Why the time is ripe for the Anthesian approach...
From its inception in 2013, Anthesis set out to be different, calling itself "the sustainability activator" and demonstrating a strategic mission to facilitate change at a deeper level. The c500-strong UK-headquartered consultancy has recently announced several new developments, including a substantial investment from Palatine Private Equity; becoming a B Corporation; and a strategy to help clients eliminate 3GT of carbon dioxide by 2030 (EA 09-Mar-21).
CEO and co-founder Stuart MacLachlan explained to Environment Analyst why he believes converging global agendas and alignment of sustainability with profit make this the time when Anthesis will come into its own.
EA: Congratulations on achieving B corporation accreditation. How does this affect operations and strategy for Anthesis?
SM: If I had to use one word, it means validation. Being a B Corp makes us assemble what we're doing in a more coherent way and identify the gaps. It holds us accountable for delivering against the journey, the objectives and the mission we have committed to. It calls for a consistency and robustness of reporting. Achieving B Corp is a high bar.
B Corp status harmonises the conversation between employees, investors and clients, because it allows us to look through a lens that sits right at the heart of those stakeholders, where planetary and societal factors are deemed to be just as important as economic ones.
It also helps our staff and clients to recognise that we take these things seriously and we are practising what we preach. And it's good to be part of the B Corp community: everybody is authentic, as opposed to just ticking boxes.
From a timing perspective it was interesting for us, having just started the process of securing investment [from Palatine]. It helped us to tease out who we felt were the best investment partners for us. If we had come across investors who were wondering what this B Corp thing is all about or who weren’t sure about refocusing our mission towards multiple stakeholders, it might have led us to think they weren't the right partners for us.
EA: Can you tell us about your plan to save 3GT of carbon by 2030?
SM: When we get to 2030, we want to look back and know that we have done something to positively move the dial.
Of all the clients currently registered under SBTi [the science-based targets initiative] we are consultants for about 10% of them. The SBTi forces organisations to benchmark their current performance, then set their targets and devise a roadmap that enables them to deliver the net zero future.
We deploy our expertise to produce the information and data that goes into this exercise, and having that data allows us to measure the impact we are making within the marketplace. We've got the data, we can see our growth path, and we know where we're aiming to be by 2030, so it’s not hard to see how we can steer a course to reach the three gigatonnes target.
EA: How do the stringent financial terms of private equity investment sit with your central mission of sustainability?
SM: Palatine understands that we’re mission led. So rather than saying, can we deliver on our mission and still deliver economic returns, we turn the question around and say to them: we’re delivering on this mission; do you believe the journey we're on is going to deliver the economic returns you are interested in? Because this is where we are going.
We have found that our mission is so ambitious and so important that it is driving superior returns. And we're keen to demonstrate through our relationship with Palatine how aligning the work we do with the deployment of capital can deliver a positive impact for both that mission and our investors. These things are not always aligned, but they should be.
EA: Does that mission influence how you select and work with clients?
SM: The clients that understand the value of what we're doing are the ones that don't just want to tick a box but want to do something meaningful. They are also the ones who are going to help us with our economic performance. Again, we see an alignment in terms of those drivers as opposed to conflict.
There is recognition amongst our clients that sustainability and ESG are now driving sales, delivering operational efficiencies, making supply chains more resilient, enhancing brand value. These are all mainstream drivers of organisational value and sustainability is now at the heart of that.
We are working increasingly with the C-suite or with middle management or CSOs who need to engage with the C-suite – because they are no longer on the periphery but are now working at the heart of the organisation. We give them the tools and the narrative so they can communicate the value of what they're doing to the people in decision-making positions.
The rate of failure of sustainability programmes is still way too high. That is because sustainability programmes are typically implemented in a fragmented way – either organisationally fragmented, because departments are not collaborating, or fragmented in terms of the different technical disciplines. Trying to implement a carbon strategy in isolation of water, of waste, and of the circular economy just doesn't work.
To decarbonise within the next eight years and move to sustainable business models needs a massive amount of collaboration. We've added expertise in depth across the sustainability disciplines. And we've expanded the breadth of the organisation by bringing in people from business, brand strategy, finance and property backgrounds. I don't think there's any other organisation in the world like this: we’re in a category of one. This is one of the reasons why we're knocking it out of the park when it comes to growth.
EA: Do you have any observations on the US market?
SM: The US market has been exciting for us since we started the business seven and a half years ago. We've been growing strongly since, and now we are blessed with a huge amount of opportunity in the market, including with enormous, US-based multinational clients who are very serious about making a difference. For them to be able to meet their targets, they have to embrace their global supply chains, and since we have a global platform, they engage us to engage with their supply chains. So it has a cascading effect.
And now the North American market is getting more spicy because of Biden. The pendulum has swung. There's a lot more climate action and commitments as we’d expect. The change that was happening is now accelerating.
EA: Last year you referred to the "liminal space" into which the pandemic crisis had brought us. What are your thoughts on that now?
SM: The liminal space as we describe it is that period between when one era ends and another era starts. It happens very rarely in history, in times of unparalleled change. At these times some people hunker down and just do whatever they need to do to make it through. We say the opposite: this is the time, if ever there's a time, to lift our heads up and try to influence change.
We've been saying for years that we need something to break the economic system and the political system. COVID, notwithstanding the tragedy, which is immense, has exposed and even broken a lot of flawed systems. This gives us the opportunity to put things back together in a different way, in a more ambitious, more effective way to tackle the major crisis today, which is the climate crisis.
But we're still in the liminal space. When we come out of the COVID liminal space, arguably, we might want to revisit the definition of liminality. We might be in a different liminal space brought about by climate change.
EA: How was the COVID year, and looking ahead how does 2021 look, for Anthesis?
SM: Through 2020 we achieved strong, double-digit organic growth, and our growth in EBIT exceeded our growth in revenue.
That's not to say that COVID did not impact our numbers. For example, we have a big contract in Spain where we deliver education services to thousands of groups of people every year using the exhibitions in museums. Obviously, that was impacted. But we were pleased with the way we navigated COVID. We had to be extremely dynamic in terms of the decisions we took as we went through the year, to be able to maintain the strength within the business, and the momentum.
Now we feel we are in a good place. We believe that with Palatine on board we have the right investment partner. That gives us the potency not just to support the organic growth but also to be able to have meaningful conversations with potential acquisition targets. The acquisition pipeline is already building.
COVID-19 still remains the headwind. But this moment in time in the market is like nothing we've experienced before in our careers. We are hiring like mad, we're growing like mad and we're building the infrastructure, which includes transitioning a lot of our business to digital. Digital can do a lot of the heavy lifting. It also helps us to decouple our growth from the constraints of available, human resources. For the world to be able to deliver what is needed inside a decade, companies like us need to grow exponentially. In my view, you can only realise exponential if you have a strong digital component to the business.