I’m a bit down on commercial management consultancies. Most have been a major part of the sustainability problem. At the HQ level, thought leadership has sometimes been good, occasionally great. But the coal-face-reality of sustainability implementation has often been very different. Mainstream management consultants often don’t get what their sustainability colleagues are going on about. And anyway, the sustainability teams are minor profit centres, so that proves they are irrelevant, right? However, when I saw this short (10 minute) interview with a consultant – Accenture’s main sustainability expert in Asia, Peter Lacy – I was pleasantly surprised Link
Is this the mark of a management consultancy stepping up to be part of the solution, or yet more HQ blah blah? You will have to make your own mind up. But what I like about Lacy’s comments is his acknowledgement that things are going too slowly, both in terms of business ‘execution’ on sustainability and systemic ‘transformation’. He highlights the incredible 7.5 x reduction in carbon intensity that we need to deliver in every product and service to move to safer environmental levels.
Lacy is also explicit about the ‘dialogue of the deaf’ between CEOs and investors. But he’s being too nice….In most cases, it’s a dialogue between the deaf and the dumb. What’s impressive though is that Lacy – and remember his clients are corporates – doesn’t do the easy thing and just blame investors, as many corporate and some CSR professionals still do. Indeed he speaks about the fact that very few people in business get ‘systems thinking’, i.e. the ability to see where change is needed throughout the system and how it might be achieved.He is equally plain speaking about investors: “The mainstream [is] totally absent from the sustainability conversation,” he says, highlighting a survey of Global Compact CEOs, who said their investors came last or second last in terms of awareness of sustainability. This is something that PRI and ICGN members – who boast significant market share today – should consider carefully when assessing their collective impact on sustainability to date. I look forward to the time when ESG folk speak so directly. I’m not saying Lacy’s pitch is perfect; whose is? He could, for example, have been clearer by saying that just because something is systemic doesn’t mean it is a recipe for despair. It’s simply that our symptom focused, ‘Band Aid’ solutions won’t work to patch up such mega-scars. That said, I love his optimism that sustainability could come to be seen like e-commerce or globalisation: a force for progressive growth. But I understand why he isn’t totally explicit about his big fear: that it will take a mega crisis for us to wake up. Lacy doesn’t, and probably can’t, say that we are already in the throes of the “great disruption” as author Paul Gilding terms it: Link. Sadly, it’s way beyond the pay grade of ESG/CSR professionals to do so. Fortunately there are some people who are saying things very clearly. At the end of 2011, Fatih Birol, Chief Economist for the International Energy Agency, said current levels of consumption and greenhouse gas emissions “put the world perfectly on track for a six-degree Celsius rise in temperature. . . . Everybody, even schoolchildren, knows this will have catastrophic implications for all of us.” Link
Sadly, children seem to be more intelligent on these
matters than CEOs or mainstream investors. Don’t get me started about politicians, especially of the free market ideological species or “progressives” who don’t want to be attacked for being too different from the consensus.
But let’s get back to consultants. When Accenture can name clearly the reality we face – not just eco-resources crises but also societal tensions reaching melting points in many countries – they will become an even bigger part of the solution. As their client awareness grows, they will benefit. So yes, I do think consultants could help save the world. The big question for each of us is not about Peter Lacy, but ourselves. Are we part of the group that can do ‘systems thinking’ interventions? And how quickly can we, acting together, tip our own professional communities and employing organisations into being a bigger part of the solution than is the case today?
The reality is that “CSR1.0” has ‘failed’, to quote another expert, Wayne Visser. He highlights the triple curse of CSR: its ideological commitment to incrementalism (even when incrementalism cannot work), its peripheral-ness to real business, and its tendency to ignore anything that doesn’t have a short-term business case (often calculated in quite simplistic cost-benefit models). Link parallels with responsible investment are obvious.
Rio+20 is a good time to choose to acknowledge this reality and begin to adapt. The good news is that the ways forward have broadly been mapped out. Although each sustainability ‘guru’ likes to draw a slightly different route, there is significant overlap between what John Elkington, Michael Porter and other sustainability thought leaders are saying. Visser, for example, argues for a shift from paternalistic to collaborative CSR. By this he means a move from risk- to reward-based CSR; from image to performance driven sustainability; from CSR led by marginalised specialists to CSR that is scaleable and mainstream; from CSR which comes in standardised, often western led forms, to one which is global and more adaptive. Corporate social responsibility thus becomes corporate sustainability & responsibility.
Whether it’s this, or Porter’s “shared value” or Elkington’s “breakthrough capitalism” framework, the ONLY thing that’s certain is that trying to get to this radically different outcome with minor variations on the present is doomed to fail.
Raj Thamotheram is an Independent Strategic Adviser, Investment at Raj Thamotheram Associates