One of the big issues when businesses are currently using the services of consulting firms is sustainable business. The focus is on a whole series of central questions: What is the starting position? What are the existing policies and principles and which ones can I implement? How fast is he going? And then how do you check compliance? “Quick action is required,” according to a study by Munich consulting firm Roland Berger. Because the pressure on businesses is increasing. Consumers, investors and lawmakers have pushed for climate-friendly solutions. Protecting the environment is not only on the agenda, but can also provide a clear competitive advantage, according to the consultants’ analysis.
“There is no turning back. In the end, whoever adapts to the new world the fastest will win,” said Stefan Schaible, CEO of Roland Berger. Europe and Germany should move on to a sustainable economy as quickly as possible. “This is then”, he is convinced, “a great opportunity for German and European competitiveness”. Mechanical engineering, the energy industry or the automotive industry, for example, could thus retain their leadership role.
On the other hand, the risks are enormous if the pressure of change is ignored. Because then suddenly much more drastic measures would be possible, combined with a double risk for companies. On the one hand, access to insurance and finance could be restricted – for example by refusing banks to grant loans to businesses that do not operate sustainably. On the other hand, previous business models may no longer be viable, for example if customers no longer buy combustion-engine cars for the foreseeable future or if they avoid goods in plastic packaging. As a result, sales could contract, while higher costs for CO₂ emissions could weigh on margins: “So there is a double pressure on profits”, concludes the conclusion.
If, for example, the emission price of coal were to drop from the current 25 to 100 euros, which makes sense, up to 50% of corporate profits are at risk in many industries without countermeasures. There are therefore “serious risks on the margins”. Companies must therefore consider decarbonization, that is to say the switch from fossil fuels to climate-neutral production, not as a cost factor, but as an investment for the future. “Companies that act now can secure a clear lead in the newly understood competition”, thus the conclusion.
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Stefan Schaible is the head of the consultancy firm Roland Berger.
(Photo: Catherine Hess)
But rapid change is not easy. “Industrial sectors, which have high energy and transport costs, face a particularly significant challenge,” says Schaible. Heavy industry, like steel production, still has a long way to go. Thyssenkrupp’s large steel plants in Duisburg are now responsible for 2.5% of all CO₂ emissions in Germany. All these areas must offset or reduce particularly high CO₂ emissions. “Industries with an end-consumer business are under the greatest direct pressure,” Schaible continued. Because more and more consumers are asking for environmentally friendly and sustainable products. More and more people are willing to accept an additional price for green products or pay a premium to offset emissions. Investors, both private and institutional, want sustainable investment opportunities and assume that socially responsible and sustainable businesses will outperform the competition.
Many companies have understood this. “The pressure from the company itself for more sustainability and rapid change is surprisingly high, higher than I expected,” says Schaible. The pandemic is also functioning as a “development turbo”. Because suddenly it is clear just how fast and drastic changes are possible. Political pressure will increase, as the European Commission has just shown with its “Fit for 55” program. As a result, emissions of harmful greenhouse gases in the EU are to be reduced by 55% by 2030 compared to 1990, among other things, only zero-emission cars are to be allowed from 2035, an end of facto for conventional training. Schaible stresses: “It is important that fair, but reliable incentives are in place and, most importantly, that bureaucratic obstacles are quickly dismantled. And he adds: “We need radical changes.
The public sector is far too slow, and it could be a model
Schaible sees a particular deficit in state administration, as there is “a lot of catching up to do” in the public sector in Germany. “The speed of transformation of public administration must be massively increased,” says Schaible. Roland Berger is particularly active in consulting there. It is estimated that four percent of CO₂ emissions in Germany could be saved if the public sector quickly implemented measures where it could influence it, according to Schaible. But so far it has often not even been analyzed precisely what CO₂ emissions occur in the public sector. “It would be a good thing for the public sector in particular to take a leading role in the area of sustainability”, warns Schaible.
In any case, the consultants themselves want to lead by example. Roland Berger’s goal is to achieve net zero emissions by 2028, that is, to remove more carbon dioxide from the atmosphere than it emits. The company car directive has already been revised, the purchase of renewable energy has been extended, video work has been promoted and travel activities reduced, and the train is preferred to the plane. There is a lot of applause, especially from younger colleagues, Schaible says, sometimes others have to be convinced.