Not a lot of there, there

With business and government leaders recognizing climate change as no longer a question of “if” but of “when,” a growing number of global and boutique management consulting firms are stepping into the market to offer climate strategy solutions. Many firms are relatively new to the scene, or have a recently defined focus on climate-related issues. While some are doing real climate strategy work, the market is far from mature, and firms with a wide range of experience and expertise are jockeying for position in advance of an anticipated wave of climate regulation.

Climate strategy offerings vary tremendously from firm to firm, from greenhouse gas inventories to broader sustainability offerings designed to transform an organization’s entire culture. The firms offering climate strategy-related services vary widely as well, with many bringing long-time experience in specific industries, such as IT or engineering, rather than management or strategy consulting.

IBM Consulting, for example, targets the IT sector with services that include greening data centers. Arup, an engineering and design firm, conducts carbon-footprint analyses and develops climate action plans for clients that range from cities such as Dongtan, China, to developers to transit agencies, including the Bay Area Rapid Transportation (BART) system around San Francisco. Edelman, a public relations firm, has a sustainability practice that helps companies with communications strategy, public-private partnerships and public affairs. 

At global strategy consulting firms, including Accenture (NYSE: ACN), The Boston Consulting Group and McKinsey, consultants have been pumping out white papers and other intellectual property in an effort to position themselves as leaders in the sustainability sector. McKinsey, a private 14,000-person firm with annual revenues in the $4 billion range, offers climate change services under a special initiative, but declined to talk with Sustainable Industries.

The Boston Consulting Group, a 7,000-person firm with an estimated $2.3 billion in 2007 revenues, offers services such as carbon dioxide (CO2) abatement strategy, alternative power generation (including clean coal, wind, solar, geothermal and biomass) and integrated water resource management within its sustainable development practice. Balu Balagopal, senior partner and managing director of the sustainable development practice, says the firm has worked on 300 engagements, from alternative energy to carbon market strategy, but refused to say how many consultants are working in the practice. He did, however, say there is “a dedicated leadership team, a dedicated support consulting staff, and a vast base of people who work in these areas that is growing by the day”—which hardly suggests a mature practice.

Despite the emergence of such dedicated practices, industry analysts question how many clients are buying. “It’s looking a lot to us like there’s not a lot of there, there” says Dan Daly, director of strategic relations at Kennedy Information, which tracks the management consulting industry. “They tend to be warm-fuzzy sustainability projects that tend to be more about posturing and communications than changing the carbon footprint or manufacturing processes.”