How Management Consultancies Data-Wash Climate Solutions

carbon capture, hydrogen, renewable natural gas. There's a whole host of these technologies and new products that are being sold to both US and European and Asian consumers as quote unquote green, when actually they come with ever more greenhouse gas emissions. We've already put one story out about a fossil fuel lobbying group that's trying to rebrand liquefied natural gas as a clean, low, or even zero carbon fuel.

Go check that out on our website. We'll have a corresponding podcast episode about the LNG boom in the next week or so. In the meantime, today we're talking about something that's really insidious and that it's kind of hard to cover because it gets into the weeds a little bit.

And that is the role that management consultancies play and all of this they have mostly been flying under the radar where disinformation and false solutions is concerned, but they play a really important role in shaping information and data and giving the industry sort of a credible bent to its proposed solutions. And they do that by providing data and a nonnalysis and technical reports to industry groups and companies.

The catch is that the data is highly limited by parameters at the companies and industry groups set, so while the consultancy is doing a rigorous analysis, it's also being asked to leave out some pretty key components of that analysis. This allows them to sort of hold up their hands and say, hey, we did the data and analysis they asked us for. You know, that's that's our contribution. We aren't the ones that are saying that that justifies this,

that and the other. But really that's kind of a cop out because of course these reports are then being used to lobby for particular policies or to convince people that, you know, energy transition is going to be too expensive, all those kinds of things. Un group called Reese to Zero is actually starting to look at these kinds of

things in a more serious way. So they are looking at professional services providers PSPs, and they're including management consultancies in that, as well as PR and advertising firms, which of course we've looked at a lot over here at Drilled. Several months ago, a former employee from a management consultancy reached out to me with some information about how that

firm was approaching its fossil fuel clients. This happens to be a firm that also does quite a bit of work for the US government on really robust climate analysis, and there's a reason that the industry also goes to them because they know that the government trusts their technical analysis. So again, it's just not as innocent as a lot of consultancies would like to make it out. As I asked reporter Matty Stone to look into those leads, and

she did and she found a lot. So she is here today to talk me through what she found and why it's important to look at these things. You can also find a written version of that story on our website at Drilled dot Media. After the break, Maddie Stone on management consultancies.

to government regulators and private industry clients. But one of their biggest practices is climate and energy, and so they have more than two thousand people employed across their climate practice, which does a lot of work with the US federal government as well as state governments and local governments around the country, including a lot of really legitimate and sort of respected work studying decarbonization pathways that cities, states and

governments can use, helping to implement energy efficiency programs for municipalities as well as utilities, and even helping to do the analysis underpinning some really high level and influential climate documents. ICF contractors have helped to author and coordinate several recent installments of the National Climate Assessment, which is this very authoritative federal government report that comes out every few years

on how climate change is impacting the US. So that is sort of the climate and energy work that ICF likes to present to the world. However, what my investigation found is that the firm is also hired by industry groups like the American Petroleum Institute and the American Gas Association.

These are fossil fuel lobby groups that want to maintain the fossil fuel centric status quo, and they hire this respected so called objective energy and climate consultancy to produce reports for them that they have a hand in shaping.

They can tell the consultancy, we want you to model this and that, and don't model this and that, and the end result is these very technical, official looking reports produced by this credible consultancy that the industry ultimately uses to promote itself and its positions, namely that we should continue using gas and other fossil fuels, and that decarbonization strategies should embrace the potential for things like fossil gas

and industry preferred solutions. And it's a really sort of tricky issue that you have this very highly regarded climate consultancy best known for work on decarbonization and actually tackling climate change, that has an albeit seemingly fairly small part of its business devoted to producing reports that are then used by fossil fuel industry interests, lobby groups.

The fossil fuel industry has responded with every single possible way to delay and distract action, and these types of technical analysis allow the fossil fuel industry to hold up the report in one hand and say no, look, we're working on it, we have answers while continuing to solidify policy outcomes that perpetuate investments in fossil fuel infrastructure today.

So those technical reports, they just by time, they are absolutely a greenwashing mechanism to say we're not ignoring the problem, we're not saying it's not here, we have a plan, and at the same time doing absolutely nothing to prove out whether that plan would ever be viable, would ever be in the public interest, and is even something they

would ever be actually working towards. The question becomes who is running those models, how are they being shaped, what are the questions being asked, and what are the assumptions being entered. Because it is absolutely the case that analyzes are only as good as the questions being asked and the assumptions being employed. Models can be so readily co opted to justify favored results. They can also be readily

deployed for rigorous, right extremely helpful, and insightful analyses. The difference comes in who is doing the work and who

is overseeing that selection process. And to me, that's one of the most insidious things about an organization that simultaneously use even the exact same model, but to use it for fossil fuel lotty groups on the one hand and state policy implementation on the other, because it muddies the water of what's real and what's not, what's rigorous and what's not because the model doesn't change the assumptions that are used due but suddenly write this organization that can

be seen as doing very rigorous work, puts its analytical stamp on a set of questions and a set of assumptions put forward by the fossil fuel lobby, and that is a fundamentally different outcome than something being informed through a rigorous public stakeholder process like one might see at the state level.

And so, for example, ICF provided the analysis. Is how they put it behind it twenty twenty one American Gas Association report looking at various decarbonization pathways that the gas industry could follow. And so this was a report specifically set up by the gas industry to demonstrate how it could zero out its carbon emissions. So the underlying assumption there that the client came to ICF with was we can be part of the climate solution and a big

part of the climate solution. And here are all these very technical, rigorous, you know, science backed data points showing how we can eliminate our carbon emissions.

industry wants to put in. For example, not saying this went into this specific case, but maybe a gas industry client would come to a consultancy with some numbers around the cost of electrification, right, And maybe those numbers are considered unrealistic today, but those are the numbers that the industry wanted to use to run its models. And then as a result you get a report that has some conclusions that appear to favor gas over electrification.

that supports all of our preferred policy positions. And that's only true on this very you know, surface level, where you're not considering all the ways that the industry might have informed or shaped or restricted how that analysis was done.

out that was called weaponizing Economics. I don't know if you if you read that paper, but he he talked to an economist who worked for a firm called Charles River Associates, and they were contracted by the API, like I want to say, in the nineties early nineties to run economic models that would show that the cost of acting on climate change was like just way too expensive and not realistic, and they left out the cost of

not acting on change. And so like Ben found this economist who'd been part of that work who said, you know, we did rigorous analysis of the stuff that we were like told to look at, but I regret that, you know, we went along with this thing of like not including this other scenario, which is clearly important for policymakers to understand, and that model got used for years to justify no, no, no, we shouldn't be doing anything. Look at how expensive it

is and all of that stuff. So, I know, ICF kind of came back to you and said, look, this is a very small part of our business. And that's quite a common response I think in these kinds of cases. But I know you also talk to some people who have seen this ICF report for the AGA, for example, or the API be cited kind of every time policy

debates come up about this. So yeah, I'd love to have you to kind of talk about that, like how much I guess, like how much this stuff gets leaned on in these policy conversations.

example of that. I spoke with some folks at the climate change think tank Influence Map who have been closely tracking the gas industri's influence in policy debates over things like building decarbonization and electrification and even gas stove debates in recent years, and they told me they've seen this AGA slash ICF report come up over and over again in formal comments submitted on rulemakings to various agencies, in letters to business leaders and politicians, and basically every context

you can imagine where the American Gas Association wants to point out to influential politicians or regulators or folks in the business world that hey, look, there's a way for the gas industry to be part of the future, even a decarbonized future, and we don't actually have to do all of this complicated and in their view, costly switching to electrification because we have this analysis showing all the

ways that we can decarbonize gas. So it's really become a powerful tool for them in helping to bolster their own credibility and influence and shape policy conversations. The really tricky part about that is how then do you quantify that impact?

millions of tons of carbon they're saving per year. But what is the climate impact associated with producing a report that an influential gas industry trade group can then use to block decarbonization policies.

of their revenue. But again, I think it's an open question as to what the overall climate impact of that work is, even if it's just a few reports every couple of years, If those reports can be used to delay or block important electrification measures in cities or states across the country. Like that could have a big ripple effect.

So this organization hired ICF to produce a report that looked at a very narrow technical question of what are effectively the emissions associated with producing a barrel of oil in the Gulf of Mexico. They also, i should add, looked at the United States as a whole, So they looked at you know, land based oil and gas production, and they also looked specifically at the Gulf. And then they created this huge database of data points for addressing

the same question elsewhere around the world. So what are the emissions associated with producing a barrel of oil in this part of the Middle East or you know, offshore in the Baltic Sea. So they looked at all these different regions around the world and ultimately concluded that the emissions associated with producing a barrel of oil in the Gulf are relatively low compared with most other parts of

the world. I keep emphasizing the word producing because the emissions that they looked at are the emissions that come along with literally pulling the oil out of the ground and packaging it up.

at this narrow technical question. And then with this report in hand, this oil and Gas Industry trade association put out press releases and blog posts saying, look, how much climate friendlier oil production in the Gulf of Mexico is compared with all over the world, And wouldn't it be great if America produced more oil in the Gulf of Mexico. Isn't that a great idea? Both for our economy and the climate. Yeah.

US companies operate within stricter environmental regulations and that that helps as well and all of that stuff. And there again, McKinsey was sort of like, we just supplied the data and the you know, technical analysis. We didn't come to any conclusions or write this report or you.

drilling to occur in the Gulf of Mexico. So it's it's it's worked its way into the conversation.

one point five degrees. And there is a new Race to Zero initiative to develop a set of effectively a set of best practice guidelines for professional service providers, including consultancies and ad agencies and law firms to adhere to. So the reason Race to Zero is now focusing on professional service providers like consultancies is exactly because they're in this unique position of having influence and of not necessarily

having a large carbon footprint on their own. When you think about what is the carbon footprint of a consultancy like ICF, Well, they use energy to keep the lights on in their office space. You know, maybe they're you know, driving to work. It's it's it's relatively you know, small potatoes types of things. They're not running huge industrial facilities that are creating a lot of pollution. But what they are doing is they're working with clients who run huge

industrial facilities. They create a lot of pollution, and the advice that they provide to those clients or the types of technical analysis they do, has these downstream ripple effects on really like the entire economy and Race to Zero's contention here is that those ripple effects and the emissions associated with them are likely to be a lot greater than the emissions that a firm like ICF can kind

of claim a flame as their own emissions. So we're talking emissions that are even a little bit beyond the scope one two three sort of standard reporting framework. This is indirect emissions associated with giving advice. So if you tell a utility it's going to cost you this amount of money to decarbonize, and the utility looks at that number and goes, oh, oh, we're not going to do that, you know, right, that has a climate impact.

they're attempting to account for their own climate impact. And here are some best practices you can follow if you want to drive down emissions and climate impact throughout your practice, such as maybe taking a hard look at your entire client base and what sorts of projects you're working on for them and the climate impact of those projects, and making some high level corporate decisions about the types of work you will continue to do if you want to

align your practice with a decarbonized future.

idea of renewable natural gas as a climate solution. But just give us like a little tease of what what exactly are the sorts of things that that they're doing to just like I don't know, kind of like provide the evidence base for this being a good idea.

produced from a biological source. So maybe it's gas escaping from landfills during decomposition, or maybe it's methane that is synthetically manufactured by taking crop residues and subjecting them to a gas production process. It's this umbrella term that can refer to a lot of different things, but it's effectively methane gas that can be a drop in replacement for fossil gas. And there's a lot of debate and controversy, to put it mildly, around how much of a climate

solution this can actually be. But to the gas industry, it's like it's this amazing thing that allows them to effectively do nothing to change their infrastructure or their operations. They just need to partner with companies that can supply and produce a lot of this RNG, and using some tricky and again very controversial math, can claim that they've canceled out most of their emissions on paper.

production potential nationwide. So they looked at all these different possible sources of RANG from cow manure to methane to synthetic production of RANG from energy crops and forest residues, and effectively summing all those sources up for every state in the country, found that there's this huge potential supply

potential supply of RANG out there. This is, I want to be very clear, doesn't really exist today, right, This is an industry that is like largely on paper at this point, but effectively, I think the top line conclusion of that report was that ninety five percent of residential natural gas usage could be replaced with RANG. Wow, which is huge.

side studying this will say is realistic. And that was the whole point I think of the report was to show that there's this great potential if we make a lot of assumptions, you know, and one of those assumptions is that we actually want to do this and that this is a good climate solution, which a lot of independent researchers who've studied RANG have pushed back pretty strongly against the idea that this is going to significantly reduce

the gas industry's emissions. There's a case to be made that if we're capturing methane that would have escaped to the atmosphere anyway, Yeah, that is preventing pollution, and that's a good thing. But this report and subsequent reports that ICF has worked on for states and for individual utilities and cities, don't just look at that narrow, that sort of narrow slice of the RANG production, that is the

methane that would have escaped as pollution anyway. They look at how could we make as much of this as possible, And to make as much RANG as possible, you need to literally produce new methane. So at that point you're not talking about capturing pollution. You're talking about producing more greenhouse gases, right, some of which are inevitably going to leak to the atmosphere and compound the climate problem.