Consulting for Business Sustainability

Chris Galea, Chris Galea

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351279468
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The fast-emerging sustainability consulting firms are nipping at the heels of the established consultancy giants who are scrambling to find their way in the emergent field of sustainability. The upstarts are challenging many of the established notions of how to add value to their clients' operations. By looking at the business world through what the sustainability expert Stuart Hart calls "new sustainability lenses", sustainability consultants are able to make sense of challenges that are baffling their clients. Moreover, they are also beginning to help their clients uncover new and sustainable value streams, the ultimate goal of good consulting practice. In Consulting for Business Sustainability sustainability consultants from around the world offer some of their perspectives and lessons on how to truly create sustainable value for their clients. Packed with new tools, advice and approaches, the book comprises a unique collection of wisdom from some of the leading lights in sustainability consulting practice. The areas covered include: developing best-in-class environmental management systems; sustainable design; supporting organisational change agents; working with key stakeholders; social impact assessments; human rights; and regulatory risk. The book will be essential reading for practitioners in business searching for advice and toolkits on how to make their sustainability initiatives bear fruit, for consultants looking for advice on how others have provided value to clients, and for students of sustainability looking for best-practice examples and exploring future careers in this burgeoning field.

1
CSR consultancies in the United Kingdom

Jennifer MacCarthy
EIRIS, UK
Jeremy Moon
Nottingham University Business School, UK

This chapter investigates the role of consultancies in the development of companies’ corporate social responsibility (CSR) in the United Kingdom. The choice of the UK as a focus is especially propitious as it has been identified as a country with high CSR growth both in terms of the number of companies engaging in it and with regard to the breadth of what these companies do (Vogel 2005). It is quickly reflecting a new emphasis on ‘implicit’ rather than ‘explicit’ CSR (Matten and Moon 2008). The UK government has also been a conspicuous driver, not only in providing CSR incentives (Aaronson and Reeves 2002; Moon 2004) but most recently in the new Companies Act (2006) which requires companies to report their environmental, employee, social and community issues, including information about companies’ policies and their impacts.

It should be noted that companies can turn to sources of assistance other than consultancies for the development of their CSR policies. Companies also develop their CSR policies and practices with the assistance of their primary stakeholders (e.g. investors, employees, consumers); their secondary stakeholders with whom they may form CSR partnerships (e.g. charities, campaigning organisations, new social movements); governmental organisations; and business membership organisations (e.g. the London Benchmarking Group). Our focus, however, is on the role of consultancies in assisting companies with their CSR programmes and policies. The significance of this is, of course, that companies are prepared to incur costs in order to achieve some CSR objectives.

We adopt Fernandez-Young et al.’s (2003: 7) definition of a CSR consultancy: ‘a consultancy is only a CSR consultancy if and only if it offers services or products the principal intention of which is to influence its clients’ participation in CSR activities’. As this chapter is focusing on CSR consultancy in the UK, only consultancies operating in the UK will be considered. However, the consultancies do not have to be limited to the UK nor have the UK as the home country for their operations.

This chapter aims to improve our understanding of the CSR consultancy industry in the UK. In order to do so it will first show that the CSR consultancy industry is one that is expanding rapidly. It will then go on to highlight the scope of existing CSR consultancies while also presenting the core services that these consultancies generally provide. Third, using primary research, this chapter will highlight who is using CSR consultancies and what they are being used for. Finally, the chapter illustrates what the perceived advantages of using CSR consultancies are, both from the perspective of the companies using them and from the perspective of the CSR consultants themselves.

Methodology

In order to gain an understanding of the CSR consultancy industry in terms of how businesses choose to use consultants and their motivations for doing so, a variety of research techniques were undertaken. Initially a very brief questionnaire seeking predominantly quantitative data was sent to Business in the Community (BitC)’s ‘Top 100 Companies that Count’ from its Corporate Responsibility (CR) Index for 2006. BitC is a UK-based membership organisation that offers companies the opportunity to have their CSR strategies rated according to specific criteria. This occurs on an annual basis and the top 100 companies have their details published not only on the BitC website but also in one of the national broadsheet papers. The rationale for approaching these particular companies was that by taking part in the index and managing to be ranked in the top 100 it was clear that these companies were interested in the performance of their CSR programmes and practices. In light of this they were likely to provide insightful views on both the values and the motivations for using CSR consultancies.

Although the response rate (21%, n = 21) is relatively high by social science standards, we might reasonably assume that the respondents will be (a) more inclined to engage in CSR, and (b) more likely to employ consultants than the general population. As part of the questionnaire, respondents were asked if they were willing to take part in a telephone interview. From those respondents that agreed, eight were chosen, in order to represent a wide range of industries, as well as all of the four rankings of the BitC CR Index 2006 (platinum, gold, silver and bronze). A second group of telephone interviews was undertaken with two directors from a specialist CSR consultancy. Finally, an employee of BitC who has direct involvement with the CR Index was also interviewed in order to obtain an opinion that was outside the direct relationship between companies and CSR consultancies but which enabled a valuable insight into the use of consultancies. Secondary research was undertaken on the respondents’ websites in order to ensure that their responses to the questionnaires broadly conformed with the information available on their CSR websites and in their reports. Three companies provided extended responses to the questionnaire and the qualitative data from these responses has also been considered alongside the interview data.

TABLE 1.1 Industries of interviewees

Industry	Number of interviewees
Accountants and consultants	3
Construction and building materials	1
Gas, water and multi-utilities	1
General retailers	2
Speciality and other finance	1
Support services	2
Transport	2

For reasons of confidentiality, the names of the companies and the consultancies that provide information for this research will remain anonymous. However, the industries (according to BitC classification) from which the telephone interview respondents and the extended questionnaire responses came from are listed in Table 1.1.

It is also pertinent to reveal that, of the respondent companies, one was awarded the platinum grade in the BitC CR Index 2006, three were awarded the gold grade, seven were awarded the silver grade and one was awarded the bronze grade.

The consultancy industry in the UK

Size and growth

Wilson and Gribben (2001) point out that the range of companies providing CSR consultancy is broad and that the CSR consultancy industry is growing. They illustrate the breadth of the industry and show it to include professional service firms such as PricewaterhouseCoopers; specialist consultants such as AccountAbility; membership organisations such as Business in the Community (who charge for services beyond that offered with membership); business schools such as the Ashridge Centre for Business and Society; communications consultants such as Corporate Culture; and independent consultancies (a field with noted growth) including The SMART Company (Wilson and Gribben 2001: 452-53). In order to gain a stronger understanding of whether the CSR consultancy industry is growing, it was necessary to conduct an analysis of the current size of the industry and see how it has changed in size in recent years.

In 2003 Fernandez-Young et al. found 85 CSR consultancies operating in the UK on the basis of a Google search. A very small number had been operating for more than two decades and these tended to have either a broader consultancy portfolio or were originally focused on environmental issues. There was a burst of new consultancies between 1982 and 1991 when 19 were formed, and another burst between 1993 and 2002 in which over 40 were formed. In 2007 our internet search found that there were 96 CSR consultancies in the UK, showing a 13% increase over four years. This indicates that the industry is showing rapid growth and suggests an increasing demand for CSR consultancies.

A limitation of this finding is that it does not reflect the value of the CSR consultancy industry and whether this has increased at the same rate as the number of companies within the industry. Even if we had information on consultancy turnover, this would not help as some of the consultants are also performing non-CSR services to companies. Some consultancies indicate the number of their members, clients or contacts which collectively run into the thousands. It was noted that, when consultants name particular clients, the same large and well-known companies feature in numerous consultants’ lists. Fernandez Young et al. (2003) did find some concentration in the industry such that about 49% of the employees were employed in the five largest consulting organisations.

By speaking to respondents it was possible to gain their opinion on the growth of the CSR consultancy industry. The general consensus was that there were more companies engaging in CSR and so there is more work available. This is shown clearly by a respondent from the accounting and consulting industry who stated simply that, ‘it’s growing because there is an increasing demand to do this kind of stuff’. The opinions provided by respondents suggest that the growth in the number of consultancies is due to an increase in demand as opposed to existing consultancies breaking up into smaller niche consultancies. This would therefore suggest that we could expect the value of the CSR consulting industry to be growing along with the number of companies within it.

The scope of the industry

In order to provide an understanding of the current scope of the CSR consultancy industry the...