Managing Client Expectations on ESG and Sustainability

Question

Sustainability is now a core part of Deloitte’s strategy. Describe a time you had to balance a client’s desire for cost-cutting with the need to maintain high environmental or social governance (ESG) standards. How did you influence their decision?

Accepted Answer

I worked with a manufacturing client who wanted to switch to a cheaper supplier to hit quarterly cost-reduction targets, but the new supplier had a poor track record for carbon emissions and labor practices. My task was to demonstrate that the short-term savings were outweighed by long-term risks. I utilized a 'Total Value' framework, similar to Deloitte’s Green Ledger approach, to model the potential impact on their brand equity and the likelihood of future carbon taxes. I showed that while they would save $500k in the first year, they risked a 10% drop in institutional investor confidence and potential regulatory penalties. I proposed a middle-ground solution: a different supplier that offered a 5% cost reduction but maintained strict ESG compliance. The client accepted the proposal. This situation taught me how to speak the language of 'Value' beyond just the balance sheet, ensuring that our clients are prepared for a future where sustainability is not optional but a core business requirement.

Managing Client Expectations on ESG and Sustainability

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