ESG Trends & Service Provider Responses

Context:

• ESG is not a new phenomenon, however, the attention it is receiving amongst corporates has completely changed in the past few years.

• Our client, a service provider, was considering focusing more of their investment in ESG-related offerings, but at the same time they had competing demands for investment from other growth areas.

• In order to make a well-informed investment allocation, our client needed a better understanding of what corporate clients were focusing on, and challenged by, in terms of ESG. They also needed to understand customers views on the relative strengths of service providers across different components of the evolving ESG space, in order to develop innovative and differentiated solutions.

Accelerated’s approach:

• A multi-disciplinary team, supported by a recognised ESG expert delivered the research which included 12 interviews. The engagement took three weeks and included subject matter experts from senior roles such as Head of Sustainability, ESG Risk Vice President, and Head of Climate Change Planning.
• The 12 interviews spanned 5 corpoates (oil & gas, retailers, vehicle manufacturers and mass transit operator), 2 investors (large investment company and infrastructure fund manager), 4 service providers and an international council developing ESG standards across its industry participants
• The research provided insights into ESG focus areas and pain points for both the buyers and providers of ESG related services

Learnings:

1. Climate-related components of ESG are where, unsurprisingly, a major change in focus has occurred. This is due to increasing external pressure (primarily investors followed by customers and community) as well as employees.
2. Senior executives are engaging more and taking greater direct ownership. There is no shortage of grand statements, but there is less evidence of plans and action beyond ticking off the low hanging fruit in carbon emission reduction. Many corporates are playing catch up and are still woeking to define a plan of what to do, how to do it, and how to measure it
3. Many sustainability teams are struggling under the workload of proliferating disclosure and reporting frameworks. This is hindering their ability to actually mitigate risk, manage key areas such as energy transition and realise competitive ESG advantage. Additionally many don’t have a sizeable budget to deliver business change.
4. It is a crowded service provider market with providers battling for recognition and the ear of senior executives. Their workloads are increasing and they have been consolidating – partly because they want to have a broad suite of capabilities and partly due to strategic investments in internal and external data/analytics/AI as a new wave of ESG value-added.

Accelerated‘s model of sourcing and interviewing infield experts provides consistently successful outcomes for our clients. Get in touch to see how we can provide the right intelligence and insights for your strategy team.