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Climate Change Business Consulting; A Review Of Major League Players’ Strengths And Weaknesses

| Monday July 21st, 2008 | 1 Comment

climatechange.jpgResearch into the best business consultants on climate change issues reveals that the bigger the consultancy, the better value for money you get. A report by Verdantix, a British consultancy, concludes that of 16 major league consultants, IFC International scored best.


Verdantix, which itself is based in London, says that its critical analysis pointed out that the efforts by IFC International amounted to top of the range quality. “IFC International leads the pack”, Verdantix consultants said in a press release. They pointed out that the consultancy’s long track record in climate change consulting as well as its in depth environmental expertise, business analysis skills and the capability to deliver engagements in energy intensive sectors and service sectors. “These elements put ICF International at the forefront of climate change business consulting”, Verdantix reports in a study entitled Verdantix Green Quadrant: Climate Change Business Consulting.
The firm’s researchers compared climate change consulting practices of 16 global consulting firms. Aside from IFC International, companies reviewed included the likes of IBM Global Business Services, BT Global Services, L.E.K. Consulting and Boston Consulting Group.
An overall finding of the research was that during 2008 all consultancies included in the survey reported that demand for external consulting on carbon markets and renewable energy issues to businesses is expected to grow by 200%.
The more focused service of consulting on specific climate change issues for businesses is expected to grow by 25%. David Metcalfe, the owner of Verdantix, commented that this growth is still very good.
Businesses that are serious about reducing their carbon footprint turn to outside consultants mostly if they have already implemented a few changes themselves and are ready for operational changes. The Verdantix study is excellent for those wishing to find out what which consultants are strongest on. Consultancies themselves have only just started to focus on the climate change issue and already there appears to be a wildgrow of variety even among the big league players. So business leaders are well-advised to subject external consultants to a rigorous review before hiring anyone.
“Climate change is changing from an environmental issue into an economic issue. As a result, managers responsible for implementing climate change programmes seek advisers who combine technical expertise with business advice and financial analysis skills,” according to the Verdantix report.
The firm says that what companies buying consultancy services are looking for is proven expertise in environmental affairs in combination with a business analysis edge. “This combination poses a challenge for new players entering the climate change consulting market,” according to Metcalfe. The emergence of certain standards in this business means that prices are hefty too. To some degree, the more expensive the price, the better the bigger players are positioning themselves in the market, which is nowhere near saturated by far.
“Firms can pick from a multitude of different consultancies attacking the market with different types of expertise and wide variations in consulting day rates”, according to the research. But one side effect is that companies hiring a consultant could pay for less than sterling advise or they might end up picking a consultant who has a totally different skill set than they are looking for. “The embryonic climate change business consulting market is set to boom but buyers must beware of untested offerings and gaps in consulting firms’ expertise”,the research report indicates, adding that “Confusion will increase as more players are poised to launch services.”
The Verdantix report judged the performance of the 16 major league consultancies after subjecting them to 74 evaluation criteria (which the firm published on its website) for carbon footprints, carbon management strategy in general, corporate climate change strategies, global carbon markets advisory and cleantech consulting.
Aside from the survey of 16 practice leaders of business consultancies, Verdantix interviewed a focus group of 15 buyers of outside climate change consulting services. One major finding of the interviews with the buyers was that those responsible for making the purchasing decisions within corporations appeared to be climate change experts themselves, not executives.
What’s more, companies are mostly spending their environment budget on carbon management and compliance. Most companies already had invested in carbon measurement and management advice and were planning to spend on compliance in the next 12 months. Opportunity analysis, carbon offsetting advice and strategy development are not priorities for 2009, according to the report.
On the side of the consultants, another major finding was that IT and strategy consultants had little success in coming across as credible among potential clients. “Despite the backing of strong brand names and investment in new climate change consulting capabilities, IT and strategy consulting firms have a long way to go to convince sceptical buyers that they are the right partner”, Verdantix reports.
Verdantix furthermore reports that specialist teams turn out to build momentum. “Firms that launched or significantly enhanced their climate change offerings in the last 2 years now have evidence of customer wins.” By contrast, recent arrivals appear to be in need to build ‘mindshare’.
Consultants that launched in the last 18 months and target specific industries or functions such as IBM Global Business Services, BT Global Services and L.E.K. Consulting fall in this category. IBM Global Business Services has an innovative offering for data centre and facilities energy efficiency. BT Global Services launched a sustainability offering in late 2007. L.E.K. Consulting focuses on strategic analysis of climate change challenges.
Meanwhile, pure strategy consultants were found to take a passive approach. Verdantix groups firms like Boston Consulting Group, Bain & Company and Booz & Company in this category and says they have not marketed their climate change consulting capabilities to the same extent as their competitors.


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