Sustainability: Priorities are Evolving with Continued Relentless Momentum
- Video / Webinar
As businesses come under increasing scrutiny of their sustainability performance, putting it at the heart of your commercial strategy is now a priority. Rebecca Scottorn looks at how letting sustainability influence every business decision is the key to a long-term, sustainable future.
I’m Rebecca Scottorn. I'm a partner based in our London office. I sit in our Industrials practice and lead our sustainability work. I think sustainability is one of the most complex issues facing corporates and investors probably over the next decade. I think part of the complexity is that so many of the issues are interrelated, there are lots of interdependencies, and it's quite challenging figuring out how to make some of the trade-offs and priorities. So as well as having to tackle sustainability, obviously executives are trying to figure out how to balance that with financial priorities and growth priorities as well. And I think a lot of people are treating sustainability as a siloed issue, whereas actually it needs to be embedded as part of your strategy and as part of every decision that you're making.
Increasingly, clients are battling with really tough issues, such as how to embrace the energy transition, how to think about clean tech opportunities, how to think about decarbonisation. It's really important that we can address all of those. We definitely see opportunities arising from sustainability, and that might be to mitigate risk or create value, new products and services, new customers, new revenue streams. It's really important that companies think about it holistically rather than just a compliance issue or a burden to be mitigated, and that way it can really be seen as front and centre for a company's priorities.
I think resilience is a really key part of this, and what we've seen over the last couple of years is how important that is — thinking about how to future-proof your business, how to make sure that your business will exist in a decade's time. And actually, it's really critical to start thinking about both the growth opportunities and how to make sure that you are protecting against any downside risk as well.
I think the pandemic has taught us a couple of things that we can think about. One is that we are woefully underprepared to deal with systemic risk, and I think we all need to learn lessons from that and apply them to the climate crisis. I think the other thing is recognising that we can actually change. We can change really quickly. We can change very substantially. And when we put our minds to it — both the consumer, the average person, as well as the corporate and everything around that culture — I think we've surprised ourselves by how well we can change and adapt.
I think things with sustainability are evolving really quickly, so it perhaps started out as a compliance or a risk management issue and then companies have moved to setting very ambitious, long-term targets. However, I think that those long-term targets are going to be seen as insufficient in the short term, and actually what's needed is to think about what actions you can take in the next few years, five, 10 years, and how you start making changes now that will have more of an impact than a very abstract long-term goal.
I think another part of that, and what we're going to see more and more of, is more scrutiny from all stakeholders — not just have you got your target in place, which is now frankly becoming very commonplace, but what actions are you taking? What are you doing now? And I think there's going to be a lot more questions asked of businesses about how they're expecting to achieve their targets. When we founded L.E.K.'s Sustainability Centre of Excellence, there were a few things that we really wanted to emphasise. I think one of those is recognising that L.E.K.'s got deep expertise in the sectors that it works in, and so that's really important because that's what clients need. They need the deep sector expertise.
I think the second thing is recognising that these issues cut across sectors, and that's why we've brought together this group of partners as part of the executive board. And also the regional aspect there is really important as well — what can we learn from other regions? I think the final thing that sets L.E.K. apart in the way that we think about sustainability is the fact that we don't treat this as a siloed issue. We combine it with growth strategy, with commercial business model, transformation, thinking about M&A and the impact on investments.
So it's taking all the things that are the most critical commercial issues and making sure that sustainability is part of those decision-making processes. There are lots of sustainability specialists out there. L.E.K. combines sustainability expertise with strategic expertise, and that's what we think is really critical for businesses. Companies need to know how to make trade-offs, where to prioritise, how to allocate capital, what the right commercial decisions to make are — and that's where we come in.