How Consulting Firms are Adapting to Environmental Concerns
Business consulting firms are becoming sustainable consulting companies. This is a response to calls for environmental business ethics and sustainability.
But what do these terms mean and what should companies be doing about them?
Environmental business ethics and sustainability – some definitions
The terminology used around environmental business ethics can be confusing and overlapping.
Let’s clarify some of it:
Sustainability in business
Sustainability in the business context refers to all the effects companies have on the environment and society.
Companies are being pressured to come up with strategies to address these effects. On a global front, the issues include
- Climate change
- Depletion of natural resources
- Human rights issues, such as racial, gender, and income inequality
- Fair working conditions
Triple bottom line
Many companies have adopted “triple bottom line” reporting. This means they measure and report on profits, but also on the company’s environmental and social impact.
Some people call this the three P’s: profit, planet, and people.
It emphasizes the link between financial and non-financial performance.
Environmental, Social, and Governance (ESG) criteria
ESG criteria are standards for how companies should operate:
I. As a steward of nature. Criteria might include
- Energy use
- Waste and recycling/li>
- Treatment of animals
II. In its relationships with employees, customers, suppliers, and the communities where it operates
III. In its business practices, including
- Shareholder rights
- Executive pay
- Accounting and internal controls
Corporate Social Responsibility (CSR)
CSR is another term that refers to a company’s impact on society and the environment.
It involves strategies that will deliver benefits to stakeholders, such as
- Engaging with neighboring communities and promoting their development
- Health and safety measures
- Mitigating environmental damage
- Responsible sourcing
- Fair labor practices
- Ensuring fairness, equality, and inclusiveness
There is an overlapping of meaning for these terms.
For the sake of simplicity, we will use
- “Sustainability” to cover all of these meanings, and
- “Sustainable consulting companies” to represent all the business consulting firms that offer services related to a company’s impact on the natural and social environment.
Why Should Companies Be Concerned About Sustainability?
The number one reason given by 45% of companies surveyed by McKinseyin 2020 is to comply with regulations and meet industry expectations.
However, many were also considering long-term strategic investments where ESG issues have a bearing on their organizations or could create new revenue streams. They will be tapping into the growing market for sustainable goods. Thus, they will identify new products, groups of customers, or geographic locations.
Other reasons for attention to sustainability include:
- Company reputation.
- Meeting the expectations of employees. Young employees, in particular, are concerned about environmental issues.
- Increased efficiency and waste reduction.
- Improved access to capital.
Investors are increasingly looking at ESG or sustainability as a critical factor in investment decisions.
- For example, Goldman Sachs Asset Management has issued a statement on responsible and sustainable investing. It starts with: “We believe environmental, social, and governance (ESG) factors are important tools for identifying investment risk and capturing opportunity.”
There is some debate about the cost of sustainability.
Promises of revenue gains or cost savings may be a long time coming. A McKinsey survey on how companies capture value showed that only 22% reported small to modest returns, and about the same number reported increased costs. However, double that number anticipated returns in the next five years.
The companies that did have positive financial returns displayed a common set of management practices:
- Sustainability was a strategic priority, with specific targets.
- Sustainability formed part of the corporate culture.
- Employees were trained on how to incorporate sustainability into their work.
Companies may want to consider getting advice from sustainable consulting companies to ensure the most effective ways to meet ESG goals.
Examples of sustainable strategies for companies
Sustainable consulting companies undertake various projects to assist companies with policies and operations based on environmental business ethics.
A list of projects undertaken by sustainability consultants at Consultport gives an idea of the impact of these interventions.
Reduction in supply chain
This project was aimed at cutting costs and reducing carbon footprint. As a consequence, it led to more efficient use of resources and encouraged the use of local resources.
Carbon footprint labeling
A wholesale company wanted to track carbon emissions on a product basis.
Using carbon labels increased customers’ perception of the value of each product. Furthermore, labeling highlighted areas for improvement in the production processes of suppliers.
Internal Sustainability Policies For Companies
Through internal sustainability policies, business consulting firms may help companies inculcate sustainability into their corporate culture.
Here are some examples of what might be included:
1. Minimize carbon emissions
Many companies set a goal for zero carbon impact and start with small steps:
- Air travel is restricted. Staff use trains or taxis and as many meetings as possible are conducted remotely.
- Energy usage is reduced. For example, they use energy-efficient light bulbs on circuits that automatically turn off when the room is not in use.
2. Minimize waste and maximize recycling
On a larger scale, the “circular economy” aims to reduce wastage and ensure that as much as possible is reusable and renewable. Companies can contribute in small ways:
- Reduce paper wastage.
- Reduce printing by providing reports in soft rather than hard copy.
- Restrict the number of pages each employee can print – and remove individual paper waste bins.
- Use double-sided printing.
- Recycle waste paper.
- Recycle printer cartridges.
- Reduce the use of plastic.
- Eliminate bottled water in the office and request the same from business partners.
3. Educate customers on the company’s sustainability policy
Environmentally conscious clients will appreciate what you are doing. Those who aren’t may learn to be.
4. Identify suppliers with sustainable credentials
Holding others accountable is a way to increase your environmental impact.
For example, companies could
- Check the supply chain of printer cartridges for its offices.
- Use catering companies that support regenerative farming practices.
The role of sustainable consulting companies
Increasingly, environmental business ethics are required for company reputation and reporting.
This is called by various names, including Triple Bottom Line, The Three P’s, Environmental, Social, and Governance (ESG), Corporate Social Investment (CSI), or Sustainability.
Whatever you call it, putting the proper measures in place can impact the natural and social environment in which your company operates.
Fortunately, there are experts at sustainable consulting companies who can put you on the right track. They will ensure that the steps you take will benefit your company and the environment.
Feeling a bit at sea? Talk to Consultport about your needs, and they will find the best sustainability consultants to steer the ship.