Environmental Consulting
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Industry Overview
The US environmental consulting industry includes about 9,000 companies, ranging in size from one-person businesses to global corporations, with combined annual revenue of nearly $11 billion. Major companies include CH2M HILL and Ecology and Environment, as well as environmental engineering and consulting divisions of large engineering and construction firms such as Fluor and Bechtel. The industry is fragmented: the 50 largest firms account for less than 30 percent of industry revenue.
Competitive Landscape
Demand is driven by the needs of businesses and government agencies to comply with new, existing or anticipated environmental laws and regulations. The profitability of an individual company depends on its ability to accurately predict project costs and to secure contracts with large organizations such as the US government. Large firms have the advantage of providing a wide range of environmental expertise and can thus offer "one-stop shopping" for clients. Small firms are able to compete by specializing in regional markets or particular areas of expertise. The industry is labor-intensive: average revenue per employee is about $140,000.
Products, Operations & Technology
Major environmental consulting services include environmental assessment (determining the environmental condition of a particular site), site remediation (cleaning up polluted sites), natural resource management (strategies for managing a particular environment, such as a wetlands area), environmental auditing (determining an organization's environmental impact, such as its carbon emissions), and waste management. Of the major sources of consulting-specific revenue, environmental assessment accounts for about 25 percent; site remediation, 22 percent; natural resource management, 11 percent; and environmental audits and waste management, 7 percent apiece.
Additional services include regulatory compliance, construction and land use permitting, environmental engineering, management consulting, the cleanup of hazardous spills, air and water monitoring and management, and services that support producing and/or using alternative energies. Larger firms increasingly offer management consulting to help clients address complex issues such as climate change or incorporate elements of environmental, economic, or social sustainability into operations.
Firms tend to increase their service offerings with scale, as larger firms can afford to hire employees from a variety of specialties. Environmental consulting divisions of large engineering and architectural firms offer services that complement the product lines of those firms. For example, Bechtel, which often consults for energy production companies, has worked on projects designed to reduce emissions at power generation plants.
Environmental consulting work is on a per project basis, and some firms rely on one customer for a majority of their revenue; for many firms this is the government. Environmental consulting work is specialized and labor-intensive, and a high proportion of employees have bachelors or graduate degrees. The expertise of employees is what environmental consultants' clients pay for, and firms pay continual attention to attracting and retaining qualified employees. Employees range from engineers to biologists, ecologists, and planners.
Technology used by environmental consulting firms ranges from basic software and hardware to handle budgeting and accounting functions to proprietary software that can monitor air, soil, and water quality for clients. Additionally, some firms have laboratories to measure specific indicators of environmental quality, which requires extensive testing equipment and processing software. Some firms offer environmental management systems (EMS), which involve customized applications designed to help clients' processes comply with regulations and sustainability goals.
