Market for sustainability advice failing expectations

27th February 2015


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  • Business & Industry ,
  • Consultancy

Author

Mary Moody

Global spending on sustainability consultancy will rise from $877 million this year to more than $1 billion by 2019, though growth will be far below industry expectations, according to a study.

Research organisation Verdantix forecasts annual growth of just over 4% in spending on sustainability consulting over the next five years. This it says, is less than the trend growth rate for the major consulting and accounting firms. Annual expenditure per firm on sustainability consulting averages just $150,000 to $200,000, which is well below what is expected by management consultants, says Verdantix.

“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,” said the report’s author, Yaowen Ma.

The analysis says growth rates are failing to match expectations because 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. It also suggests that sustainability departments have less control of purchasing decisions than some other functions.

The report found that less than half (48%) of spending on sustainability engagements is paid for by the head of sustainability, while 10 other functions contribute the remaining 52%. Even sustainability reporting advice is funded entirely by only 60% of heads of sustainability, says Verdantix.

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