The World’s Largest Environmental ConsultanciesFeb 28th, 2016 | By EHS Journal | Category: Analysis, News and Notes, Quick Reads
The value of the global environmental consultancy (EC) market reached US$ 27.5 billion (£ 17.7 billion) in 2014, down 4.1% over the previous year, according to the latest report by business intelligence provider Environment Analyst. The sector lagged global economic growth (3.4% in 2014) mainly due to the impact of the international mining sector downturn, the oil price collapse, and a continuing squeeze on national government spending in key markets.
The Largest Environmental Consulting Firms
The largest environmental consultancies ranked in terms of 2014 gross global EC revenues were:
- CH2M Hill
- Tetra Tech Inc
- Environmental Resources Management (ERM)
- Golder Associates
- AMEC Foster Wheeler
- Ramboll Environ
- WSP │Parsons Brinckerhoff (tied with GHD)
- Grontmij NV (purchased by Sweco in Q4 of 2015)
- Antea Group
- Cardno (tied with RPS Group)
- RPS Group
- MWH Global
- Mott MacDonald (tied with Royal HaskoningDHV and Worley Parsons)
- Royal HaskoningDHV
- ICF International
- Coffey International
Together the environmental consultancy practices of the “Global 23” claimed a combined share of 44% of the total global market in 2014. Reflecting the fragmented nature of the sector, only the top three players — AECOM, CH2M, and Tetra Tech — were able to boast overall market shares in excess of 4.5%, largely thanks to their strong positions in the dominant North American region, which accounts for 52% of the total market.
This year’s list reflects the impact of several of the industry’s recent mega-mergers. It also reveals AECOM as the new global market leader following its US$ 4 billion acquisition of fellow U.S. consulting and engineering giant URS last year. This transaction created a 9,000-person force in the global environmental consulting field, generating revenues of US$ 1.6 billion, equivalent to a 5.9% share of the sector.
Other company mergers set to further consolidate the rankings next year include the Swedish multidisciplinary consultancy Sweco’s recently completed purchase of Danish player Grontmij, and U.S.-based Tetra Tech’s bid for Australia-based Coffey, which is set to close early in 2016.
Editor of Environment Analyst’s Global Market Intelligence Service and co-author of the report Liz Trew 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.
Our latest research makes for quite sombre reading. It shows that on average the Global 23 peer group experienced a 9.2% dip in internal (or organic) EC revenues in the period from 2011-2014 — stripping out the effects of acquired revenues through M&A. The specialists have once again proven themselves to be the most resilient — although they have not escaped from the current global economic conditions entirely — with a 2% organic revenue dip, while the multidisciplinaries have suffered the most with an organic sales decline of around 25%. The large-scale integrated firms have also struggled with an 8% internal revenue drop over the period.
Those identified as specialists in the study include: Antea Group, ERM, Golder Associates, SLR and Tetra Tech. The analysis supports the theory that there is a client preference for firms that retain their specialist focus in the environmental/sustainability consulting field.
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. The 2014 market summary is the fifth year that Environment Analyst has published this report. Detailed sector information including market analysis, trends, and company profiles is available in the Global Environmental Consulting Strategies and Competitor Analysis 2015.
Photograph: Yellowstone National Park by Michael Bittner, Winchester, U.S.A.