If you ever needed convincing of the commercial significance of sustainability to advisory firms, Rob Doepel’s appointment as UK Managing Partner for Sustainability at EY’s UK firm is a case in point. Doepel was running the firm’s energy and resources business – itself a £0.5bn business in the UK and Ireland. A growing focus on energy transition and decarbonisation paved the way for his next move and a broader, sector-agnostic remit.
“We’ve got lots of different capability and lots of different teams working in this space but increasingly it’s starting to infiltrate every part of our business,” Doepel explains. The challenge is how you bring together all the skills, so we’re easy to work with from a client perspective. “I’m trying to knit together lots of different existing capabilities, as well as build some new ones.”
While sustainability is a catch-all phrase that disguises some significant geographic and sector-specific conundrums, the major challenge for EY’s UK clients is carbon reduction. Bearing in mind it’s probably easier to count those large organisations yet to make a net zero pledge than those that have, the pressing task at hand is how to turn the rhetoric into meaningful action.
“People have made a big, bold pledge so there’s an ambition, which is brilliant. They’ve got some projects that they are delivering – for example, decarbonising their fleet or doing some work on packaging. But if you’re looking at a comprehensive plan across the enterprise, lots of businesses are really struggling. It’s not a plan for 12/18 months to three years. This is a 2030, 2040, 2050 plan. That’s a different level of planning.”
Enter EY Carbon, which officially launched on Valentine’s Day this year backed by £100m of investment in the UK, tasked to help clients deliver on their decarbonisation promises and with ambitious plans to recruit more than 1,300 professionals over the next three years, headed up by Doepel.
Six months on from COP26, Doepel is also conscious that clients are impatient to demonstrate their green credentials, but striking a balance between the visible quick wins – the EV fleets and ‘green’ power purchase agreements – and the longer-term systemic changes needed to make a real difference is needed to avoid accusations of greenwashing.
“Some of this stuff is hard and takes a long time, Doepel warns. “If you’re going to decarbonise a value chain, you’ve got to go all the way back to the grassroots, all the raw materials or source materials, and rethink how that might work in a low-carbon environment. That involves collaborating with others who also use that value chain, typically, your competitors. Together, you have to agree that the process needs to change and that might result in higher cost.”
Making something less financially efficient, but more efficient from a broader stakeholder perspective, that’s the rub, Doepel says. In a commercial world obsessed with financial return, making decisions today that you’re unlikely to benefit from in your business lifetime marks a huge shift in management teams’ decision-making processes.
Doepel agrees that reconciling the demands of stakeholders with the desire to embrace net zero is tricky, but he is confident we are on course to make the shift from shareholder to stakeholder capitalism. “Society is demanding it, it is happening. But it's not happening fast enough,” he warns.
The long-anticipated emergence of sustainability standards will undoubtedly result in a ramping up of action at the coalface, and help to minimise selective reporting on sustainability for the purposes of a good story. “What gets measured gets done,” Doepel says. “The ISSB is working to get international standards in place. Without it, it’s really hard to measure performance consistently.
“I’m a realist; we’re not going to have everyone agree to one set, but some consolidation will be incredibly helpful. The standards will never be 100% perfect but a set of standards that you can report against is always going to trump subjectivity and opinion.”
Doepel accepts that the sticking point will be agreeing on a global baseline as the minimum supplemented by more stringent requirements at a jurisdictional level. Even now, he doesn’t think the baseline will be set high enough to save the planet. “All you can do is keep the pressure on. The more individual countries that ratchet up what’s in their control, then hopefully over time, globally, it all gets ratcheted up.”
In the meantime, Doepel has his work cut out trying to recruit the people he needs to beef up his existing 200-strong sustainability team, against a backdrop of frenetic recruitment across the sector and a growing need to factor sustainability into all aspects of EY’s service offerings.
“For example, when we’re doing transaction support from a due diligence perspective, it’s not just about financial diligence it’s also ESG diligence. Likewise, supply chain advisory is pretty much all morphing into a sustainable supply chain. And you can’t have a conversation about procurement without talking about ethical procurement. If you’re redesigning a finance function, we’ve now got to report on a whole new set of data that sits all over the organisation. And they haven’t got the processes, controls and systems in place, like we have for financial data.”
At the same time, there’s a huge commercial opportunity in the provision of services that help organisations communicate their sustainability messages authentically, not to mention internal change management programmes.
“If you implement sustainability programmes with a different set of measures, so it’s not about cost reduction or efficiency, but it might be around water use or carbon abatement, we need people who are great at orchestrating huge transformation programmes.” That has the advantage of allowing the firm to recruit people from a broad background. “If we were going to try and find 300 deep sustainability people in the UK, we’d be looking for a long time!”
Recruitment challenges aside, the huge amounts of R&D investment in sustainable projects and technologies gives Doepel cause for optimism for a green future. And the opportunities for accountants too are immense, he believes. “It’s a hugely exciting time for the accounting profession. Accountants could stay in that financial box but that would be a lost opportunity when they could redefine the industry to say this is what’s now important.”
COP26: acting together
Find inspiration, information and practical resources to support the goals of the UN Climate Change Conference in Glasgow and explore why it represents a critical time for the profession.
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