What can clients expect from ESG & sustainability consultants?
Expectations and realities sometimes diverge. That's why we want to take a look at the (relatively) new field of ESg- & sustainability consulting, what challenges client companies are facing, and what solutions the ESG- & sustainability consulting market already has in place.
Where do the client companies stand?
Many companies are increasingly recognizing sustainability as a business-relevant and a differentiating factor vis-à-vis customers, employees, and investors, e.g., even beyond the legal requirements. According to customer statements, the next-level topics in the area of sustainability identified in our latest study of the consulting market are:
However, the high priority given to the issue has not yet led to the same degree of change in strategies or the implementation of practical measures. In terms of sustainable transformation to avoid and remedy the problems caused by climate change, companies are still at the beginning of their major journey.
Where do the consulting firms stand?
It is therefore not surprising that ESG & sustainability consulting currently seems to be one of the top topics for the consulting industry. The ESG and sustainability consulting market has changed considerably and is developing rapidly: Bain, for example, created the "Bain Sustainability Academy" to train all its consultants on how companies can transform themselves environmentally and socially. There have also been more than 18 acquisitions of sustainability consulting firms in the last two years: BCG, for example, recently acquired Swiss sustainability specialist Quantis, McKinsey strengthened itself with Material Economics and Vivid Economics, and Accenture has also strengthened itself in the ESG field with Carbon Intelligence, Akzente as well as Avieco.
«There are only a few consulting firms that can already offer holistic ESG and sustainability consulting in its full depth and breadth»
But: There are only a few consulting firms that can already offer holistic ESG & sustainability consulting in its full depth and breadth. This is due to the diverse topics related to ESG & sustainability and the many sub-segments into which the sustainability consulting market is divided:
Source: Cardea AG
Client satisfaction and the biggest "gaps" of ESG & sustainability consultants
Consulting firms have shown that they all possess the required skills to support their clients in developing a sustainable business strategy, to embed sustainability in all functional areas or to define the business case for ESG. Conversely, however, our before mentioned study discovers that clients are generally not yet fully convinced of consulting firms' ability to deliver on high-quality customer services and provide comprehensive ESG strategy and sustainabilty consulting services.
«Clients are generally less impressed with the consulting firms' ability to offer wide-reaching ESG- & sustainability services and to deliver high value»
Client satisfaction rates with the performance of the consulting firms in their sustainability projects across all consulting categories (strategy and management consulting, Big4, IT consulting, etc.) average 3 (out of a maximum of 5). The biggest "gaps" of the consulting firms are perceived by clients to relate to the depth and breadth of sustainability expertise, technology know-how, and change capabilities.
The ESG & Sustainability Consulting Landscape
The consulting market for ESG & sustainability is broadly diversified. As in many other consulting fields, the market can be roughly divided into the categories of large, multidisciplinary management consulting firms, large auditors (Big4), technology consultancies, and larger or smaller specialists. Each category includes consulting firms with different characteristics, history and "DNA". But even within the individual categories, the diversity of the various providers is great, as indicated by the corresponding arrows in the map.
«Diversity between and within sustainability consulting categories is high»
All of the consulting companies shown have demonstrated that they have the necessary capabilities to drive sustainable change in various areas. The main purpose of the map is to assess the characteristics of the individual companies along two key dimensions:
Positioning in terms of ESG & sustainability services including business/strategy consulting, business model innovation, IT applications and implementation, and design, implementation and embedding of sustainable strategy into business operations.
Positioning with respect to the breadth & depth of the offering portfolio and/or the ability to accompany "large-scale" transformations.
Source: Cardea AG
How do I find the right ESG & sustainability consultant?
Each engagement with a potential ESG & sustainability consulting firm will vary in scope, budget, timeline, and goals. Therefore, it is important to understand where their core competencies lie and find the consulting firm that best aligns with your own internal strategy, organization and challenge.
«Clients need to evaluate exactly what kind of ESG and sustainability advice they are looking for»
Clients need to find out exactly what type of ESG and sustainability consulting services they are looking for and choose the right consulting firm accordingly - as there are a number of firms that have market-leading capabilities in one or more sub-sectors. Therefore, clients may also want to engage different ESG and sustainability consulting firms for different projects.
«Specialty firms can compete with multidisciplinary firms on an equal footing»
It's a fact, that specialist and boutique consulting firms can by all means compete on an equal footing with the large, multidisciplinary consulting firms. The map should therefore not be considered a "final assessment" on which consulting firms should be considered for a particular project. A company's specific goals and requirements play an important role in deciding which firms are potential candidates for an assignment.
How meta-consulting can help find the right ESG & sustainability consultant
Meta-consulting by Cardea provides support in all essential steps when it comes to choosing the right consultant:
Analysis of the consulting needs and definition of the evaluation criteria,
Definition and set-up of the consulting projects,
Initial market screening on potentially suitable ESG & sustainability consultants,
Identification and selection of the most suitable consulting firms.
Our "4Ws" for successful matching
Source: Cardea AG
We connect you with the right consulting skills and hidden champions
In the ESG & sustainability projects supported by Cardea, 47% of the clients chose specialized management consultancies ("hidden champions"), 13% chose one of the large management consulting firms, and another 13% chose an IT consultancy.
«47% of Cardea clients chose specialized management consultancies for their sustainability projects»
The rest is distributed among the Big4 auditors and other service providers - depending on the project, scope and type of consulting support sought.
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