Competencies for Sustainability Consultants A Moving Target in a Changing World By Linda Lovett

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1 October 2012 Early this year, the International Society of Sustainability Professionals (ISSP) collaborated with New York City-based research, advisory and consulting firm Green Research on its 2012 survey of 1,548 sustainability consultants from around the world. i The following article is the second in a series that ISSP is publishing to provide further insights from the survey data and other research and to address the questions: 1. What is the market for sustainability consulting? 2. What are the key competencies a sustainability consultant should have? 3. What are the key associations and tools a sustainability consultant should know about? Competencies for Sustainability Consultants A Moving Target in a Changing World By Linda Lovett Introduction Today, a majority of sustainability consultants are working on strategy and planning projects, probably because many companies are still in the early stage of sustainability planning and implementation. Such projects tend to call for skills that are the mainstay of management consultants: communication, problem solving, change management, team building, etc. However, research suggests that over the next decade sustainability consulting will evolve to be more tactical, technical, or project-oriented as sustainability becomes part of the core business strategy of companies and organizations. Rapid changes taking place in the world also will change the mix of services that companies require from sustainability consultants. Generalist skills will still be in demand, but consultants that also have special expertise in particular industries and business functions may have an edge over general strategy consultants International Society of Sustainability Professionals 1

2 Key Competencies for Today Two studies conducted by ISSP and in collaboration with Green Research indicate that a majority of sustainability consultants are engaged in strategic planning. The ISSP project, initiated in 2009, surveyed 385 sustainability professionals 36% of whom were consultants about the top skills needed for success as a sustainability professional. ii When asked to rate the importance of pre-defined hard skills, the most important items cited were strategic planning (78%), systems thinking (72%) and project management (67%). Figure 1: Hard Skills Needed for Success Now Percent rating Extremely High Importance (6-7 on 7-pt. scale) Source: ISSP Sustainability Knowledge Competency Study, 2010 The findings in ISSP s 2010 report track with what sustainability consultants are actually working on today, according to the Green Research/ISSP survey conducted in early 2012: 56% of respondents said they were working on Strategy development and planning and 43% cited Project planning and management. Figure 2: Most Common Business Areas that Projects Focused on in 2011 Percent selecting business areas (all that applied) as a focus of client projects in Source: Green Research Sustainability Consultant Survey, International Society of Sustainability Professionals 2

3 When respondents to the ISSP competency survey were asked to rate soft skills, those considered most critical were communication with internal and external stakeholders, problem solving, and inspiring and motivating others. Again, the responses align roughly with the areas of client focus identified in the Green Research/ISSP survey: Training (37%), Employee engagement (33%), External stakeholder engagement (30%), and Marketing/communication (28%) were all in a second-tier cluster of common business areas. Like the higher-ranked category of strategy development, work on internal and external communication and stakeholder relations may be areas where many companies still require help as they establish or refine their sustainability programs and initiatives. Figure 3: Soft skills needed for success now Source: ISSP Sustainability Knowledge Competency Study, 2010 Percent rating Extremely High Importance (6-7 on 7-pt. scale) Issues and Challenges Both the ISSP competency survey and the Green Research/ISSP consultants survey asked respondents to rank the importance of sustainability-related business challenges. Out of 18 pre-defined items on the competency survey, respondents gave highest rankings to those four issues related to demonstrating the value of sustainability in terms of getting buy-in, proving the business case both internally and externally, and getting funding for sustainability initiatives. Close behind were issues of maintaining focus on sustainability in the face of changing business priorities and overcoming internal resistance to changes that result from implementing sustainability related initiatives. Consultants perceptions of key issues and their importance varied somewhat from sustainability professionals working in non-consulting organizations. The latter tended to be more concerned than consultants with educating customers and with staying current with scientific findings while consultants were more concerned with developing business cases, 2012 International Society of Sustainability Professionals 3

4 getting buy-in from top management, and benchmarking. Funding for individual initiatives was somewhat more important to consultants and those in government, education and nonprofits than to those in manufacturing/services. Figure 4: Importance of Sustainability Issues Top Tier Source: ISSP Sustainability Knowledge Competency Study, 2010 Likewise, financial concerns ranked highly in the business challenges cited by consultants in the Green Research/ISSP survey prospects lack budget, the sales cycle is long, clients are unwilling/unable to meet the consultant s price as does the need to educate clients. In the case of consultants, it is likely that educating clients is necessary both to win and to successfully carry out contracts. Figure 5: Top Business Challenges for Sustainability Consultants Percent rating Extremely High Importance (6-7 on 7-pt. scale) Percent selecting these areas as greatest business challenges. Source: Green Research Sustainability Consultant Survey, International Society of Sustainability Professionals 4

5 Competencies for Tomorrow The ISSP competency study and the Green Research/ISSP survey asked about very different things top skills as opposed to business areas in which respondents had worked so one must be careful not to force conclusions. What can be said is that the studies paint a clearer picture of what today s sustainability professionals are called upon to know and do. The findings of both indicate that the hard skills and areas of business focus currently in high demand (e.g., strategic planning, project management) tend to be more generic and crosscutting than those further down the list (see Figures 1 and 2). The more specific and specialized the responses (e.g., vendor management/supply chain/procurement, technology/engineering/scientific expertise, transportation and logistics, packaging), the fewer times they were cited. As noted earlier, this is most likely because many companies are still in the early stage of sustainability planning and implementation. Respondents might also have used Strategic planning and Project management as buckets for activities that were not specifically defined by the survey questions. Another reason may be that the sustainability profession has drawn a fairly significant number of people from the management consulting field about 25% if those with backgrounds in organizational development, change management, and quality management are included who are now performing similar roles in the sustainability arena. Figure 6: Consultants Prior Work Experience Percent employed in these fields prior to working in sustainability/csr consulting. Source: Green Research Sustainability Consultant Survey, 2012 The top hard and soft skills identified in the ISSP competency study are the bread and butter of management consultants. According to study respondents, these skills will be in demand for the indefinite future because they are necessary for bringing about transformational change, providing a business (and a consultant) competitive advantage, envisioning a strategic approach, and fostering performance tracking and accountability International Society of Sustainability Professionals 5

6 However, over the next decade, the mix of services that companies require from sustainability consultants is likely to evolve in the face of significant global change. As noted in last month s ISSP Insight article on the sustainability consulting market iii, industry analysts predict that sustainable business spending will continue to grow in the next decade, driven by powerful forces such as: strict environmental regulation; competition to enhance and differentiate brands; consumer demand for sustainable products; investor and stakeholder expectations to control risk; and innovation in energy efficiency, renewable power, resource productivity, and pollution control. Moreover, the nature of consulting work is evolving in response to market forces. The Institute of Management Consultants (IMC) USA defines the fully competent consultant as one who has a combination of skills to manage and deliver strategic and tactical solutions to clients. Among them are some of the more generic skills already identified in the ISSP and Green Research studies: change management skills, technical and business knowledge, project delivery and risk management, interpersonal skills, etc. IMC USA adds the following observations about the next generation of management consultants: The boundaries of what constitutes management consulting are becoming blurred. Larger consultancies are offering services spanning strategy to outsourcing. There are low barriers to entry for individual practitioners, and thus clients are becoming more selective buyers. Clients are demanding specialized technical knowledge or skills provided by the expert not the generalist. The balance is shifting from traditional IQ based measures to emotional intelligence as predictor of excellence and success. The future of work is changing. New organization models and growth in networked practices are impacting the future work of adults. The value of information is diminishing as availability increases. Effective sourcing and application of knowledge is becoming a differentiator. iv This rapidly changing scene has implications for sustainability consultants. For instance: 1. As sustainability becomes a core business function, the numerous small firms now doing strategic planning for corporations could lose ground to conventional large consultancies, which have long managed mainstream business needs. These include general consulting firms like Accenture, Deloitte, KPMG and PwC; engineering firms that provide environmental consulting such as ARUP, CH2M Hill and Fluor; and environmental consultants such as ATC Associates, ERM, Ecology and Environment, and Environ. Collectively, those firms employ thousands of professionals but most do not identify themselves as sustainability consultants International Society of Sustainability Professionals 6

7 2. The importance of promoting an understanding of the value of sustainability one of the major challenges cited in the ISSP competency study will decrease as sustainability becomes mainstream. Conversely, the other top issue of climate and energy issues can be expected to increase in importance in five years. Consultants with expertise in these and other specialized industries and business functions, which currently rank low on the ISSP and Green Research surveys may have an edge over general strategy consultants. 3. Sustainability consulting firms must be able to live with uncertainty and complexity. Survival may depend on carefully monitoring the megatrends, engaging with diverse stakeholders, expanding competencies to provide a wide range of expertise and services, becoming more global, and increasing analytic capabilities. 4. When seeking work, consultants should target a broad array of departments in a company not just the sustainability group. According to a recent Green Research sustainability executive survey, a quarter of firms were planning to expand the budgets of their sustainability departments in 2012, while fifty percent of firms planned to increase spending on sustainability initiatives across their companies. In addition, sustainability consultants would do well to study the competencies of effective leaders. As a recent BSR report says, Leadership is not demonstrated when someone from the C-suite issues a set of specific edicts, but rather when those individuals develop objectives, strategies, and a disciplined plan that both guide and respond to the best people and ideas across an increasingly diverse portfolio of markets and business functions. v Sustainability consultants must know how to attain buy-in from top management for whom they are working, but they also are often leaders of or within their own organizations. They must understand how the companies that employ them differ from others and how to differentiate their own consultancies in an increasingly competitive market. How To Develop Sustainability Competencies? Sustainability consultants have diverse educational and professional backgrounds and perform diverse roles in the sector. Corporate responsibility and sustainability practitioners are well educated, with undergraduate degrees the norm and postgraduate degrees commonplace. The professional background most mentioned in the Green Research/ISSP study was environmental work of some sort, but it was shared by just 31 percent of respondents. Management consulting and engineering are also relatively common. Beyond those fields, a wide variety of professional backgrounds are found, but none shared by more than a small percentage of respondents. These include legal, government, auditing, journalism, city planning, real estate and construction. Sustainability practitioners also perform diverse roles in their workplaces. There is no standard model of where corporate responsibility and sustainability teams sit within the organizational structure of corporations: some are stand-alone departments, while others are part of another function/directorate (increasingly part of the Corporate Affairs function, especially in large 5,000 people plus companies). vi This suggests that companies position the sustainability team where they believe it will have the most impact or that there is still uncertainty about how best to align sustainability with the mainstream of corporate activity International Society of Sustainability Professionals 7

8 This diversity no doubt contributes to the success of sustainability programs by offering different ways of thinking and innovative approaches to problems. However, it is also largely responsible for the difficulty of developing a qualification akin to those in areas such as human resources, project management, and accounting. Information gleaned from research such as the ISSP competency study and the Green Research/ISSP consultants survey is making an important contribution to the creation of relevant curricula to prepare professionals for the field as well as to help employers determine requirements for newly created sustainability coordinator positions. In the next issue of this newsletter, we will discuss which professional associations and certifications are most valuable in helping corporate responsibility/sustainability consultants develop their professional competencies. About the Author: Linda Lovett specializes in integrating sustainability practices into the core strategies and functions of organizations. She began working on environmental and corporate social responsibility issues while employed as a business research analyst for Hewlett-Packard. She subsequently earned an M.B.A. in Sustainable Business from the Bainbridge Graduate Institute and served for five years as the Sustainability Supervisor for the City of Corvallis, Oregon. i Global Sustainability Consultant Survey, 2012 Green Research: ii The Sustainability Professional: 2010 Competency Survey Report, International Society of Sustainability Professionals. Available on ISSP website. iii Sustainability Consulting: Riding the Wave of Opportunity. ISSP Insight, September iv IMC USA s Competency Framework and Certification Scheme for Certified Management Consultants (CMC ), Institute of Management Consultants USA, June 18, v Sustainability and Leadership Competencies for Business Leaders, BSR, October 2012: vi CR and Sustainability Salary Survey 2012, Acre Resources, Acona, Ethical Performance, Flag International Society of Sustainability Professionals 8