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We\u2019re still clueless about sustainability. Key people, in key organizations, in key rooms, still need help with contextualizing their roles and where to best spend their time and energy. Here we run over some musing across the global context, sustainability services, the energy and utilities industries, and the supply chain. If you make it to the bottom, you\u2019ll find the last sources of optimism in the hand of both services firms and the increasingly powerful coalitions of the willing, hoping to overcome the failures of politics and apologize later.<\/p>\n
COP28, the UN climate summit series\u2019 next installment in the UAE, will likely be as useless as COP27. See our recent take on why mediocrity at COP27 was worse than its implosion<\/a>. Organizations we speak with are often lacking in materiality assessments and the roadmaps that need to encompass the whole global sustainability context<\/a>. Too often their energy is easily diverted to the latest problem.<\/p>\n Probably not. But in a few years, probably yes. The Economist has a good take<\/a> on the all-but-death of the Paris Agreement target.<\/p>\n Almost certainly on both fronts. Here\u2019s a good Guardian compilation of an Oxford University summary<\/a>. Floods, fires, droughts, and more will continue to reinforce that policy, and the public cannot move at the speed and systems-level required to tackle climate change and the global sustainability context covering all environmental, social, and governance (ESG) factors. It\u2019s already too late for so many. It\u2019s now a question of how bad it gets for how many until we can pull it back. Adaptation and mitigation must go hand-in-mad. Mercifully, most have realized this\u2026 but funding for both remains far below what is necessary (refer again to our COP27 take<\/a>, including comments on the long-awaited inclusion of \u201closs and damage\u201d)<\/p>\n North America and Europe made a head start on many fronts but now the energy transition, more progressive governments, and a search for the business value in sustainability. Our Data Viewpoint builds on Exhibit 1<\/a>.<\/p>\n Exhibit 1. North America and Europe still dominate sustainability demand. But soaring growth is global<\/strong><\/p>\n Source: HFS Research, 2022<\/a><\/p>\n Our latest data shows that almost all organizations are upping their ambition, priority, and, crucially, spending on sustainability, and the biggest $50 billion+ firms with the systems-changing influence we need are leading that charge. Wait until our sweeping energy transition study is published early in 2023 for more. That spending will go across digital and physical technology. Technology like digital twins, IoT, and analytics will continue to fuel asset management and optimization, moves towards smart grids, new customer experiences, and much more. While infrastructure will see pouring funding across hydrogen, carbon capture, and all manner of renewable sources, as well as natural gas as a transition fuel away from the worst polluters.<\/p>\n Again we\u2019ll see growth in spending across value chains from planning through to after-sales. Crucially, circular economy efforts will continue to get new context, although far from what we need. Look out for an important circularity in the chemicals industry case study, where we\u2019ll look broader at minimizing impacts across the sustainability factors in a product\u2019s life cycle\u2014including efforts to recirculate, repurpose, reuse, remanufacture, reduce, repair, and recycle.<\/p>\n We expect approximately 240%, 190%, and 210% growth in revenues, headcounts, and client numbers, respectively, over the next two years (see Exhibit 2). Together, the 18 leading sustainability services firms currently account for more than $13 billion annually, 68,000 employees, and 22,000 clients that are either dedicated to or partly engaged in sustainability services. Consider pure management consultants, technology and platform giants, engineering powerhouses, and services firms outside the leading 18, and we\u2019d estimate a $50 billion and growing sustainability services market. A few years from now, we\u2019re looking at $200 billion. See more in our assessment of growth drivers<\/a>, and the full market analysis here<\/a>.<\/p>\n Exhibit 2. The sustainability services market is approaching $200 billion<\/strong><\/p>\n Source: HFS Research, 2022<\/a><\/p>\n All manner of services firms will move from trying to embed sustainability internally through upskilling, hiring, acquiring, and repositioning\u2014and towards embedding these skills and needs with their clients. We\u2019ll see vastly varying results. See our more detailed outline<\/a> of the various internal, client-facing and systems-changing efforts. Acquisitions and partnerships will both come from all services angles\u2014and sustainability small-medium firms will continue to see so much investment that poor analysts like us will not be able to keep up. But do ask us if you fancy finding a winner\u2026<\/p>\n My last prediction of sorts for 2023 is more optimistic than my general assessment of the global sustainability context. We\u2019ll see more and more \u201ccoalitions of the willing\u201d. Businesses and key leaders within them will continue to find each other to move first and set the bar politics and the public can be pulled in alignment with. There\u2019s an essential need to give the vast majority of organizations\u2014whether business or government\u2014the confidence they\u2019ve desperately lacked to date without regulation and best practices. Imagine<\/a> is one such group.<\/p>\n I can only hope 2023 brings enough clarity for the right people, right organizations, in the right rooms, to be the opportunity and responsibility to go publicly out in front and give the world the templates it needs to align to the global sustainability context.<\/p>\n Exhibit 3. The global sustainability context addresses all UN Goals and ESG factors and must cascade across systems and throughout organizations<\/strong><\/p>\n Source: HFS Research, 2022<\/a><\/p>\n We\u2019re still clueless about sustainability. Key people, in key organizations, in key rooms, still need help with contextualizing their roles…<\/p>\n","protected":false},"author":3,"featured_media":5305,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59,954,871,869,100],"tags":[297,619,739,743,799],"ppma_author":[32],"yoast_head":"\nAre we going to hit a 1.5-degree temperature rise in 2023?<\/strong><\/h3>\n
Will we see climate related disasters and system tipping points?<\/strong><\/h3>\n
Sustainability movement will be global, however, which does bring promise<\/strong><\/h3>\n
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<\/p>\nSpeaking of the energy transition<\/strong><\/h3>\n
On supply chains<\/strong><\/h3>\n
Sustainability services growth and investment will continue to soar across consulting, technology, engineering, and business services<\/strong><\/h3>\n
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<\/p>\nPossibly more importantly<\/strong><\/h3>\n
The Bottom Line: We\u2019re still unbelievably f******. We need to keep helping people with context. But my optimism is the <\/strong>clarity businesses are experiencing<\/strong><\/a> that they hold the last levers.<\/strong><\/h3>\n
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<\/p>\nHFS subscribers can download the report here<\/a>
\n(available free for a limited time)<\/em>.<\/h3>\n","protected":false},"excerpt":{"rendered":"