Environmental Consulting Services Market Trends

Growth Drivers  

• Rising need for sustainable supply chain management: Due to increasing environmental regulations prompting companies to seek greener alternatives, the need for a robust sustainable supply chain is growing so as to mitigate disruption to operations while maintaining sustainable practices. Environmental consulting firms assist in identifying the environmental impact of supply chains. Many companies are turning to sustainable supply chains to comply with environmental regulations and honor corporate environmental, social, and governance (ESG) commitments. For instance, the Godrej Group pledged to achieve zero deforestation in its supply chain by 2020. A Harvard Business Review report in 2020 highlighted the Responsible Business Alliance (RBA) consisting of Intel, HP, Apple, Dell, and Philips to provide assessment tools and training to suppliers to build a robust sustainable supply chain.
• Growing sustainability initiatives and environmental concerns: The global public perception has positively shifted to sustainable practices. For instance, in June 2024, Clean Energy Wire published a report on the Edelman Trust Barometer survey in fourteen countries where 93% of responders stated that climate change is a major threat to the planet. The 2024 People’s Climate Vote survey by the UN Development Program which included responders from 77 countries representing 85% of the global population stated 80% of survey respondents seeking their governments to take stronger actions to combat the climate crisis.
  
  The younger demographics are also pushing the call for sustainable practices by governments and industries. Environmental consulting services are projected to partake in the booming trends for sustainable practices by assisting governments and private entities in managing their sustainability reports. In May 2023, UN Climate Champions reported Unilever, Microsoft, Nike, Salesforce, and L’Oréal pledging to net zero emissions.
• Technological advancements for efficient consultancy: Rapid advancements in technology have enabled environmental consulting firms to improve the efficiency of their services. Firms have navigated efficient means to manage data, conduct environmental assessments, and deliver solutions. For instance, Geographic Information Systems (GIS) and remote sensing technologies enable environmental consultants to accurately map and monitor land use, vegetation, and water resources.
  
  IoT devices such as air and water quality sensors provide real-time data to monitor pollution levels while satellite imagery can help collect data from areas difficult to access. Environmental consultancy firms can provide customized solutions and assist in risk planning for various industries using accurate data, leading to growing demand for the services. For instance, in December 2022, UltraSystems announced the use of GIS in their consultancy services to analyze projects ensuring clients produce documents for the California Environmental Quality Act and the National Environmental Policy Act.

Challenges

• Data availability and technological disruptions: The environmental consulting services market depends on data and any disruptions in the accuracy of data can be a major impediment in meeting deadlines for the clients. Clients have high expectations on reliability, quality, and cost-effectiveness of environmental consulting and any impediment in providing accurate data and faulty risk planning solutions can adversely affect the environmental consulting services market growth. Due to variable environmental regulations in various regions, gathering high-quality data can be challenging.
• High costs and pricing constraints: The environmental consulting services market is extremely competitive with numerous firms offering their services which causes the issue of pricing pressure. This increasing competition in the sector puts a downward pricing pressure of consultancy services forcing firms to reduce prices to differentiate themselves in the environmental consulting services market. This can negatively affect operations as well as affect new and smaller players competing in the market. Consultancies will need to curate strategies for pricing structures that allows them to recuperate investments in research and development.