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Riding the Sustainability Wave

West Monroe

We partner with clients across all aspects of their business to progress toward new digital ways of working. #BeDigital

发布日期: 2023年7月17日

Reduce, reuse, and recycle first appeared in the 1970s—but there’s no doubt that the volume and magnitude of such efforts has reached an unprecedented level, with sustainability no longer just a consumer movement but an industry of its own. Seemingly every facet of life involves sustainability, from smart thermostats that adjust temperature when you leave your home to Amazon combining multiple orders into fewer boxes. Last year, Miriam-Webster added 370 words to its dictionary. Among them: microgrid, greenwash, and plant-based.

If sustainability is not a part of your business strategy in some way, you’re well behind the curve.

In our experience—with our clients, in our communities, and within West Monroe’s four walls—these are the areas we’re seeing it show up most prevalent right now:

1. Supply chains are being transformed.

The supply chain has taken center stage—meaning agility and resiliency from an operational standpoint amid a turbulent market now also means considering sustainability. As outlined in our 2023 Manufacturing Outlook , a focus on sustainability can yield reduced costs, goodwill among customers, and tangible value—but it also requires more data and supplier diversity. Take, for example, the sustainability roadmap we helped VSP Optics build that will cut emissions in half by 2030. It should be no surprise that we believe aligning digital efforts with these goals is one way to increase the likelihood of success—and utility supply chains are even getting in on the action .

2. The energy grid is also undergoing a transformation.

Clean energy and decarbonization have been top-of-mind for some time, but regulatory requirements are pushing that movement forward—quickly. The Infrastructure Investment and Jobs Act is expediting the utility of the future on multiple levels, including clean energy production, distribution, consumption, and accelerating grid modernization and adopting green technologies. As consumers and utilities move forward with cleaner energy, we’ve built tools like an EV Fleet Total Cost of Ownership to help utilities engage their customers on electric vehicle adoption.

Decarbonization, electrification, and decentralized power generation are also proliferating. Data accessibility is the newest hot topic in the push toward decarbonization, with states such as California and Texas already “unlocking” that access—and other states are well on their way.

3. M&A activity is increasing in this area—as is private equity investment.

It remains to be seen if the cleantech market will surpass the value of the oil market—as Business Insider wrote about earlier this year —but the 200 private equity and corporate development executives West Monroe surveyed in 2023 are already preparing for this new wave of investment. Case in point: 75% of dealmakers revealed an increased appetite for clean energy acquisitions, and 66% plan to make a cleantech deal in the next two years.

That annual M&A signature research also uncovered exactly where investors are focused and what the drivers and barriers to success are in the cleantech industry, with co-author and M&A expert Keith Campbell noting that “cleantech has emerged from a niche infrastructure fund to an area where many investors are evaluating the themes and opportunities across each of their industry vertical teams that will benefit from the growth, tax advantages, and clean energy tailwinds.”

That analysis meshes with the research we conducted in 2022 , when 63% of private equity respondents said they evaluate a target’s carbon footprint/standard during ESG diligence. Spurred by everything from government incentives to regulatory changes to maturing technologies, it’s an area where funds and investment have taken notice.

4. Companies have graduated sustainability “programs” to “lifestyles.”

West Monroe is helping our clients achieve the above goals—but we’re also walking the walk. Our 2022 Impact Report—publishing July 19—documents our own firmwide sustainability efforts. We were one of more than 300 signatories of The Climate Pledge , committing to reach net-zero carbon emissions by 2040 while also implementing a sustainability data management platform to measure our emissions. We achieved carbon neutrality for a second straight year and three of our offices—Chicago, New York City, and Minneapolis—received LEED Green Building certifications .

We also continued to engage our employees in office-led environmental initiatives—culminating in our annual firmwide Day of Service (taking place July 21 this year) where 1,800+ employees volunteer at more than 100 organizations. Theresa Miller , a manager in our Energy & Utilities practice, recently traveled to Nome, Alaska, as part of West Monroe’s Global Fischer Fellow program to help address and fix the water crisis in indigenous communities. Read about Theresa’s incredibly moving and impactful journey .

Sustainability is increasingly prevalent, encompassing all aspects of life and business: Utilities are focusing on decarbonization and decentralized power generation. Companies are infusing sustainability into their supply chains and other enterprise-level practices. And investment in cleantech is on the rise from private equity and ESG funds. West Monroe is aligning digital efforts with sustainability goals to help our clients in pursuing their initiatives—while also achieving our own goals to create a more sustainable future.

West Monroe's 2023 Manufacturing Outlook

West Monroe's 2023 Energy & Utilities Outlook

Client Story | VSP Optics’ sustainability roadmap cuts emissions in half by 2030

How digital and sustainability alignment can drive value for manufacturers , by Randal Kenworthy and Durgesh Patel