Global management consultancy Kearney has said that it is the first management consultancy in the world with approved net-zero targets from the Science Based Targets initiative (SBTi). It has targeted achieving net-zero greenhouse gas (GHG) emissions by 2050.
Management consultancy Kearney announces SBTi-based net zero targets.
The consultancy sector is increasingly competitive over the market potential for the sustainability services sector and we should expect to see more concrete action.
The big question is the reputational risk associated with client actions and whether they are truly transitional or an excuse for business as usual.
As pressure continues to mount across the board for decarbonisation action, and the UN describes the latest climate science from the IPCC as ‘Code Red for humanity’, the chances of the global economy limiting global temperature rise to 1.5˚C seem increasingly slim, but achievable if all sectors on the economy engage appropriately.
In a statement, Kearney said that its targets represent a significant commitment to reducing absolute net-zero emissions in the short and long term, and are the first of their kind to be approved by the SBTi for a management consultancy.
It is worth noting that PwC had its net zero targets validated by the SBTi in 2021, but as its a professional services company, you could argue that they are different. PwC has plans to reduce greenhouse gas emissions by 50% in absolute terms from 2019 levels by 2030 in line with a 1.5 degree scenario. PwC’s targets also go beyond scopes 1 and 2 emissions to include PwC’s largest indirect scope 3 emissions.
Kearney’s targets are absolute and in line with a 1.5˚C pathway
Kearney’s commitments to reducing emissions in the value chain and reaching science-based net-zero targets are aligned with the 1.5˚C pathway. From a 2019 baseline they include:
- Reducing absolute Scope 1 and 2 GHG emissions by 50% by 2030
- Reducing absolute Scope 3 GHG emissions from business travel by 30% by 2030 and all other absolute Scope 3 emissions by 30% in the same timeframe
- Reaching 100% renewable energy in Kearney offices by 2025 and continue annually sourcing 100% renewable electricity through 2030
- Ultimately, reducing absolute Scope 1, 2 and absolute Scope 3 GHG emissions by 90% and reaching net-zero GHG emissions across the value chain by 2050
Alex Liu, Managing Partner and Chairman at Kearney, said: “To be the first management consultancy firm with approved Net-Zero science-based targets is an incredible achievement. As consultants, the biggest sustainability impact we can create is through helping our clients with the opportunities and challenges in the transition to a low-carbon future.
“We need to act fast, we need to act now, and we need to base our actions on science if we are to have any chance of meeting our necessary goals. With this milestone, we are living up to our vision to lead in sustainability, while continuing on our double-digit annual growth trajectory, and demonstrating global leadership for our industry to follow.”
It is positive that the consultancy has committed to net zero targets, although it will be interesting to see the extent to which it pulls those targets forward over time. Given the short time frame for action, the most credible plans seem to have targeted nearer-term net zero goals.
Questions remain about influence and impact
While it is encouraging to see recognition from Alex Liu that consultancies have a powerful impact through working with clients to help them decarbonise, the debate about which clients to take money from continues to grow. Kearney currently works with more than three-quarters of the Fortune Global 500, as well as with government bodies and non-profit organisations.
The financial sector is currently facing serious questions about what they provide funds for, both in terms of equity and bond portfolios. Many companies are beginning to respond with portfolio decarbonisation targets.
NGOs such as Influence Map are beginning to track not only financial engagement, but they are also assessing the connection between corporate statements on net zero goals and Paris alignment, with their spending on anti-climate legislation. The advertising industry is starting to ask questions about the ethics of advertising products and services with significant negative impact.
The consulting industry may need to take a long and hard look at how market sentiment and the associated reputational risk may change over the next couple of years. This week has seen PricewaterhouseCoopers announce a deal with Climeworks to buy carbon removal credits and it will be interesting to see how the market develops.
Given the enormous growth potential in the sustainability services market, and the expenditure many consultancies are making in terms of buying access to data and analysis as well as recruitment, this cannot be ignored.
SBTi is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF), to drive ambitious climate action in the private sector by enabling organisations to set science-based emissions reduction targets.