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Where Ideas Launch - Interview with Heather Burns, growing a successful ESg Consultancy

070 Growing a Successful ESG Consulting Practice

Introduction

Heather Burns is an independent ESG and sustainability consultant who for the past 15 years has helped global companies and NGOs find ways to improve and report on their social, environmental, and corporate governance performance. She has also helped to develop global ESG certifications and standards, and is the founder of a nonprofit business association focused on scaling business solutions to climate change. Her work in sustainable development (an initiative called Haiti Onward) was recognized as a semi-finalist in the 2011 Buckminster Fuller Challenge.  

 Her interest in sustainability was sparked in 1998 while traveling and working as a Divemaster on a small island in Thailand, where the waters she dived every day were in rapid decline due to two local economies (tourism and fishing) battling over the same fragile ecosystem. Working with local residents, dive shop owners, and local fishermen, she and other divers formed an island conservation organization still in operation today.

 Her latest adventure involves teaching consultants of all types how to start and grow a successful ESG Consulting practice. www.esgconsultingbiz.com

 

Shownotes

Heather, welcome to Where Ideas Launch!

 

Heather Burns  1:29  

Thank you, Katherine. I’m so happy to be here. I love your podcast.

 

Katherine Ann Byam  1:33  

Thank you so much for joining us and for shedding some light on this whole idea of ESG. And I think that’s going to be my first question to you, actually. I talk about it at times, but I think that not everyone understands what ESG is. Why don’t you share with us what exactly this means and where came from?

 

Heather Burns  1:51  

Yeah, so I think I love a good definition. And it’s really important, particularly in sustainability, because there are so many of them flying around. So ESG is the practice of measuring, monitoring and reporting on environmental, social and governance performance. So the environment can include operational impacts, like wastewater energy, or those related to climate change, such as carbon emissions. And then social impacts can include how a company treats its employees, how it engages with the communities in which it operates and whether or not it prioritises diversity, equity and inclusion. And then governance addresses decision making and transparency and the distribution of rights and responsibilities. But it’s important to keep in mind that the goal of ESG is actually sustainability, which is defined as our ability to meet the demands of the present without jeopardising the ability of future generations to meet their needs.

 

Katherine Ann Byam  2:52  

How do you think we’re doing?

 

Heather Burns  2:55  

Well, we could always be doing better. You know, I definitely think we could be doing better. But I think that and as I’ll get into a little bit later, it really has reached the tipping point that many of us have been hoping for for the last decade, and has hit the mainstream. So I think we’re on a good trajectory.

 

Katherine Ann Byam  3:15  

That’s a good answer. I want to get back a bit and talk about how you came to this in the first place. Because when I meet consultants now in the space; Environmental Consultants who’ve been around, or that’s what it was called in the old days, environmental consultancy. How did you come to this? And where did you come from to bring those skills to this space?

 

Heather Burns  3:35  

Have you ever watched a movie that changed your life? Yeah, right? And so that’s happened to me twice. And the first time and both are related. The first time was back in the late 90s. And I was feeling a little bit lost, you know, all my friends are settling down, getting married, doing that whole, you know, kid thing. And I was like, still trying to figure out what I’m supposed to be doing. And I remember watching Seven Years in Tibet, and I was just so enthralled by the idea of getting out of the United States, and seeing the world. So I sold or gave away all my stuff. I bought a one way ticket and I spent the next three years living and working in Asia. And while I was there, I lived on this tiny island in Thailand called Koh Tao and I became a scuba dive master and I was diving the same waters every day for hundreds of dives. And I really witnessed human impacts causing the coral reef to die. And when I stopped to think about it, I realised that it was because commercial fishing and tourism, you know, two main economies of this community were at odds over the same ecosystem, and that really sort of planted a seed. So fast forward. 

 

A handful of years later, I’m back in the United States, and I’m doing that whole thing of getting married and having kids and I sit down to watch Al Gore’s An Inconvenient Truth which is a doctor’s memory about climate change, as you probably know. And what I learned watching that movie really became the sort of before and after period in my life, right? It was like before I knew about climate change, and after I learned about climate change, and let me tell you, it’s not an easy movie to watch. And I almost turned it off. But there’s this part, you know, where he looks at the audience, you know, and he’s looking you dead in the eye. And he’s like, before you jump from denial to despair, like, stop in the middle and do something. And I was like, Okay, I’m going to figure this out. 

 

So at first, I thought about going to work for an NGO, like Greenpeace for Sierra Club, because they were doing really cool things. But that seed that has been planted back in Thailand, around economies, you know, really kind of needle me and it told me that working with business was one of the things that not a lot of people were doing at the time. And perhaps it was actually one thing that can have a great impact. You know, the problem was that the industry at that point was incredibly nascent. And everyone was like, still trying to figure out what sustainability and ESG actually even were. 

 

So I started with what I knew how to do, which was research and right. And so shortly after watching the movie, I created this blog called CT Green Scene, which was basically like a round up of all things green and environmental that were happening in my state, and I focused as much as I could on business and entrepreneurs. And, you know, I learned as much as I could from watching companies like Seventh generation and Patagonia and seeing what they were doing. And after a few months, I started hosting these networking events, which took off because we were, we ended up in the New York Times, somehow, I don’t know. I don’t know who called them, it was not me. But before I knew it, like companies were asking me to consult them back then it was called going green. So, you know, getting my first paying client, of course, is a bit more of a story. Because it’s always easy to do free work as a consultant. But eventually, I think, yeah, it was a colleague who told me about an association that her company or company was a member in, and they ended up hiring me to write a sustainability report. Well, of course, I had absolutely no idea what I was doing. And it was definitely like flying a plane by Well, you know, trying to build it. But they renewed for a second term of the contract. So I couldn’t have done such a bad job. And that was kind of how I got started.

 

Katherine Ann Byam  7:31  

That’s an incredible story. And I think that a lot of us think like this. So we have this, this moment where things become clearer, like my clarity moment was actually reading a book called Jugaad Innovation to get innovation stories of India and how they innovate solutions from cheap from from the natural environment to make things work, like building incubators for kids, or building fridges so that they can keep their food fresher for longer from clean water and stuff like this. And there’s always a moment when there’s cognition, you know, something sparks, something opens up. And then the next question is, how do you do something? It’s, it’s kind of like, you know, you listen to the knees and something happens, and you’re like, how do I get involved? How do I participate? How do I make an impact? And I think what’s great about your story is that you didn’t come from a traditional environmental background, if you want to talk a little bit about the kind of skills you brought to the table, and you started.

 

Heather Burns  8:29  

So at the time, I was working in the publishing industry, I was working as an editor and a freelance writer. So my skills were basically you know, revolved around research and interviewing questions, asking really good questions, thinking deeply about a topic and kind of being able to peel away the layers to get to what’s really going on behind that I think was sort of, and then being able to communicate in a compelling, you know, way that made people want to get involved. I think those were sort of the core skills that I started with. And I’d add to that of deep interest and passion for learning, and really just wanting to, you know, expand my skill set.

 

Katherine Ann Byam  9:17  

That’s really interesting. And I want to take us a little bit now to what are some of the shifts that you’ve seen happen in your tenure in this space? So you’ve kind of been doing this work now for more than 10 years? What sort of shifts have happened? And how do you sort of compare this to what’s happening right now? And what’s really made the big difference in your view?

 

Heather Burns  9:42  

Yeah, so I think there have been two significant shifts that have shaped the industry and created what is now this unprecedented demand for ESG and sustainability consulting services. And the first was the shift from thinking about everything In terms of green, right, which really means all things environmental, to the idea that people, planet and profit, which was referred to as the triple bottom line, are actually connected. And that really led to this idea that sustainability is the goal, and that you have to have those three pieces in order to achieve true sustainability and business. So that was the shift that was really the precursor to ESG. And to companies understanding, you know, this idea that triple bottom line meant that they could actually, you know, prosper as a company. So around that same time, seventh generation, which makes non toxic consumer products was acquired by Unilever for $700 million.

 

Heather Burns  10:53  

And that was like that made people kind of pause like, whoa, Unilever’s interested in a company like that, because until that point, those types of companies have really been in this very specialty type of market, right. And of course today, Unilever’s sustainable living brands has a 50% faster growth than the rest of their portfolio. So certainly proven now. 

 

But the second trend is more recent. And this is that critical move from, you know, the sidelines to mainstream. And people ask me all the time, you know, how do you know that this is shifted to the mainstream when so many companies are still oblivious, or in denial or whatever it is? And you know, how do we know that things won’t just go back to business as usual, when there’s a next change in government leadership or something. And I tell them that, you know, it’s because it’s at this point, it’s coming from all directions, and every stakeholder group, right? So it really started with this consumer demand, there was the emergence of what was called a low hos sector, which was lifestyles of health and sustainability. And these were folks that were, you know, vocal about the fact that they were willing to pay more for environmentally or sustainable products environmentally friendly. And today course that Mark is on track to hit 150 billion in the US alone, and 90% of millennials are willing to 90% of millennials are willing to pay more for products that are environmentally friendly, or sustainable. So those people actually happen to work, right, they have jobs, so their employees.

 

 So then you have this shift into the employee stakeholder group, where you’ve got 80% of millennials wanting to work for a company that’s strong on ESG. So companies obviously want top talent. And their top talent is telling them this is what we’re looking for. So they’re getting it now from employees, and then you layer on the supply chain. And you’ve got all these disruptions that are, you know, started off kind of in the fashion industry and saw a lot of terrible fires in Bangladesh, and people died. And, you know, this led to really like, you know, this outcry around the supply chain, right. And now you’ve got COVID and a pandemic, which just elevated everything and really put a microscope on and the fact that our supply chains are completely broken. 

 

So all of this uncertainty is really seen as risk, particularly when you’re looking at it from the perspective of investors. So, you know, last but certainly not least, are a stakeholder group of investors. Right? And so, last year, in his annual letter to CEOs, Larry Fink, who’s the CEO of Blackrock, which is an investment firm with over $9 trillion of assets under their management, proclaimed CEOs, right, that climate risk is investment risk, and that companies need to get serious about it. Well, everyone thought, well, that’s really interesting, right? Well, and then the pandemic hit, and they thought, ah, that is just, you know, that will kind of fizzle. Well, instead, it didn’t fizzle. In fact, it took hold. And then in his next year, which was this year, a letter to CEOs, not only did he reiterate that, but he basically said that companies that are not Net Zero, by 2050, are going to be, you know, ops become obsolete. So this is really now sending complete shockwaves through the global markets. And not to mention, it’s led to companies like Amazon and Unilever and Microsoft are now making these netzero claims. And they can’t get there without their suppliers because 80% of a company’s greenhouse gas emissions is actually embedded in their supply chain. So now you’ve finally got this pressure that’s being put on more of the midsize companies and so that’s why I say it’s here to stay

 

Katherine Ann Byam  15:00  

Yeah, no, I totally hear you with that. And I want to slightly shift and challenge you a little bit. And it is, is ESG the same as CSR? And therefore, is it just another form of greenwashing. Now, I think I understand a bit more about it than that. But for my listeners, they want you to debunk this idea that the ESG sort of framework is not just another effort of companies to cleanse their past?

 

Heather Burns  15:31  

It’s a fantastic question. And, you know, I’d say that the answer is quite complicated, really. And there are certainly experts out there who I respect, and who are actually very vocal right now and criticising ESG. And they’re not wrong. But my pushback really is always that we need to do what we can when we can. And, you know, I will directly address that in just a minute. But I think, you know, everything about this industry is evolving. And we really need to evolve very, very quickly. And we need to keep that in mind. Companies are not designed to be able to evolve quickly. They’re designed to get really good at their core deliverables and what they do and what they provide, right. And so, change is difficult, even on the individual level, you try to take that to the whole corporate culture level, and you’re talking about it, it’s going to take some time. 

 

So that’s certainly not an excuse, by any stretch of the imagination for companies to take advantage of that. And I think what I really do like about ESG, is that it is, you know, what is measured gets managed, and along with ESG, is this component of reporting, and becoming very transparent, and publicly open about whatever your environmental, social and governance performance is. And then setting goals that you’re comfortable with. And this is usually where the most criticism comes in is, you know, companies are setting goals that they’re comfortable with. They’re not necessarily setting goals that place planetary benefit at the core of that goal, or even what’s called, you know, planetary context. So for example, you know, if a company makes a commitment to reduce its water usage by 10%, over the course of whatever, that could sound like a great or 20, even 20, or 50%, whatever that number is, because it sounds like an amazing number. 

 

But then if you really look at that particular company, you have to look at what watershed is it actually in? And what does that watershed require? Not the company what, but what does that actual watershed require to become more sustainable? So there’s certainly some weak spots. And then as far as greenwashing goes, I mean, it’s always a risk, and it and it will continue to be a risk. But I think that this idea that transparency, and supporting and backing up with data is becoming much, much more than expected, right, it’s expected from investors. I mean, you can’t really pull the wool over an investor size. I mean, if you do, there’s serious consequences to that, you know, you’re gonna be held to a much higher level of accountability around investors than you are consumers, unfortunately. But that’s kind of just the truth. So I think that this idea that this newest kind of wave of investor involvement is, is critical to stem the spread of greenwashing.

 

Katherine Ann Byam  18:51  

Yeah, I, I really get this. And I think there’s a lot of pushback also on how companies are solving the problems. So things like, you know, should we be doing offsets? Or should we be really innovating from within? Should we really be getting all the things out? And I think you’ve kind of answered that already, in terms of how difficult it is to make change happen. And we actually need the companies that are dedicated to the offsetting to kind of get something for their effort, right. So companies that are trying to build solutions that are specific to that, you know, you kind of want to support those even if they are interim solutions, but we need every solution. Right. But I don’t know if you have a different thought than that.

 

Heather Burns  19:32  

No, I agree with that. 100%. We need our solution. And new solutions will also come online, right? I mean, we’re not thank goodness, we’re not operating in a bubble. And now the companies see a very strong business case for incorporating these things. I think that’s going to lead to more R & D than it already is. It’s leading to more R & D, more investments and more innovation, innovative solutions for the marketplace. So we’ll continue to see more of those as we go along.

 

Katherine Ann Byam  20:07  

That’s interesting. I want to tap into that, because what do you anticipate as the sort of future of the next five years of this ESG framework, etc. Because, for me, what I’d probably like to see is that it really becomes more integrated and embedded in everything in all the reporting that we do in everything that comes out of a company. But what are your thoughts on where you see this going in the next five years? Well, it’s

 

Heather Burns  20:32  

definitely going to become more integrated. And I think that certainly has pros and cons to it. And the way that we get there is a little bit concerning because there’s not a lot of standardisation, particularly when you’re talking about, you know, consulting, and providing advice in this space. And in some ways, that’s a good thing. Because I truly believe that there’s a place for every single consultant who wants to get involved in this can have a positive impact doing so. But at the same time, there’s very little, you know, academic programmes that are sort of all over the map, in terms of what they cover. Most of them are highly theoretical and methodology based or not practice based. So it’s really a nascent industry sector that needs more. Yeah, more, you know, consistency across the board. But sort of from an industry wide perspective, I think one of the things that I see that’s kind of exciting, actually, on the horizon is this idea of carbon pricing. And, you know, there are lots of different models out there and each other has pros and cons for sure, as far as climate change goes, but putting a price on carbon will really help us to realise the true cost of our emissions. And so for too long, you know, companies have externalised environmental costs, and basically borrowed from our future and future generations, to keep prices as low as possible for Chris consumers, you know, and we, as consumers have benefitted from that, so there’s sort of no innocent bystanders here. But what’s interesting is that many companies actually see carbon pricing as a necessary shift that they need to make to get to a carbon neutral economy. And many of them are already using an internal price on carbon to make really important business decisions. So yeah, I think, I think that’s really exciting in terms of like, getting everyone on the same page, and starting to really understand the cost of the things that we use,

 

Katherine Ann Byam  23:03  

So true. And I also think that, you know, it’s like your analogy about borrowing from the future, like, one of my guests once said, and I always remember it, that we have that we have this inheritance, right? It’s like your great grandfather’s left your big, big inheritance, and we decided to do it on the first party, right? Instead of sort of leaving it for What’s tomorrow. And, and essentially, that’s, that’s where we’re at in it’s like, you know, what we see going on with Russia and Ukraine and all the situations that we have going on in the world at the moment, a lot of it is a land grab for resources, right? That’s a land grab for things that are scarce. And I can’t see that changing until we change until we start thinking about things differently. So it seems, and I don’t want to see anything as inevitable because that’s scary language. But if we don’t, if we don’t embrace this, we will have other consequences that we will need to embrace. So we need to, I really think we should choose the lesser of the evils. I don’t know if it’s,

 

Heather Burns  24:10  

yeah, I mean, Change is inevitable, and adaptation is necessary at this point, you know, and, and the science is evolving, right. So as we learn more about the impacts and the CO impacts, and the long tail impacts, you know, I mean, the things that we’re missing today are not what we’re experiencing today, right? It’s what our kids will experience. So it’s, this is a long game. And I think that’s another sort of mindset shift that’s necessary if we’re so instant gratification, you know, programmed and we’ve really have to start to think more in seven generations, right? Like think about those seven generations. Yeah, I think that’s an important mindset shift to have for sure.

 

Katherine Ann Byam  25:05  

I want to ask a few questions now for the people who are listening to this who may be interested in dipping into consulting in this space. And I know that many of my younger listeners, people in that sort of millennials, slash Gen Gen Z categories, are really thinking about what they can do to make an impact, and what advice would you give them?

 

Heather Burns  25:28  

Well, it’s a super exciting time. And I said it before, but I’m gonna say it again, I honestly believe that there’s a place for everyone. And it really is a blue ocean opportunity for consultants who want to help or people who want to help companies prepare for what’s ahead and become a part of the solution. So I certainly think that that’s, you know, the time is now if you’ve been thinking about it, like, dive in. Because when you think about it, and everything we’ve talked about today, right, there’s just enormous, the floodgates have opened. And I actually have friends who own a company that helps pair companies looking for consultants and ESG consultants, and there’s just such overwhelming demand, even the consultants, these firms that are out there that are doing this kind of work, they don’t have enough people. So there’s just this unprecedented demand. 

And I think that’s first, the second thing is that there really is this myth, and it’s starting to weaken, but it’s still really very much there. And that is that, you know, you have to be science oriented or tech, not, you know, very technical in your expertise. But that’s really not true. I mean, like you said earlier, I did not come from, you know, in a traditional environmental background, many of us don’t. And in fact, companies certainly are utilising, you know, subject matter experts and technical experts for their, you know, their footprinting, or their life cycle analysis. But they also really need more of the overarching consultants who can help them navigate all of this change that’s required to embed a strategy, you know, create a strategy and embed it, and then communicate it. And so you know, as for more specific skills, and experience, I think there’s probably like three things to keep in mind. 

 

The first is that surveys have shown that the most sought after criteria that companies are looking for when they’re hiring people, is that they have industry specific experience. So if you can find a way to start, within an industry that you already have experience in, you’re definitely going to have a leg up. 

 

The second is that strong communication skills are very important, right. So the ability to make a compelling case for change. Whether that’s through written internal kind of communications, or external branding, kind of communications, or verbal presentations, its communications is definitely something that everyone involved in ESG. And sustainability really needs to be good at. Because you’re trying to get a lot of different people onto the same page and rowing in the same direction. So I’d also say, really close to that is that there’s relationship building. And, you know, companies are really often very nervous about like, you know, pulling back the curtain, and, you know, they fear judgement. And let’s face it, no company is doing everything. 100%, right. And lots of them have been contributors to the problem. But it’s a learning curve. And so the ability to create trust and relationships and rapport with companies, I think is really important. 

 

And then third is kind of like a bonus, I’d call it and it’s maybe a bit more of like a superpower. But it can certainly be learned. And that is whole system’s thinking. So I really like the ability to draw connections to sustainability from all sorts of angles. And this helps you not only come up with innovative solutions for your clients, but it also makes it easier to see, kind of down the road, what’s coming next in the industry. And that is something that companies will definitely like to pay a premium for.

 

Katherine Ann Byam  29:49  

That’s really great and a slightly different tack on this question. And it’s something that I’ve been kind of receiving and I want to validate if it’s actually true, but I think this is probably The first corporate role maybe other than HR, that could be female? What are your thoughts on that?

 

Heather Burns  30:06  

Well, I think certainly there is a shift. However, you know, if you’re looking at business and industry, I mean, it’s predominantly male. Right? So I mean, we have that. But I think as far as the potential, it’s, it’s certainly there. And I would, I would definitely say that it’s gotten better or a little bit easier to be female led, because, you know, in the early days, the denial was just so like, in your face, and I mean, I’ve had men really kind of get in my face about it, you know, back in the 2000 10s, kind of, you know, looking at me and like, Yeah, this is never going to be a thing. Like, we, you know, what are you even doing? This is just not even gonna be a thing. And it is a thing, to those of you who said that, to me, it is a thing. So, yeah, I do, I do think and I think women are also very well positioned in terms of like, they’re typically good communicators. Right. So I think there’s some, definitely some alignment there

 

Katherine Ann Byam  31:19  

any closing remarks that you want to share with my listeners, and maybe how they can connect with your work?

 

Heather Burns  31:26  

Well, I’d say there’s two ways. First, is through a digital course that I developed called ESG, consulting foundations, and that teaches how to build a successful ESG and sustainability consulting practice. What makes it different is really, you know, we go well beyond theory into the practice of being an ESG, and sustainability consultant. And, you know, how do you find your first clients? How do you make a strong business case? And how do you build credibility quickly, things like that. And second, I don’t even know if you know this yet, but you have inspired me to start a podcast. So it’s called consulting 9.0. And we look at what it’s like to build a successful consulting practice on a warming planet. Season One is going to be interviews with seven pioneers of sustainability business. I think six of those seven are actually meant. So there’s some equity work necessary there. But the 9.0 really is a play off of the nine planetary boundaries that are required for humans to be supported on the planet. I love

 

Katherine Ann Byam  32:41  

This is because I love that word. You recommended it to me actually, you recommended that I read donut economics and, and get into that space and and I really like how she has sort of centred this idea that we need to live in balance with these nine boundaries. But we also need to make sure no one falls through the hole. And when we say no one, it’s like, it’s biodiversity, right? Life itself doesn’t fall through that hole. So I really love that you’ve embraced that in your work. And I’m really looking forward to when you bring that podcast out. Thank you. So Heather, it’s been really a pleasure to have you ever learn so much in the session, and I’m sure many listeners have to thank you so much for joining the show.