LONDON--(BUSINESS WIRE)--Spending on sustainability consulting engagements will grow from $877 million in 2015 to over $1 billion in 2019, according to a new forecast model produced by independent research firm Verdantix. Based on interviews with 260 heads of sustainability in 13 countries across 21 industries and financial data from 5,662 firms, the model forecasts growth in spending on sustainability consulting of just 4% per annum over the next five years.
“Ten years ago, the sustainability consulting market didn’t exist as a separate category of consulting work” commented Yaowen Ma, Verdantix Analyst and author of the report. “That’s not true anymore. In 2015, large corporations will spend $877 million on management consulting advice relating to sustainability reporting, energy efficiency, sustainability risk assessment, sustainability strategy, sustainable supply chains and product sustainability. However, this is not the booming market that the Big Four accounting firms and other consultants expected or hoped for.”
The analysis in the Verdantix report, Sustainability Consulting: Global Market Forecast 2015-2020, identifies several reasons why the sustainability market is challenging for consultants:
- Only 48% of spending on sustainability engagements is paid for by the head of sustainability, ten other functions contribute the remaining 52%
- Even sustainability reporting advice is only funded entirely by 60% of heads of sustainability, creating work for consultants to find additional budget
- Forecasted growth of 4% per annum between 2015 and 2020 is less than the trend growth rate for the major consulting and accounting firms
- Fast-growing, emerging economies like China and India are not yet big spenders on sustainability consulting and account for just 19% of the global total
- Spend per firm on sustainability consulting averages just $150,000 to $200,000 per year which is well below ideal deal sizes for management consultants
“Our market size and forecast model for sustainability consulting provides unique, data-driven insight into the detail of this complex market” commented Rodolphe d’Arjuzon, Verdantix Managing Director. “The analysis makes it clear that the large volume of corporate sustainability reports and PR is not currently translating into big spending on sustainability advice. But if you drill down into initiatives like supply chain compliance with social and environmental policies, new stock exchange rules in India or the sustainability role of EH&S leaders in heavy asset sectors you can find growth opportunities above and beyond the unexciting 4% baseline trend.”
To learn more about the global sustainability consulting market forecast join the Verdantix webinar entitled “Sustainability Consulting: Market Size And Future Forecast” on March 5, 2015.