Market Shifts And Digital Innovation Among Environmental Consultancies
On June 19, Verdantix attended the 2019 Environment Analyst Business Summit in London, featuring 84 attendees and a mix of environmental consultancies, regulatory agencies and technology providers. The event brought together a high calibre of CEOs, senior executives, heads of environmental practice areas and innovation leaders. One prevalent message, as articulated by John Chubb, CEO of RPS, “In light of the climate crisis, environmental consultants need to rebel by demanding to work only on projects with a positive impact on climate.”
Verdantix captured insights from the event across two primary topics: market landscape shifts driven by policy and investment; and digital innovation. What are the Summit’s key takeaways for the environmental consulting market?
First, it is uncertain what will be the impact of Brexit on the UK environmental consulting market. However, Matthew Farrow, Executive Director of the Environmental Industries Commission perceives Brexit mostly in a positive light considering that “Brexit could be a catalyst for radical environmental policies.” There was agreement throughout the room that the UK government must start setting milestones for the 2050 target of net zero greenhouse gas (GHG) emissions. Also, the environmental consultants showed concern for the need to accurately quantify natural capital to undertake biodiversity assessments and measure true progress toward the government’s 2050 goal.
Second, environmental, social and governance (ESG) metrics and management were another focus area. The fact that 80% of global investors are talking about ESG shows how private equity firms feel pressure to demonstrate good ESG management across their portfolios. What has driven this? One big driver is the Task Force on Climate Related Financial Disclosures (TCFD), which has received strong commitment to its voluntary recommendations across the financial community and already is mandatory in France. As a result, the market for ESG due diligence has experienced major advances in metrics. ESG criteria have progressed from limited calculations of abated carbon emissions to now including scorecards that measure 30 impacts from cradle to grave, as developed by Earth Capital, an advisory firm for responsible investment.
Finally, the Summit clearly demonstrated that digital transformation is considered a strategic imperative to succeed in this price-competitive market. A live poll uncovered that ‘keeping up with digital innovation’ is the second most concerning challenge for Summit attendees. It was clear that the environmental consultancies find themselves at different stages along the digital transformation journey. For example, RPS has adopted unmanned aerial vehicles (UAVs, or drones) and artificial intelligence (AI) for ecological characterisation, which has reduced requirements for ecologists’ labour from 1000-man days down to 12-man days during the project. Another live poll asked the preferred approach to digital transformation across a respondent’s firm. For this poll, almost half (41%) selected ‘training existing staff.’ Fittingly, Royal Haskoning’s innovation hub involves 6000 staff, bringing to fruition the firm’s digital environmental impact assessment (EIA) tool. This tool has been used to conduct an environmental mapping exercise to characterize the whole of the Netherlands. Capitalising on this digital theme, AmbiSense offers Internet of Things (IoT) and AI enhanced data collection and analytics that have enhanced projects for the British Geological Survey, Leap Environmental and The Environmental Protection Group.
To learn about successful digital strategies and application for innovation across the global EHS consulting industry, access our Green Quadrant Digital EHS Services 2019.