Point of View

Explore seismic shifts in sustainability services for your green recovery

November 16, 2020

Early in 2020, we predicted that the sustainability services ecosystem would boom—especially in the run-up to COP26, the UN’s flagship climate summit. Then COVID hit, and the early moves from Accenture, EY, KPMG, and others hit a lull. Despite COP26 being pushed back to November 2021—enterprises and governments are looking now to a “green recovery” from the pandemic, and the sustainability services market is heating up:

  • Atos acquired climate consultancy EcoAct to turn its corporate social responsibility (CSR) work and consulting, execution, and managed services into a start-to-finish decarbonization offering; see our detailed take on this.
  • Technology providers (including hyper-scalers) are developing their existing tools and unveiling new innovations to address environmental, social, and governance (ESG) problems.
  • KPMG and Accenture, two providers at the forefront of sustainability services, are both vying for the top: KPMG boosted its greenhouse gas accounting capabilities, while Accenture—fresh from its $3 billion Cloud First announcement—showcased just what cloud can contribute to global decarbonization.

Our previous calls for enterprise leaders and service providers to get ahead of the sustainability services game is now a call to catch up.

The pandemic first forced companies to stabilize, but now most are looking toward a green recovery—we can’t afford to go back to business as usual

Early in the pandemic, we called for you to not throw sustainability aside: Rethinking attitudes to sustainability can not only drive down emissions but also often finds new efficiencies and cost savings, which will be critical for both survival and a green recovery. Sustainability won’t be deprioritized by customers or regulators—unlike the depressing cutbacks to ESG seen in previous financial crises.

The enterprise space has seen the need and opportunity of sustainability for some time—but now, service providers see it, too.

By acquiring sustainability consultancy EcoAct, Atos is developing its capability to take clients through the whole decarbonization journey from design and consulting through to implementation—and doing so with the holistic narrative needed to see eye-to-eye with CEOs’ ever-increasing drive for sustainability. Atos’ Decarbonization Centre of Excellence (DCoE) will bring in EcoAct’s 160 climate experts along on its journey from decarbonizing itself as an enterprise to helping clients do the same. The DCoE will build on internal know-how and existing client projects to articulate a more concrete portfolio of sustainability services—while also baking sustainability into existing services. Showcasing this new capability, Atos is supporting RheinEnergie’s digital transformation efforts toward a goal of more sustainable energy sources alongside delivering a carbon-neutral factory for Innocent Drinks.

At a recent strategy session, we delved into another leading service provider’s case studies and outlook for sustainability in the energy sector as it looks to seize the opportunity to drive the sector’s transformation. Technology providers are thinking the same…

Technology providers are embedding sustainability in their capability and making it native to their offerings; customers realize it’s a must-have

As oil and gas giants shift toward “energy” narratives, they’re entering two-way relationships with the main hyper-scalers for technology and services centered around sustainable goals. Microsoft is a recent example: with BP, it’s co-innovating to reduce carbon emissions, better engaging with customers and governments, and furthering its adoption of Azure. Shell is doing much the same (as well as supplying Microsoft with renewable energy as part of its commitment to decarbonize).

Salesforce is pushing its Sustainability Cloud platform as a one-stop-shop for business leaders and auditors to assess enterprise emissions from the shop-floor (through internet of things [IoT] sensors, for example) through to supply chain emissions (collated via company-wide processes and ERP systems).

Similarly, IBM and The Climate Service recently partnered to help financial institutions and businesses measure and quantify climate risk through a combination of IBM Cloud, Red Hat OpenShift, and The Climate Service’s software platform and domain-specific expertise.

KPMG and Accenture keep tussling at the helm of sustainability services ecosystem

KPMG, long prominent in auditing, reporting, and consulting throughout sustainability services, recently announced a pending patent for a blockchain-based Climate Accounting Infrastructure (CAI). Clients will be able to better measure, report, mitigate, and offset their emissions under ESG requirements. Data (including integration with IoT sensors) is brought together, recorded on blockchain, and combined with analytics for insight on how to improve environmental performance simultaneously with business and financial KPIs.

KPMG also partners with a variety of industry groups, technology companies, and specialists to incorporate emerging technology capability for sustainability objectives. Renewable Energy Certificate (REC) assurance is one capability we’ve previously highlighted that KPMG and Allinfra are working together to provide.

Accenture, alongside a $3 billion investment to create Accenture Cloud First, has been outlining the decarbonization potential of cloud migration: a 6% reduction in IT emissions equaling 60 million tons globally of CO2 per year. As enterprises look to the cloud for survival and reinvention, the win-win potential of cost savings via a green recovery is clear to see. Accenture is also bolstering its company-wide commitments.

This comes alongside our deep dives into Accenture’s prior work with the UN that emphasized business leaders’ shifting priorities beyond shareholder value—despite many challenges—and partnership with SAP and 3M to launch ambition guides that action recommendations through technology and enterprise software solutions.

The Bottom Line: Sustainability will be a huge growth area for the services economy. Executives are building out their ecosystems of sustainability partners for a green recovery.

For providers, there’s a market there to take—whether that’s by embedding sustainability in their existing services like technology vendors or in setting up unique business lines like Atos’ DCoE.

The term “sustainability services” may not roll off everyone’s tongues just yet—but the market has moved past bubbling under the surface and is rapidly expanding. Previously, it was a case of being a leader, but now it’s about catching up. Proactively engage your existing clients and partners now—before they find what they need elsewhere.

 

Sign in to view or download this research.

Login

Lost your password?

Register

Insight. Inspiration. Impact.

Register now for immediate access of HFS' research, data and forward looking trends.

Get Started