Sustainability
Consultancy

Robert Rubinstein ... Sustainable Investment has no value ... consulting is mainly about giving free advice

Burgess COMMENTARY
DeletePeter Burgess Peter Burgess YOU

My own view of this issue is fairly predictable. As Peter Drucker famously said ... 'You manage what you measure', and up to now the metrics about sustainability are quite feeble.

When there are widely accepted metrics about progress and performance in the sustainability arena, then it will become much easier to justify and pay (or get paid) consulting fees. Until such measures are in play, it is merely one talking point versus another talking point ...

I am not much of enthusiast for efforts to link sustainability to ESG and then to stock market performance. Economic activity should be more than that. Specifically economic activity is about making a positive contribution to people and their quality of life, to the broader society, to investors for the risk that have made and to the environment in terms of making sure that the future of humanity is assured. We only have easy to use metrics (money / profit) for the investor piece of this and no easy to use metrics for all the other things.

My work towards multi dimension impact accounting is a step in the right direction ... though as far as I am concerned only a first step and rather a small one at that. Peter Burgess TrueValueMetrics.org
Peter Burgess

Sustainable Investment has no value

Since the financial crisis, it seems that no one wants to compensate anyone for services provided. TBLI is inundated with requests for introductions to investors, advice on ESG and Impact Investing, requests for management briefings, strategic partners, job openings, etc. It has reached epic proportions and it is not limited to us. Nearly everyone I speak to confirms they experience the same epidemic of requests for free advice or payment for success.

Why does it seem that anything related to sustainability is not valued and should be given away for free. Other traditional advisors (lawyers, accountants, strategy consultants) are compensated. Do people believe that sustainable investment (ESG and Impact) doesn’t offer any value, so doesn’t need to be compensated? There doesn’t seem to be any difference between asset owners (family offices, HNW, pension funds), asset managers, social entrepreneurs, etc. All ask the same? “Let’s meet to share experiences”. ” Do you have time for coffee so I can pick your brain?” “I would like to talk to you about a great investment opportunity and would like to access your network and knowledge”.

Some of the Strategy Consultants are a bit more subtle by reaching out at a cocktail party or through an introduction. Then the seduction starts with the ultimate goal of sucking power point slides out of your brain to cut and paste later and sell to clients.

Recently I was approached by a large company asking for help meeting Impact Investors for a large water investment in Europe. I said we could help and would know who they should meet and asked for our time and knowledge to be compensated. They said “We don’t do that. We would be willing to compensate should something happen.” I told him “if you have a backache and you go to a massage therapist, do you say, if my back pain doesn’t come back in 6 months I will pay you.” He laughed and got the message. Still wouldn’t compensate but he got the message.

Sustainable Investment advice has value and needs to be compensated, particularly if you want someone to commit their time and energy.

Time is the most valuable thing a man can spend.

Theophrastus If you want to access TBLI’s network and knowledge come to TBLI CONFERENCE NORDIC, Copenhagen, June 15-16. 6 posts

Joe Zammit-Lucia Joe Zammit-Lucia 2nd Entrepreneur, Investor, Leadership Advisor

Interesting post. I would point out a couple of things. First, regarding the backache example, maybe we would all be better off if we did pay for outcomes rather than services that may or may not be useful. As regards advice in impact investing, the perception out there is that Impact investing = lower returns. Many are therefore not willing to spend money for advice on how to make less money, particularly since most only want to understand what's out there and will probably not invest anyway because of the lower returns. This is unlikely to change until impact/sustainable investment can be shown to provide equal or higher returns. Finally, I would say that in any kind of advisory business one has to provide some value up front before people will hire you and pay for your services. This is normal. I don't know of any advisory business where the advisor got paid on the first meeting - except for those who have built a super-star name. LikeReply1 day ago

Laura Berry Laura Berry 1st Executive Director of the Interfaith Center on Corporate Responsibility

Robert, I can relate to your post so vividly, our challenges are similar both through the expertise and contacts we've developed through the years and through the impact of the organizations (tbli and iccr) we lead. we've learned at Iccr that to properly staff, document, analyze and report on any new issue; we must raise $200,000/yr to do it right. I fear the business community assumes that the good we do in our work is sufficient reward. The satisfaction is important but not sufficient. LikeReply1 day ago

Ahmad Al-Ashkar Ahmad Al-Ashkar 2nd Social Venture Executive

How ironic. LikeReply3 days ago

Angela de Santiago Angela de Santiago 2nd Social media entrepreneur

It is somehow similar for us, a social innovation media, when we are 'interviewed' by impact investors, NGOs, entreprises or corporate foundations about proven concepts, trends, thoughtleaders and possibly how they should plan their communication strategy...Selling time and brains is a challenge for a media, people are used to buy space or page views... LikeReply3 days ago

Florence Navarro Florence Navarro 2nd Chief Empowerement Officer at Empowered Women International

Marianne, Thank you for pointing out this piece! This analogy was completely on point: ' I told him “if you have a backache and you go to a massage therapist, do you say, if my back pain doesn’t come back in 6 months I will pay you.”' This being said I agree with Monica. Basically we are in a world where fremium is used extensively. We have to a balance between providing potential clients a taste of our services, and constantly being required to give advice and connections for free. LikeReply3 days ago

Antoine Mach Antoine Mach 2nd Managing Partner, Covalence EthicalQuote

Excellent. By the way, Robert, there’s a project I would like to discuss with you, it will be a great partnership with win-win synergies :) LikeReply3 days ago

Monica Perez Nevarez Monica Perez Nevarez 2nd Sustainability Consultant at Culebra Elders Community

Robert, I too was taken aback by the many time-consuming communications with people about sustainability, and like you, did not react well at first. But then I realized that networking and 'picking your brain' was just a new way of doing business, and that I had to adjust to how things were being done now. So, for example, having a website or blog that explains not only what you do, but the many ways sustainability is needed and can be deployed, is a must. This way you can always direct traffic to read it, to answer FAQ. If potential clients need more, you can offer a free half hour consultation, and then charge them your usual hourly fee after that (but you let them know up front). The other thing that happened was that I realized that explaining something is not the same as carrying it out. Many people will understand what needs to be done in their organization, but most will find that they don't have the time to do it themselves, and if while you speak to them you convince them of the importance of what they need to do, they will end up realizing they need to hire someone to do it (because it takes time and expertise he does not have), and they will know you are an expert at it. What I am trying to say is that the business world has been shaken up by technology, digital communications, the economy, and the younger generation, all of which demand we adapt to the new way of doing things. I hope you found my comments useful. Like(1)Reply3 days ago Rick Mueller

Rick Mueller Rick Mueller 2nd Professor/Author | Innovation Practitioner/Protagonist

Robert, two points, harsh I expect, but meant to help - and freely at that because I enjoy doing it.. (1) Just because opportunity doesn't come in the particular form you're used to seeing it doesn't mean it doesn't exist or lacks value. A corollary to this is that if what you have to offer can be fully expressed in Powerpoint, then you have very little to offer. (2) Just because payment doesn't come in the form of cash, doesn't mean you can't be getting paid. I personally get a great deal of understanding I turn into components of saleable content with every conversation in which I engage, including this one. Honestly hope this helps. Take care and Good Luck. LikeReply3 days ago

Richard J. Marks Richard J. Marks 2nd Social Impact Business and Media Arts

Have you set a fiat hourly consulting fee? It would be good to know what you would charge for upfront, no strings advisory. That would help others immensely. Eg. $500 an hour and 10 hour minimum? Get your experience referrals to pay a fair fee, too. It would be good to hear what you think. Structuring a deal is different than bread and butter R&D for so many people seeking access. LikeReply3 days ago

Jim Bowes Jim Bowes 2nd Founder of Natural Media Experts

I hear your frustration. The sustainable community is a strange fish. Why do those deeply involve tend to go after companies making first steps. Cries of greenwashing for not understanding or doing enough while companies and even entire industries doing nothing, stay under the radar? Sustainability is not just good deeds. It also meeds to be good business LikeReply4 days ago

Stuart Williams Stuart Williams 1st Profit = A Focus On Planet & People ~ Stuart Williams

It's hard to charge for something that has most always been free. From the late 80's through the 90's and into the early 2000's many 'experts' were giving sustainability related advice for free. In fact many of the pioneers of the genre made no money from their incredible efforts. In great part this was a necessity in order to get people to engage with then embrace the thesis. Today, there is certainly some roll over from that. However, today we are also dealing with the phenomenon of greed embedding itself in the genre. Capitalism hates high returns and moves to kill them, this includes the generation of fees. With the rise in popularity (much in part due to your work Robert and that of others) people are mistakenly treating 'Impact Investing' as an asset class and hence many overnight 'experts' have been created chasing fees. Finally the word sustainability has been used so pervasively and so out of context that it has lost virtually all of its value. In summrary 'Impact Investing' is on course to implode within 3-4 years so the best way for you to get paid is to take your clients beyond sustainability and beyond impact investing to the core of the issue - how do you generate the futures highest and most sustainable profits/returns not at the expense of people or the environment. But that's not all as in doing do it is vital to walk the walk by creating new paradigms in trust, creating appropriate products and services, transparency and accountability. If you want to get paid change the current paradigm. Best Stuart Like(1)Reply(1)4 days ago

Lonnie McRorey Bruce F. Harris Bruce F. Harris 2nd

Maximizing Resources, Impact and Mission using Expertise in Commercial Real Estate & Corporate Asset Debt & Equity Stuart, what do you mean by 'implode' and why? Is it just the term you are referring to? Like3 days ago

Laurie Lane-Zucker Laurie Lane-Zucker 1st Founder & CEO at Impact Entrepreneur & Impact Alchemist

A fine post, Robert. Sadly, quite true in my experience. Part of the issue, I think, is that there still isn't a great deal of liquidity in the impact investing space, despite all the positive momentum in terms of general awareness. There are certainly more window shoppers now than a few years ago, but many of them haven't yet stepped inside the store and bought something. A high percentage of entrepreneurs are either bootstrapping or working on very limited funds, so I have sympathy for their help now, pay later requests. I have somewhat less for those on the investor side. Many investors are very happy to have experienced eyes refer interesting deals to them, but they are usually unwilling to pay up front for the valuable assistance (which involves no little expertise, a substantial network and great deal of time in due diligence) offered. For example, I have spoken to family wealth offices whose clients are asking to do more impact investing but they feel unequipped to find and screen authentic, blended value deals. They see the need for third party help, but are yet not ready to pay for such expertise up front. There clearly needs to be a culture change around how impact advisors are valued and paid. I am glad you spoke out. Like(1)Reply4 days ago

Linda S Warner, CSM, PMP Linda S Warner, CSM, PMP Linda S Warner, CSM, PMP 2nd Sr Project Manager, Scrum Master, Product Manager

There are few people on this planet that have the breadth and depth of expertise and contacts that you do Robert. Would people prefer to spend years and at great expense through trial-and-error or fast path their process by paying you for access to the best? These same companies hire consultants for everything else, why should this be any different? It makes zero business sense. A big 'yes' to attending any one of your conferences. I and others have experienced firsthand the magic that happens at these events. Yet I give an even bigger 'yes' to paying for your services directly. Companies need to wake up to realize that this is the window of opportunity to realize their projects and have a huge impact on the planet as well. By failing to respect (with their euros) those who have many, many years in this space is short sighted at best. LikeReply4 days ago