The World’s Largest Environmental Consulting Firms (2013 – 2014)

Feb 15th, 2015 | By | Category: Environmental Management

EHS Journal - Sunflower by Gabriella Fabbri

Editor’s Note: This article, published in February 2015, provides information on company performance from 2013. For an updated list of the world’s largest environmental consulting companies, click here.

 

The world’s 25 largest environmental consulting (EC) companies accounted for 46% of the total EC market according to the latest data released by Environment Analyst. The data, which reflected financial performance for 2013, showed that the EC market reached an estimated value of US$ 28.7 billion.

Overall market revenues in 2013 fell flat after three successive years of growth due to a slowdown in demand from key client sectors such as the U.S. federal government and international mining. Combined revenue at the largest 25 companies decreased 1.4% in 2013.

Environment Analyst projected that the global EC market will reach US$ 32.6 billion in the next five years, an increase from 2013 of 13.5%.

Liz Trew, editor of Environment Analyst’s Global Market Intelligence Service and co-author of the report, commented, “International environmental consultancies are once again seeing challenging conditions with many of their key markets flat or in decline – and this has been one of the drivers for consolidation in the sector. Unfortunately, news of job losses has once again been hitting the headlines as many of these firms seek to adjust their resources to the slowing demand.”

 

Merger Mania                   

As a result of recent mergers and acquisitions, two firms appeared in the analysis for the first time: Jacobs, which acquired SKM Consulting, and GHD, which bought Conestoga Rovers and Associates (CRA). Antea Group (formerly Oranjewoud Consultancy and Engineering) is another newly profiled firm this year.

The joining forces of AECOM and URS in a $4 billion takeover deal completed in Q4 2014 will create an organization with 100,000 staff and a clear leadership position in global market share (7.2%) and revenue.

Other changes that will impact the top rankings next year include the acquisition of Parsons Brinckerhoff by WSP Global (also completed at the end of last year) and Danish player Ramboll’s intended purchase of ENVIRON.

 

The Largest Environmental Consulting Firms

The largest environmental consultancies ranked in terms of 2013 gross global EC revenues were:

  1. CH2M Hill
  2. Tetra Tech Inc.
  3. Arcadis
  4. URS Corporation (owned by AECOM from 2014)
  5. Golder Associates
  6. Environmental Resources Management (ERM)
  7. AECOM
  8. AMEC Environment & Infrastructure
  9. GHD (including Conestoga Rovers)
  10. Grontmij NV (joint 10th with Cardno)
  11. Cardno (joint 10th with Grontmij)
  12. Antea Group
  13. MWH Global
  14. RPS Group
  15. ENVIRON
  16. Jacobs (including SKM Consulting)
  17. Parsons Brinckerhoff (owned by WSP Global from 2014)
  18. WorleyParsons
  19. Royal Haskoning DHV
  20. WSP Global
  21. ICF International
  22. Mott MacDonald
  23. ATKINS
  24. SLR
  25. Coffey International

 

Business Overview

Environment Analyst identified three major types of EC operator in terms of their core business model, market positioning, and how environmental consultancy fits in with the overall group. Business model types include:

  • large-scale integrated firms,
  • multidiscipline hybrids, and
  • specialists.

According to Liz Trew, “…our research shows that the smaller specialist firms in the peer group have been growing and thriving over the last few years in spite of the market challenges, while the large-scale integrated and multidisciplinary firms — for whom environmental consulting activities account for less than 50% of the business (and for some as little as 2-5%) — have been struggling to grow organically in the space.”

Although they are in the minority among the Global 25, the report finds that the specialist firms —including Antea Group, ENVIRON, ERM, Golder Associates, SLR and Tetra Tech — achieved average organic EC revenue growth in excess of 25% from 2010-2013. Meanwhile, the non-specialists were only able to record organic growth of 1 – 1.3% during the three-year period. Trew added: “Our analysis supports the theory that there is a definite client preference for firms which retain their specialist focus in the environmental/sustainability consulting field. But at the same time, the wider support services market is moving towards super-sized companies with full life-cycle service provision offering clients a one-stop shop, which means the specialists are under pressure to diversify.

“Another issue is that the large integrated firms are more focused on winning high-value contracts worth tens or hundreds of millions of dollars, while the EC sector is characterized by a large tail of much smaller contracts. We have already seen some evidence of the super-groups cutting back their environmental teams and operating them more as an internal support function than as standalone consulting units.”

The EC staff numbers employed by the Global 25 rose by just 1.8% to reach approximately 72,400 in 2013, but twelve of the practices saw a contraction in headcount.

 

Practice Allocation

Based on the service area breakdown of the Global 25’s aggregated EC revenues, Environment Analyst found that contaminated land services remained the largest single work area in global EC market in 2013, representing some 32% of the total, ahead of the 23% share held by water and waste management. Environmental impact assessment & sustainable development accounted for a further 18%, while environmental management, compliance, and due diligence services represented 14%. Climate change & energy related services generated a further 8% of the total.

 

Growth Projections

According to the study, the global EC market is forecast to reach US$ 32.6 billion (£19.7bn) by 2018, up 13.5%. Commenting on future growth prospects for the global EC market, Liz Trew said:

“Although our forecast model for the global market has been downgraded from the previous edition of the report a year ago to a modest compound annual growth rate (CAGR) of 2.6% over the next five years, this nevertheless equates to an additional £3.9 billion in EC revenues being added by 2018.

“We expect the specialist firms which retain their independence and environmental focus to continue to do well and grow organically above the market rate as they have done so historically. There are also more big M&A deals on the horizon to further shake up the rankings.

“Future market growth will also be highly sector- and region-specific, with spend on climate change and energy services set to grow by over 30.5% in the next five-year period, while Latin America and Africa/Middle East will be higher growth regions – seeing increases of 33.6% and 26.7% respectively.”

 

About Environment Analyst

Environment Analyst Ltd is a publishing and market research organization focusing on the environmental consulting and support services sector. It collects and analyzes information from the industry for the benefit of the industry.

 

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