In the US market demand for advice on climate change and sustainability is growing due to a dramatic shift in US climate change policy, the cost reduction potential of “green” programs and competitive pressure to implement a climate change strategy. Consulting firms that fail to establish their climate change expertise during 2009 will miss out on the biggest opportunity in the consulting market for 20 years, according to independent research conducted by Verdantix. The analysis of the US climate change consulting market applies 56 evaluation criteria to assess 19 consulting and professional services firms including BCG, Booz & Company, CH2M Hill, ENVIRON, ERM, Ernst & Young, ICF International, McKinsey & Company, PA Consulting Group and PwC.
“Despite the downturn, demand for climate change consulting is surging. President Obama’s climate change agenda, cost savings from energy efficiency and the need to compete on sustainability credentials drive demand” said David Metcalfe, author of the report. “Our analysis reveals that environmental and management consultants, audit firms and IT advisors are scrambling to upgrade their climate change services.”
The research, based on dozens of interviews with practice leaders and 15 buyers of consulting services, reveals that some advisory firms lack the depth of expertise to help – so they need to invest despite the recession. To clarify the alternatives for buyers in a confusing and fast-changing market, Verdantix analysed 19 consulting firms with its Green Quadrant® methodology.
Seven consulting firms stand out as Leaders. CH2M Hill and McKinsey & Company stand out – even among the leaders – due to the breadth and depth of their capabilities and proven track record over the last 2 years. Two Big Four firms, Deloitte and PwC, and environmental consultancies ENVIRON, ERM and ICF International are also positioned in the Leaders Quadrant.
The Verdantix analysis finds that consulting firms with specialist skills will surge forward. Buyers of consulting services should turn to Ernst & Young for cleantech advice, AT Kearney for sustainability strategy projects and Booz & Company for climate change strategy. Blu Skye and GreenOrder are an ideal choice for change programs. PA Consulting Group has the capability to deliver transformational energy efficiency and climate change programs.
The study also uncovered that not all consulting firms have invested in the development of their climate change services. Notably Bain & Company, Boston Consulting Group and KPMG US have done little to market their capabilities and credentials on sustainability and climate change.
The independent customer panel revealed that carbon management is their top priority: 73 per cent identified it as a significant initiative. Sixty per cent of the buyers of climate change advice that Verdantix spoke with, all working for $5 billion revenue US firms, said they invested in climate change strategy advice and greenhouse gas inventory projects in 2008. In terms of future spend, energy efficiency is top of the agenda for 2009.
The analysis concludes that buyers of sustainability consulting projects will need to select a portfolio of advisory partners due to the wide-ranging challenges triggered by sustainability and climate change.
Specifically buyers should:
* Target management consulting firms for strategy development. International strategy consulting firms like McKinsey & Company, Booz & Company and AT Kearney – score well in Verdantix’s analysis – and are best placed to advise on corporate climate change strategy. Environmental consulting firms, despite their deep climate change expertise, often lack strategy consulting skills.
* Hire specialist expertise for opportunity identification. Despite having less than 30 employees, boutiques like BluSkye and GreenOrder are well-aligned with climate change and sustainability product development and opportunity identification. For cleantech products CH2M Hill, Ernst & Young and The Shaw Group are good choices.
* Invest in advice that combines policy and financial performance. Deloitte and PwC stand out as the top choices for advice on policy and regulatory developments. Through their expertise in tax, regulations and financial management these firms can advise large corporates on how to exploit new climate and energy regulations for financial advantage.
* Source industry expertise for operational analysis. Firms in sectors with significant energy demands and emissions to manage, such as oil, gas, mining, power generation, chemicals and metals, should turn to consulting providers like CH2M Hill, ENVIRON, ERM and ICF International due to their deep knowledge of industrial processes.
