Launching our next ecosystem analysis: the Sustainability Services Top 10

The Situation: HFS Research will extend our mapping and analysis of the sustainability services ecosystem across consulting, technology, and services firms. We will rank its leading players across our value chain (Exhibit 1). We will produce detailed breakdowns of their ability to execute, innovation, and customers.

In November 2021, we spoke at COP26, the UN climate summit, about the desperate state of sustainability. We then published our Sustainability Services Ecosystem Mapping study covering the consulting, technology, and services firms that can and must change this. In 2022, we’re taking forward three sustainability themes: transition planning, “whose responsibility is sustainability?”, and methodologies to replicate sustainability at scale. Our HFS Top 10: Sustainability Services, 2022 market and ecosystem analysis will build on all of this; we have scheduled publication for September. We will engage participants in April, and we hope to work closely with many of you.

Sustainability, for us, includes all environmental, social, and governance (ESG) elements. We also refer to the “global context” encompassing the desperate need to decarbonize—to net-zero emissions by 2050 at the absolute latest—and address all 17 UN Sustainable Development Goals covering all ESG factors. The fact we have goals for sustainability is a massive advantage. Yes, the goals that make up the global context need refinement and detail the transition planning underpinning them, but contrast this to the last 10 to 15 years in which organizations chased the vague specter of digital transformation without an endpoint in sight.

Exhibit 1: The HFS Research sustainability services value chain covers consulting, technology, and business services aligned to the global context

Source: HFS Research, 2022

Three sustainability themes must dominate 2022 for organizations and their consulting, technology, and services partners

We built these three lines of strategy and action on the mapping and COP26 studies referenced above and our conversations in both the organizational and the consulting, technology, and services spheres.

1. Transition planning must align in organizations and across industries under the global context. More than 80% of organizations don’t have the plan they need for sustainability (see our separate take). Yes, COP26 marked a move from ambition and goal setting to transition planning and delivery, but the gold standard examples are the top 20%, if not the top 10%. We’re talking about basic roadmapping: a goal, a starting point benchmark, and a journey plan. Transition plans must be the sustainability focus for 2022 (see our separate outline). Transparency of value chains and ecosystems is another critical element of benchmarking a roadmap’s starting point (see our highlight report).
2. Whose responsibility is sustainability? Organizational-level roadmaps must break down throughout the organization into metrics, targets, incentives, and accountability for all functions, including supply chain, finance, and operations. But there is a large disconnect between the CEOs and boards and the rest of organizations; this was a central conclusion of our presentation to COP26.
3. Methodologies and scale: We can’t afford for all organizations to start from scratch. Given how far behind organizations, industries, and governments are in addressing the global sustainability context—if everyone starts from scratch, we’ve lost. Consulting, technology, and services firms work with numerous clients, and they are plugged into all manner of global networks and ecosystems; they have the license to scale best practices. We need them to, thus our forthcoming HFS Top 10: Sustainability Services report.

Our Top 10 will map the consulting, technology, and business services firms targeting sustainability outcomes with their clients

We are considering firms that can bring the full picture across the value chain in Exhibit 1, whether via their internal capability or partnerships addressing the value chain elements another firm has decided not to focus on. We will not include pure management consulting firms or technology firms where software or hardware, rather than services, is the focus. We will include engineering and EHS (environment, health, and safety) firms that have developed capability across the developing “primary report focus” areas of the value chain outlined in Exhibit 1 instead of the mature EHS and wider sustainability services spaces.

We will dive into firms’ abilities to execute: their scale, resources, growth, outcomes delivered, internal sustainability, delivery ecosystem, and the extent to which sustainability has been integrated throughout a firm’s whole portfolio across industry, technology, and business function services (some consider this as “making sustainability native”). We will look at their capacity for innovation: their use and development of technology for sustainability, innovation ecosystems, and strategies and visions. In our voice of the customer assessment, we will analyze case studies and engage with client references.

The Bottom Line: The world needs to change. Consulting, technology, and services firms have a massive role

We’re far behind in addressing the global sustainability context of decarbonizing and meeting all 17 UN Goals. Consulting, technology, and services firms have a vital role in helping organizations and industries plan and meet these goals. They can shape transition plans aligning to the global context, break them down throughout organizations, deliver the technology, execute plans, and manage day-to-day processes. They can also replicate best practices and success stories on the global scale we need. This is all true in the public and private sectors. COP27, the UN climate summit scheduled later this year in Egypt, will test the extent to which governments have put together the transition plans they promised last year at COP26. I’m hoping that the results of COP27 combined with the next six months of foundational research we have planned at HFS will give us the knowledge we need for making the biggest impact possible through sustainability services.