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.

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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.