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In January 2020, HFS predicted that the sustainability services space would boom in anticipation of the demand leading up to and following a critical COP26, the UN’s next climate summit (Glasgow, November 2020), given the abject failure of COP25 (Madrid, December 2019). It’s only February, and we’re seeing multiple service providers ramping-up their sustainability offerings and brand images to meet the outpouring of demand surrounding (we hope) a renewed commitment to and action plan on climate change. Business leaders must start working with expert partners to drive sustainable business practices in preparation for the inevitable scrutiny from the public and regulatory bodies.
COP26 marks the scheduled five-year re-appraisal of the famous Paris Agreement: given the highly-charged geopolitical environment and increasingly frequent global events that make climate change impossible to ignore, we can expect political leaders, the public, and investors to come down hard and scapegoat un-sustainable companies for the current state of affairs. Business leaders can’t afford to wait for this regulatory kneejerk reaction; instead, they must drive action on sustainability and build an ecosystem of partners to help re-engineer their businesses to take sustainability as seriously as they take cost reduction. With a series of major consultants and large IT services firms building out their sustainability-focused services, now is the time for smart executives to move in and work with firms looking to experiment and expand their service lines in the space. We’ve already seen considerable growth among many of the leading providers:
At Kaleidoscope 2020, Accenture Technology’s flagship client event, sustainability played an important role and captured the zeitgeist of client demand and the sniff of opportunity from leading service providers. Demonstrating the extent of research and investment in the space, Accenture had moved well beyond justifying why businesses should become more sustainable and what they should be doing, and instead had pushed distinct services and solutions that could help enterprise clients drive real change.
Accenture’s partners—always out in force at their client events—also had distinct sustainability-focused solutions to present to clients. UiPath, for example, was present at the event, and it has a long track record of working on sustainable initiatives. UiPath recently announced its sponsorship of EFdeN—a Romanian Student NGO that works to build sustainable housing and is integrating RPA to amplify its efforts, potentially demonstrating the future of RPA in sustainable business.
As the sustainability market evolves, Accenture may have a unique opportunity to become the gatekeeper to innovations in the space. It demonstrated its ability at Kaleidoscope by the sheer scope and scale of partners already working on focused solutions for clients.
Businesses will implement solutions—either self-motivated by a commitment to sustainability or as enforced by regulation—the smart businesses will have their partners in place and lead the way before more regulation comes in
Climate negotiations are tough to unpack, but businesses do not lack influence; they must lead by showing the public and regulatory bodies what is possible with the right partners and resources in place. These flagship enterprises, rather than simply greenwashing their businesses with CSR, can lead the way with sustainable business innovation. In the process, they might even influence the policymakers that are implementing regulations. Indeed, many businesses are already heavily invested in addressing climate change, but they can do better by working with NGOs and civil society than by being a scapegoat for the problem, which erodes trust in businesses’ true intentions because clients perceive them as waiting for regulation instead of proactively changing.
Businesses will be a public scapegoat and face massive consultancy bills if they wait for regulation
Despite the lack of government action at COP25, it’s easier for activists and those same governments to target companies whose environmental impacts are more directly obvious. Businesses need to make bold moves to decarbonize and de-risk their value chains—including listening more closely to their investors who, in line with a recent trend, are far more likely to be questioning their long-term sustainability; they’ll also need to listen to and convince the impatient public who don’t understand why seemingly easy solutions aren’t happening.
Michael Hayes, Global Leader of Renewables at KPMG, claimed that KPMG’s clients and partners across the industry have strong climate change agendas and are moving beyond those of their respective governments. Pressure from their supply chains and even their own employees is forcing their hands, so they’re getting ahead of the regulation. Similarly, a senior executive at chemicals giant Bayer, a KPMG client, emphasized the distinct trap facing businesses that are entangled in the politics of climate change—particularly those painted as the bad guys like the oil and gas industry. As regulation means more firms rush to providers to support their sustainability goals, the prices of their services will inevitably go up.
The Bottom Line: Smart executives are already building out their ecosystem of sustainability experts and partners in preparation for COP26.
Business leaders will do better as pioneers of sustainable transformation than they do as laggards catching up when regulation is enforced. And service providers are gearing up to support this growing demand—the smart execs will be partnering up now in search of good deals before increased regulations drive price increases.