A new report fromPacesetter Research finds that professional service providers and their clients are facing growing pressure to implement ESG-related programs from legislators, investors, and the business ecosystem (e.g., media, consumers, stakeholders, customers). This pressure from stakeholders to hold businesses accountable is countered by vague standards and metrics, uncertain ROI, and the growing politicization of the ESG concept, putting organizations between a rock and a hard place. As a result, the service emphasis among innovators in professional services has moved from a compliance checklist approach to one that is proactive and strategic, elevating the importance of incorporating ESG principles into an active risk management strategy.This grounding of ESG in a business and risk management context has favored those service providers best able to align an effective, proactive ESG framework with the overall business strategy to deliver long-term value.  

In In this three-part Law.com Compass Pacesetter Research series on ESG, our first 2023-2024 report is on the “E”: Environmental. The Pacesetter Advisory Council assessed dozens of providers to arrive at twenty-four Innovators recognized for their ability to help clients navigate an increasingly complex market environment. The research and analysis also provide insights into the competitive dynamics and service delivery trends driving convergence across legal, management consulting, multi-service, environmental engineering, technology, and insurance providers.

Research Highlights

  • Despite the lack of a single, universal metric or standard for monitoring and managing ESG-related criteria, ESG has still managed to become a significant factor in capital allocation and M&A deals
  • While stakeholder activism and increasing regulations continue to be key drivers for ESG, as business leaders identify weaknesses in their supply chain and its impact on long-term sustainability, interest in ESG principles and frameworks is rapidly growing, increasing demand for more business operations-focused ESG solutions
  • ESG-related initiatives are often seen as a cost to an organization’s bottom line, and business leaders struggle with developing a business case that accounts for the financial ROI
  • Coupled with the lack of data, there is also the issue of poor uniform reporting standards and metrics, causing organizations and investors to each define and measure ESG-related issues differently and, as a result, report in different ways on these issues, hindering evidence for ROI
  • With the lack of cohesive and defined measurement criteria, successful solutions rely heavily on advanced data analytical tools, like AI, to help analyze KPIs related to ESG and to determine business impact
  • With a regulatory environment as of yet unsure how to approach ESG, many clients need help managing future risks, and Innovative professional service providers are helping clients “future-proof” bydeveloping 2-3-year roadmaps that consider regulatory and environmental changes

What Makes A Pacesetter & Innovator in ESG: Environmental?

While the ESG regulatory landscape continues to evolve, specifically among the environmental elements of ESG, it is dawning on clients that they will likely be held accountable by regulators, shareholders, and their own customers and employees in the future for how they approach ESG today. The service providers covered in this report stand out because they focus on risk mitigation and optimizing opportunities, helping clients build long-term value.  

The 2023 ESG: Environmental Innovators & Pacesetters

  • Allianz
  • Anthesis
  • Arup
  • AXA XL
  • Bain & Company
  • Beveridge & Diamond
  • BDO
  • Boston Consulting Group (BCG)
  • Capgemini
  • Clifford Chance
  • Deloitte
  • DLA Piper
  • EY
  • FTI Consulting
  • Gallagher
  • Garrigues
  • GEP
  • GHD
  • Korn Ferry
  • KPMG
  • Langan
  • McKinsey & Company
  • Paul Weiss
  • PwC

the methodology

The goal of Pacesetter Research is to help buyers of professional services navigate an increasingly complex landscape with confidence. We use a multidisciplinary perspective to identify best-in-class providers of legal, consulting, financial, insurance, employee benefits, and other professional services and analyze how they are evolving as an ecosystem of interdisciplinary service providers. Our research is grounded in over 50 years of accumulated market insights and qualitative research models that combine knowledge of management science with case studies and other sources of knowledge to understand patterns of market supply, demand, behavior, and ways of doing business. Our research also includes voices/perspectives from both the sellside and buyside, as well as knowledgeable people working in industry associations, academia, etc.

  • The Pacesetter Advisory Council (PAC) convenes in advance of the research project kick-off; members include ALM journalists and editors, and external experts such as consultants, general counsel, and industry thought leaders

  • The PAC selects the set of Innovators that will be covered in the research topic from a larger group of providers that members have identified in the normal course of their work

  • PAC members also provide expert knowledge and insights to the ALM Pacesetter team throughout the research and analysis process

  • The Pacesetter Team within conducts primary and secondary research

  • Primary research includes in-depth interviews with practice leaders at the provider firms covered in the research; satisfaction interviews with clients referred by those providers; and in-depth interviews with thought leaders, recruiting professionals, and other sources

  • Secondary research includes data gathered from annual reports and earnings calls, management presentations, public filings, case studies, press releases, journals and publications, online information databases and other publicly available resources

  • Innovators that achieve a Pacesetter Impact Score equal to or over 85 are designated as Pacesetters

  • Pacesetter analysts map markets and stakeholders and write market trends

  • Market segment overviews are peer reviewed by the appropriate PAC member

Service providers are evaluated and scored based on five core criteria

Business Model

Provider’s ability to reposition core competencies around new products, services, and business models to adapt to shifting patterns of market supply, demand, behavior, and ways of doing business.

Value Proposition

Provider’s ability to deliver on its value proposition, i.e., the positioning statement that communicates the benefits and economic value a prospect will receive by purchasing the provider’s products and services over a competitor’s.

Service Delivery

Provider’s ability to mobilize resources and configure assets to serve clients.

Client Impact

Provider’s ability to help clients affect continuous, sustainable change, mitigate risk, improve performance, and achieve growth.

Brand Eminence

Provider’s ability to leverage brand and marketing strategies to differentiate in its marketplace as an expert practitioner and thought leader.

About The Analyst

Ruth Sierra is an Analyst on the Pacesetter Research team at ALM. Prior to joining ALM Ruth worked in education and research. She served as an Elementary Educator and Team Chair Leader using creativity and collaboration to promote a growth mindset.She has over 10 years experience in research. She worked for a consulting company as a Senior Global Manager for the market research team.Her responsibilities included Project Management, specifically research design, implementation, analysis, and presentation to clients. She completed her graduate degrees from Hunter College and Hofstra University in NY.

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