CLIMATE CHANGE CONSULTING MARKET ANALYSIS

Climate Change Consulting Market Size and Trends

The global climate change consulting market is estimated to be valued at US$ 6.04 Bn in 2024 and is expected to reach US$ 9.37 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.5% from 2024 to 2031.

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Governments and organizations across the world are increasingly focusing on reducing greenhouse gas emissions and moving towards more sustainable solutions to address climate change. This is driving greater demand for consulting services related to climate change mitigation and adaptation strategies.

With the increasing impacts of climate change like rising sea levels, extreme weather events, etc. more companies are looking to consult experts to assess risk exposure and develop plans to enhance climate resilience. Furthermore, guidelines and regulations regarding environment protection and sustainability reporting are also becoming more stringent. This is prompting more organizations to seek advisory on improving processes and achieving compliance. Overall growth in climate action initiatives by governments worldwide will continue boosting opportunities for climate change consulting providers.

Increasing regulatory pressure for carbon reduction and sustainability

With rising environmental concerns among both public and private sectors, governments across the globe have become more stringent with climate change regulations in recent years. Many nations like Japan, China, U.S., etc. have committed to significantly reducing their carbon footprint and transitioning to cleaner sources of energy in order to achieve the UNFCCC's Paris Agreement target of limiting global temperature rise to 1.5°C. The European Union has spearheaded climate action efforts with its ambitious Green Deal plan, which focuses on making the EU carbon neutral by 2050. Under this, the bloc has implemented stricter emission norms for industries and set carbon pricing with its Emissions Trading System. On similar lines, China—the world's biggest polluter—has pledged to become carbon neutral by 2060 while also aiming to peak its emissions earlier by 2030.

This mounting regulatory push has compelled companies to overhaul their operations and transition to more sustainable practices. Energy utilities are investing heavily in renewable power generation to replace coal. Automakers are ramping up electric vehicle production targets to meet toughening fuel-efficiency and emission standards. Airlines are exploring the potential of sustainable aviation fuel. Manufacturing plants are exploring ways to reduce energy consumption and shift to clean energy sources. With current policies expected to become more stringent over time to curb global warming under 2°C, all businesses need to strategize on cutting carbon footprints and building resilience against climate regulations. This has increased the need for expert climate change consultancy and advisory services that can guide organizations across industries on decarbonization pathways, sustainability reporting practices, assessing regulatory risks, and compliance needs.

In January 2023, AECOM, a global leader in infrastructure consulting, expanded its environmental consulting division to focus on climate resilience projects. This strategic enhancement aims to strengthen AECOM's capabilities in addressing the increasing challenges posed by climate change, enabling the company to provide innovative solutions that help communities adapt and thrive in a changing environment. By bolstering its expertise in climate resilience, AECOM seeks to support clients in implementing sustainable practices and infrastructure that promote long-term environmental sustainability.

Market Concentration and Competitive Landscape

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Growing Awareness of Climate Impacts Among Businesses and Governments

Along with rising regulations, climate change impacts are increasingly being felt through severe weather events like cyclones, droughts, wildfires, and flooding. The damage caused by these has been amplifying public calls for climate action as well as driving awareness among businesses and governments. Mega-corporations such as Deloitte Touche Tohmatsu Limited, PwC (PricewaterhouseCoopers), McKinsey & Company, Boston Consulting Group (BCG), etc. are facing growing demands from investors, customers and employees to demonstrate strong climate leadership and responsibility. Large asset managers like BlackRock are also using their influence to push companies towards addressing sustainability and climate risks in their strategies and operations. At the same time, governments worldwide recognize climate change as a critical global threat that needs coordinated policy action as well as financing for climate adaptation projects.

This growing awareness is encouraging more proactive moves from both private and public entities. Tech giants are committing to becoming carbon neutral or removing more carbon than they emit. Corporates are exploring science-based approaches to set emission reduction targets. Governments are launching green stimulus packages and climate finance initiatives. As climate change impacts become more visible, widespread and expensive, mitigation and adaptation action are gaining prominence on all agendas. This increasing recognition of climate risks and opportunities is amplifying demand for counsel from specialized advisors to better understand physical and transition climate risks, quantify the costs of inaction, and identify viable solutions aligned with science-based targets and global climate goals.

Key Takeaways from Analyst:

Countries around the world are focusing heavily on lowering carbon emissions to curb the impacts of global warming. This will drive significant demand for climate change consulting services to help organizations and governments devise strategies to cut emissions. Population growth and rapid urbanization in developing economies are also major drivers as cities look to adopt more sustainable practices. However, budget constraints in some nations may act as a restraint to consulting spend.

North America currently dominates the market owing to stringent climate targets and carbon pricing policies. Within the region, U.S. and the Canada, account for most of the demand. However, the Asia Pacific region is expected to see the fastest growth led by China, India and other Southeast Asian countries with rising commitment to meet Paris Agreement goals.

On the opportunities side, transitioning to renewable energy supplies, green infrastructure development, adoption of electric vehicles and carbon capture technologies will open up new consulting requirement across industries. Additionally, implementing carbon pricing mechanisms, evolving environmental, social and governance (ESG) reporting standards and shaping policy through advisory will present significant prospects for consulting companies.

Market Challenge - High costs associated with consulting services

One of the major challenges faced in the global climate change consulting market is the high costs associated with hiring consulting services. Climate change consulting requires thorough research, analysis, and documentation of complex environmental issues. Consulting firms often employ teams of climate scientists, data analysts, environmental lawyers, and policy experts to comprehensively study the challenges of climate change and provide strategic recommendations. Assembling such specialized expertise does not come cheaply. The high consulting fees prove as a deterrent for many small and mid-sized organizations with limited budgets. With stringent timelines and complex project scopes, climate consulting projects also tend to overrun costs. The price sensitivity in the current economic environment further discourages organizations from making big investments in climate change advisory. For the market to see greater spending, costs need to be optimized through leveraging technologies and scaling operations.

Market Opportunity - Expansion of renewable energy projects and investments

One significant opportunity for growth in the climate change consulting market is the expansion of renewable energy projects and investments across the globe. With the rising threat of climate change, more countries are setting ambitious targets to switch to cleaner energy sources and reduce dependence on fossil fuels. This is leading to substantial investments by both governments and private players in the development of renewable energy infrastructure including solar, wind, hydro and biomass projects. Successful planning, development and management of such large-scale renewables projects requires in-depth expert advice and strategy support. Consulting firms with expertise in clean technologies, energy transition roadmaps and carbon accounting stands to gain significantly from this boom in the renewables sector. The climate advisory domain is expected to grow manifold in the coming years driven by the renewable energy mega projects around the world.

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Insights By Service Type - Carbon Footprint Assessment: Driving the Climate Change Consulting Market Forward

In terms of service type, carbon footprint assessment is expected to contributes 33.7% share of the market in 2024 owing to growing regulatory pressures and corporate sustainability goals. Assessing an organization's carbon footprint is a crucial first step toward improving environmental impacts. Additionally, consumers are increasingly concerned with sustainability, prompting many large corporations to set ambitious carbon reduction targets. Measuring current footprint levels allows companies to understand major emission sources, compliance risks, and cost-saving mitigation opportunities. Carbon foot printing consulting services help clients streamline data collection, verify emissions according to recognized standards, and benchmark performance over time. Consultants also guide mitigation strategies tailored to each sector and enterprise. As climate change moves higher on government and business agendas, the need for reliable, standardized carbon accounting will continue propelling this segment.

For instance, In July 2021, Environmental Resources Management ( ERM ), the world's largest pure-play sustainability advisory firm, acquired a sustainability consulting firm to expand its service offerings. This strategic acquisition aims to enhance ERM's capabilities in delivering comprehensive sustainability solutions, reinforcing its position as a leader in the industry. By integrating the expertise of the acquired firm, ERM seeks to provide clients with improved services in areas such as environmental, social, and governance (ESG) strategy, impact measurement, and sustainability reporting, further supporting organizations in their transition to more sustainable practices.

Insights By End User - Energy and Utilities: Leading the Transition to Clean Energy

Based on end user, the energy and utilities segment is expected to contributes 36.2% share of the global climate change consulting market in 2024 owing to its central role in decarbonizing the world economy. As industrialized nations transition away from fossil fuels in line with carbon emission reduction commitments, the electricity generation and distribution systems are undergoing massive transformation. Renewable energy sources like solar and wind are being scaled up rapidly to replace coal and gas-fired plants. Meanwhile, technologies like energy storage, smart grids, electric vehicles, and carbon capture utilization and storage are being developed and deployed. Consulting services help utilities and energy producers evaluate emissions reduction pathways, adapt business models, optimize clean energy infrastructure investments, and manage political and regulatory changes. Consultants also facilitate partnerships and mergers between utilities and renewable technology providers. As energy transitions accelerate globally, extensive expertise will be required to navigate new policies, technologies and market dynamics, sustaining high demand within this strategic end-user segment.

Regional Insights

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North America has established itself as the dominant region in the global climate change consulting market. The region is expected to hold 34.5% of the market share in 2024. The U.S. is home to many of the top climate change advisory and consulting firms worldwide. Several state and federal government initiatives such as Environmental Protection Agency (EPA) Climate Change Programs, Federal Energy Regulatory Commission (FERC), Department of Energy (DOE), etc.  to counter climate change have boosted the climate consulting business in the region. Leading sustainability consulting firms in the U.S. and Canada such as Tetra Tech, ICF International, Golder Associates, Jacobs Engineering, etc. work with multinational clients and international organizations on a wide range of climate-related solutions. The well-developed nature of the market and strong industry presence have made North America the hub for major climate change consulting contracts globally.

Asia Pacific has emerged as the fastest growing regional market for climate change consulting in recent years. Rapid industrialization and economic growth in countries such as China, India, Indonesia, and others have raised emissions levels substantially. At the same time, many governments in Asia are implementing policies and targets to transition to more sustainable development pathways. This has spurred the demand for climate change consulting services across sectors. Local firms are entering the space and expanding their services while international players are also focusing on opportunities in the region. Southeast Asian nations regularly engage global consultants on climate adaptation and mitigation projects funded by multilateral agencies. The region's heavy reliance on trade has made climate change risks and response an important consideration in policymaking as well. With diverse needs and priorities across the diverse Asian economies, the market sees continuous development of new service offerings by providers. The combination of rising emissions, increased climate action and evolving policy landscape outline Asia Pacific as an area of high growth over the coming years.

Market Report Scope

Climate Change Consulting Industry News

• In February 2024, WSP Global Inc., a Canda-based design and engineering consulting firm known for its commitment to sustainability, merged with a major engineering firm to enhance its climate change consulting capabilities. This strategic merger aims to bolster WSP's expertise in providing comprehensive climate solutions, enabling the company to better support clients in navigating the challenges of climate change. By integrating the capabilities of the acquired firm, WSP seeks to expand its service offerings and strengthen its position as a leader in the climate change consulting market, responding to the increasing demand for sustainable practices across various industries.
• In June 2023, McKinsey & Company, a global management consulting firm renowned for its expertise in various industries, collaborated with several NGOs to develop sustainable practices in agriculture. This partnership aims to address the pressing challenges of climate change and resource management by promoting innovative agricultural techniques and sustainable farming methods. By leveraging the insights and resources of both McKinsey & Company and the NGOs, the initiative seeks to enhance the resilience of agricultural systems and support farmers in adopting environmentally friendly practices, ultimately contributing to a more sustainable future for the agricultural sector.
• In October 2022, PwC, a global leader in professional services and consulting, launched a new suite of climate risk assessment tools designed for businesses. These tools aim to help organizations effectively evaluate and manage their exposure to climate-related risks, facilitating better decision-making in the face of climate change challenges. By providing robust methodologies for assessing physical climate risks, PwC seeks to empower companies to integrate sustainability into their strategic planning and operations, reinforcing its commitment to supporting businesses in navigating the complexities of climate impact and resilience.
• In July 2022, Intertek Group PLC, a leading Total Quality Assurance provider for various industries worldwide, announced its acquisition of Clean Energy Associates LLC (CEA). CEA is a prominent independent provider of quality assurance, supply chain traceability, and technical services specifically tailored for the rapidly growing solar energy and energy storage sectors. This acquisition aligns with the increasing global demand for energy and the need for sustainable practices as the world strives to reduce greenhouse gas emissions and enhance energy production from diverse sources in the short, medium, and long term.

*Definition: The global climate change consulting market consists of firms that provide advisory services to public and private sector organizations regarding strategies and solutions to mitigate and adapt to climate change impacts. These consultancy firms help clients develop science-based decarbonization roadmaps, implement carbon pricing programs, transition to renewable energy and develop climate resilience plans to build defence against heat waves, flooding, wildfires, and other climate-related risks. The consulting services are in high demand as organizations and governments seek expert guidance and strategies to reduce greenhouse gas emissions and build adaptive capacity.

Market Segmentation

• By Service Type Insights (Revenue, US$ Bn, 2019 - 2031)
• • Carbon Footprint Assessment
  • Climate Risk Assessment
  • Sustainability Strategy Development
  • Compliance and Reporting
  • Others
• By End User Insights (Revenue, US$ Bn, 2019 - 2031)
• • Energy and Utilities
  • Government and Public Sector
  • Manufacturing
  • Agriculture
  • Transportation
  • Others
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
• • Deloitte Touche Tohmatsu Limited
  • PwC (PricewaterhouseCoopers)
  • McKinsey & Company
  • Boston Consulting Group (BCG)
  • ERM (Environmental Resources Management)
  • AECOM
  • Jacobs Engineering Group
  • WSP Global Inc.
  • SLR Consulting
  • Ramboll Group
  • Tetra Tech, Inc.
  • Navigant Consulting (now part of Guidehouse)
  • Wood PLC
  • Ricardo plc
  • Anthesis Group