers appear to be waiting for a more developed carbon offset system, as well as a decrease in cost of other carbon and plastic mitigation technologies," he said.
West Monroe plans to parlay its business and technology consulting to support clients' sustainability needs as they emerge. On the technology side, South said he believes customers will need help with data collection, cleansing, management and analytics. And, once the data foundation is in place, dashboards can help executives visualize data and track progress toward meeting sustainability goals.
"We hope to be very involved in that going forward," South said.
Some consulting firms have built offerings around green cloud computing. Thoughtworks, a technology consultancy based in Chicago, launched its sustainability consulting services with its Cloud Carbon Footprint tool. The offering came out of a conversation with a digital-native client who needed to determine how its cloud use affected its 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 use into estimated energy consumption and carbon emissions, according to Thoughtworks. Cloud Carbon Footprint sparks conversations with clients on how to employ the tool to support sustainability goals, Zelechowski said.
Accenture, meanwhile, offers myNav Green Cloud Advisor, a tool for charting a green cloud migration strategy.
"It establishes a baseline of existing data center energy consumption, computing requirements and sustainability goals, and quantifies the greenness of potential cloud solution options," said Sanjay Podder, managing director and technology sustainability innovation lead at Accenture.
Accenture also offers a suite of sustainability services. Those include net-zero industry carbon transitions; sustainable IT and technologies; sustainable measurement, value creating and impact; sustainable brand, design and customer experience; and leadership, talent and organization.
The last service aims to create "the mechanisms and cultures that bake sustainability into everything an organization does," Podder noted.
Indeed, sustainability consultants cited the importance of business culture.
"This work is so much about cultural change," Zelechowski said. "How do we change and evolve the culture of the organization to work differently?"
A siloed approach won't put companies on a different path: Representatives from IT, operations and finance among other groups must collaborate to develop a decarbonization strategy, Zelechowski said. Here, sustainability initiatives can borrow ideas from the green building movement, which uses the Charrette approach to bring together a range of stakeholders early on in the design process. Zelechowski, prior to joining Thoughtworks, worked in the green building field and founded the Rebuilding Exchange, which diverts building materials from landfills and fosters reuse.
Thoughtworks collaborates with industry peers as it pursues sustainability. The company in May 2021 co-founded the Green Software Foundation with Accenture, GitHub and Microsoft.
Elise ZelechowskiGlobal head of diversity, equality, inclusion, sustainability and social change at Thoughtworks
The foundation aims to build a green software engineering "ecosystem of people, standards, tooling and leading practices," Podder said. The overarching goal: help the software industry contribute to the information and communication technology sector's target of reducing greenhouse gas emissions by 45% by 2030, which Podder noted is in line with the Paris Agreement.
"We need to form these types of collaborations to share insights into how we move strategically and quickly," Zelechowski added.
In other alliances, Accenture in 2021 expanded its relationship with Salesforce, combining Salesforce Sustainability Cloud with Accenture's sustainability services for customers such as ISDI and Mastercard. The company also extended its sustainability work with SAP.
In addition to Accenture, SAP partners with Wipro and BearingPoint in the sustainability market. SAP's large partners have dedicated practices, while a few smaller partners completely focus on sustainability, said Hans Georg Uebe, global head of ecosystem delivery success at SAP.
SAP partners' sustainability offerings include "accelerated-oriented" packages that can lead to a broader service agreement, sustainability metrics dashboards and benchmarking content, and standalone applications, said Mitchell Kick, senior vice president and COO of global business development and ecosystem at SAP.
Sustainability: Areas of focus
Large enterprises are among the most probable buyers of sustainability consulting services. The largest companies are four times more likely to offset their carbon footprint and 1.5 times more likely to boost renewable energy use compared with their smaller counterparts, according to West Monroe's Quarterly Executive Poll for the fourth quarter of 2021. The company surveyed 150 C-level executives at companies with at least $250 million in annual revenue.
At the other end of the spectrum, startups such as born-in-the-cloud companies may focus on sustainability as a strategic element of the business.
But it's the larger companies that often become cognizant of sustainability through their international operations, which may encounter -- for instance -- the European Union's 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 companies feeling pressure from consumers, regulators and investors to monitor the environmental effects of their suppliers. Forty-two percent of the respondents to West Monroe's C-level executive survey reported setting supply chain-specific standards. "They need to look at all of 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 repurposes raw materials after use to minimize waste. "If organizations want to make an impact on the sustainability agenda, they need to rotate to responsible and circular value and supply chains," Podder said.
Supply chain concerns and regulatory changes could influence demand for sustainability consulting services. Increasing international attention could also play a role, with the UN's COP26 climate change conference -- which is being held in Glasgow from Oct. 21 to Nov. 12, 2021 -- providing one example.
"COP26 … may force [businesses] to be more cognizant of their footprint and force a greater look at the supply chain," South said.