Independent consultants more concerned about carbon footprint

28 January 2019 Consultancy.eu

Seven in every ten independent consultants are concerned about the effects of their carbon footprint on the environment, a new poll has revealed. The survey also found a marked difference in the attitudes of men and women, with the latter significantly more concerned than the former.

As the world lurches toward an apparent point of no return, where human beings will no longer be able to reverse or even minimise the impact of man-made climate change, tackling the carbon footprint of businesses and individuals has become more important than ever before. A carbon footprint is historically defined as the total emissions caused by an individual, event, organisation, or product, expressed as carbon dioxide equivalent.

In line with the corporate world as a whole, the consulting industry is making an effort to be seen to be doing its part regarding the matter. In the US, this has seen top-tier management consulting firm Bain & Company named a 100% CarbonNeutral company by Natural Capital Partners. The Boston-headquartered firm was also awarded a gold rating by EcoVadis, which ranks the ethical and environmental impact of global corporations’ supply chains. Meanwhile in Europe, the United Nations has hired consulting firms Mercer and Oliver Wyman to serve as expert advisers on a project examining climate-related risks and opportunities to decarbonise for financial institutions.

Independent consultants more concerned about carbon footprint

When it comes to the independent consulting scene, however, it is more difficult to get a reading on how important the issue is to the individualised sector. Without sustainability departments managing the activities of independent consultants, they theoretically have fewer points of contact to influence their activities, or ensure that the size of a carbon footprint is at the front of their minds, while chasing profitability and ultimately working to pay the bills.

Now, a survey among 382 independent conducted by Comatch has found that awareness has increased in recent years. On average, 71% are more concerned about their carbon footprint than they were five years ago. While this also means that 29% of respondents are no more concerned, even in light of a gradually deteriorating environment where droughts, heat waves and bleak winters have become commonplace, it does suggest that the majority are moving in the right direction when it comes to addressing the issue.

Divides

The finding is particularly important because consultants are a group of professionals which travel a lot. The most, in fact, if a poll by job site Indeed is to be believed, with the average management consultant spending up to 80% of their working time away from home. Strategic advisors and interim consultants are hired for short periods of time, while implementation consultants typically have projects of six months or more – both groups commute daily from their home to the office of the client. Clients can be based anywhere in a country or internationally. 

The consultants surveyed by Comatch were exclusively independent consultants, with a relatively senior profile, while the majority held previous roles at big consultancies such as McKinsey & Company, BCG, Bain & Company, Roland Berger and the Big Four. According to the research, younger age groups are more concerned than the older age groups, while women are more concerned than men. On average, 84% of women were concerned about carbon footprints compared to five years ago, while men only scored 67%.

Of the kinds of transport used for long-distance engagements, flying is the most common form. For a majority of consultants to be saying they are concerned with carbon footprints, but then still plumping for the mode of travel which will inflate their fown ootprint the most is something of a contradiction. While the data does not distinguish between domestic and international flights, it is a relatively safe assumption to make that many independent consultants could knock their carbon footprint down a notch or two by trading in the comforts of a business class seat to simply take a bus from London to Manchester.

At the same time, the train is the most popular form of transport among consultants. 60% of women said they would prefer to travel by train, along with 43% of men. Again, a number of these individuals might well be able to trade plane for train tickets on their route to a client, with only 25% of women preferring to use planes, and 39% of men. To this end, more than 81% of women say that if possible they now choose to use the train instead, but clearly this preference is not translating into a concrete actions. The same can also be said for men, 52% of whom had the same inclinations.

Commenting on the results, Tjeerd Wijffels, Director Business Development BeNeLux at Comatch, said, “The consultants in our network travel a lot to roles they can apply their expertise to. The majority are concerned about their carbon footprint, but to limit it depends on the distance, time and costs.”

Related: Bain's Jenny Davis-Peccoud spells out the importance of sustainability.

Profile

Europe's energy efficiency services market to reach €50 billion by 2025

02 April 2019 Consultancy.eu

The growing climate change awareness as well as improvement to technology have lifted the market for energy efficiency in Europe to almost €25 billion. Growth will accelerate in the coming years, with the market set to double to €50 billion by 2025. The landscape remains fragmented however, according to a new report.

Climate change mitigation remains a key priority for much of the world – failure is noted as one of the world’s biggest risks going forward. Efforts to meet the Paris Agreement target of no more than 2.0°C warming by 2100, with a strong preference for 1.5°C, mean that transformations of various industries remains a priority. While reductions in the use of fossil fuels is a key part of wider moves to reduce global emissions, improvements to the efficiency of energy produced is a second avenue of improved energy outcomes.

Analysis regarding the improvement to energy efficiency for Europe show that considerable gains will need to be made over the coming decades to meet the region’s commitments. While governments have been keen to push for improvements in the space, companies too have sought to improve their energy efficiency, both to reduce long-terms costs as well as meeting their own goals related to reducing their carbon footprints.

EES is set to become a key European market

In a new report by Roland Berger, the authors analysed the market for energy efficiency services and products (EES), aimed at improving the energy efficiency of buildings, physical assets and business processes. In Europe, the most in demand service is engineering, focused on mobility technology, building technology and process technology, with the total market value estimated to be around €9.5 billion. Contracting, focused largely on energy supply, generates market volumes of €6.6 billion, followed by consulting at €5.2 billion.

As Europe ramps up attempts to reduce the energy waste in many of its systems, demand for services is set to rise significantly in the coming five to six years – at a CAGR of 8% across the various market segments. The market volume is projected to jump from €26 billion to almost €50 billion in the period up to 2025, in the process becoming a "key market in the European industrial landscape.” Software is forecast to enjoy the highest increase in demand, at a CAGR of 14% for the period, followed by engineering at a CAGR of 9%.

Businesses ownership remains split

While the consulting firm has projected strong growth for the market in the coming decade, various challenges for growth are also noted. This reflects the market’s diffuseness and fragmentation, and its relatively competitive nature, as well as the technical difficulty and sophistication of the space. While there are a range of companies focused primarily on developing propositions in the EES space, many established companies are also creating solutions for the space as a diversification strategy of their core propositions.

Fragmentation is the highest in the software industry, where around 60% of total EES activity stems from non-EES focused companies. The consulting segment is the most mixed, with 70% of companies operating in the space having a business focus within and without the industry. Contractors tend to have the strategic focus on the energy efficiency services market, at 70%, followed by operations-focused companies at 60% and engineering focused companies at 50%.

M&A intensity

The fragmented picture in part reflects the effect of acquisitions that are not well aligned with wider business processes and outcomes. Over the past five years around 100 deals were made in the space. Energy services specialists are the keenest to invest, according to Roland Berger, at 38% of the total, followed by utilities at 16% and investment funds at 11%. However, the researchers note that in many instances the deals were not well matched to the buyer’s wider business model, or were experiments in the segment, which sometimes created risks on their current business model.

For players to succeed in the market, the authors have three pieces of advice. “Players can succeed by following a few relatively straightforward principles. They must build a compelling business case for their customers, using levers such as digitalisation and cost of delivery. They must pursue smart growth through mergers and acquisitions, taking great care not to kill off the entrepreneurial spirit of their newly acquired firms. And they must ensure that they themselves have the right internal setup, with the required flexibility to accommodate strong growth businesses.”