ESG net zero road image

BY NICK COTTAM

Do as we say and do as we do is a good starting point for any conversation between a consultancy and their client and this has been the case, you could argue, around net zero. Consultants, particularly specialist environmental & sustainability firms, but also the big engineers and management consultants, have set out to lead by example, helping their clients negotiate along what can seem like a fiendishly complex set of pathways towards the nirvana of carbon net zero.

"This is our time to shine," is how WSP’s David Symons put it recently, as part of the online panel discussion for member firms organised by Environment Analyst on 2 February 2022. "We need to be at the heart of a net zero, resilient and prosperous economy," said WSP’s future ready innovation leader.

In an open, free-ranging discussion — also involving sustainability leaders from AECOM, Anthesis and ERM - Symons and his peers gave their own perspectives on some of the big net zero challenges to date and those that lay ahead. Net zero, they agreed, had to be taken in the wider context of ESG – a new modus operandi if you like for doing business against the backdrop of a just transition. 

We’re all in this together

The recent panel discussion, ESG Strategies: Consultancies in the race to net zero, followed on from a new report of the same name by Environment Analyst, an original benchmarking exercise to update on who is doing what in this area and to unravel some of the complex terminology and often diverse strategies being undertaken to reach the holy grail.

"No-one gets to net zero unless we all get to net zero," was how Chantelle Ludski, the North American CEO of Anthesis, summed up the challenge. "This is a huge initiative which we all need to lean in together."  

The online event explored a number of themes and offered up comments around some of the questions which are already punctuating the path to net zero for consultancies and their clients. What were the best practice learnings on the journey so far? What surprises had there been and what were the implications of net zero targets for project work and client selection? And what are the next steps for consultants as they seek to keep up the momentum while at the same time keeping a business-savvy eye on the priorities of their clients, from the most energy-intensive oil & gas company to those who are already well on the way to a low carbon business model.

ESG Strategies Panel Discussion screenshot

Cut through the jargon

All agreed that there had to be more collaboration, less complexity and more context to make net zero appear more meaningful and more achievable to a wider audience. "For many organisations, both within our sector and outside, this can be mighty confusing," said WSP’s David Symons. "We have to try and keep it simple and cut through the jargon."

AECOM’s Lucy Bradbury, the firm’s sustainability manager and global ESG training and development lead, highlighted the importance not only of sharing experience but of a just transition. "We must single out the idea of a just transition so that nobody gets left behind," she said. Firms struggling to pay high-energy bills and overcome the problems of disrupted supply chains and staff shortages will sit up and take note. Net zero requires a new mindset for all concerned and so too does a global economy still grappling with the problems of COVID. "We are operating in a different world than even a few years ago," said Bradbury "and factors such as the energy crisis in the UK has made us realise that we can’t take anything for granted."

In her introductory presentation at the session, Bradbury reminded the audience of the significance of last year’s sixth assessment report by IPCC, which she described as a "code red" for humanity. A sea change in both culture and behaviour was needed, she said, and nothing could be taken for granted on the road to net zero. The IPCC reported warned that without immediate, rapid and large-scale reductions in greenhouse gas emissions, there would be little chance of limiting warming to 1.5°C or even 2°C.

Live by your values

Linden Edgell, ERM’s global sustainability director, reiterated the message that now was the time for the environmental consulting sector to show leadership. "We have no credibility in advising clients and in advising stakeholders unless we ourselves are on this journey," she said. "Some of our clients are leading and some are lagging but as key influencers and advisers we can’t shy away from our responsibilities." The Environment Analyst report is a reminder that passionate staff working in the environmental industry expect as much. "Sometimes you’ve just got to live by your values," is how Temple Group CEO Mark Southwood puts it. "Some of our people are very ethically minded," he noted "and as an SME we can make things happen."

Larger multidisciplinary firms such as AECOM and WSP must work hard to spread the word internally and they can have significant influence on their clients, working with them as they do on major projects in different parts of the world. As ERM’s Edgell and her fellow panelists agreed, this is where net zero policies will inevitably have to be nuanced, depending on the location of an office or project. This nuancing could be necessary, for example, where ESG-related executive compensation packages are concerned, which for carbon "we haven’t quite found the right way yet," she said. At WSP, Symons revealed there had been a voluntary initiative encouraging staff to measure their carbon footprint for life outside work. Employees who hit their carbon target were paid a bonus on top of salary and those who missed the target paid into an environmental community fund. Here was a test for that staff passion and an initiative which led to about a 10% reduction in their collective carbon emissions.

All panellists agreed on the importance of Science Based Targets initiative and the onus on consultancies and their clients to achieve absolute emissions reductions. EA’s report reveals that 84% of the leading ‘Global 25’ E&S consulting players have signed up to SBTs as have all of the management consultancy and Big 4 audit firms assessed in the study. A key challenge, suggested EA editorial director & cofounder Liz Trew in her introduction to the session, was comparing different carbon counting methodologies and reporting frameworks. Furthermore, the differing definitions and language used around ‘operational net zero’ versus ‘full value chain net zero’ for example can be confusing and make it difficult to make like-for-like comparisons. To date, she added, only about half of the firms covered in the report had published scope 3 targets, itself a measure of how difficult it is proving to look out across the value chain

As noted above the larger firms tend to have more influence with both their suppliers and their clients, arguably making it even more important to demonstrate a rigorous set of processes on the road to net zero. 

Sharing the experience

"Scope 3 is definitely the hardest piece of the puzzle," admitted Chantelle Ludski, whose firm Anthesis was founded as recently as 2013. Even with the world opening up again, "we benefit enormously by being a pretty virtual organisation," she said. A key element of the firm’s advice around net zero was to get client organisations to think about carbon reduction before setting targets. "You have to look at everything you do and question it." Answer those questions and you can start the process of setting targets, gathering data, measuring progress and reporting on it. All agreed that sharing information and collaborating to find better ways of doing things was critical, both for leaders and for those who were trying to follow.

"The scale of the data alone is a big challenge," commented AECOM’s Lucy Bradbury. "The supply chain piece accounts for 90% of our emissions year on year and we’re having to take deep dives with suppliers cutting across all business lines. As far as scope 3 goes this is a whole piece of work on its own and initially we’re targeting our top 500 suppliers by spend. This is an ongoing programme for decades to come."

Again the muscle of being a large international consultancy counts in making things happen on the road to net zero. As the EA report notes it can form part of a virtuous circle of low carbon advice feeding back into low carbon procurement. Do as we say and do as we do.

NZ virtuous cycle

Source: Environment Analyst report (ESG Strategies: Consultancies in the race to net zero)
----------------------

This panel discussion is available on-demand here for Strategic Members of Environment Analyst. If you are not a Strategic Member and would like to watch the discussion, please contact our Membership Development Manager Lisa Turner on +44 (0) 1743 387050 or lisa.turner@environment-analyst.com. 

To discuss the impact of these market trends and disruptors on the environmental and sustainability consultancy sector, and hone strategies on how to respond to them, join us at our annual Business Summits.

Identify market opportunities and share thought-leadership with other environmental and sustainability business leaders, through a series of keynote presentations, expert-led panel debates and roundtable discussions.

UK Business Summit 2022 (22 June, London)

Global Business Summit 2022 (23-24 August, Denver and 7-8 September online)