ESG CONSULTING MARKET

 As organizations change their business models in response to environmental and social challenges, demand for sustainability consultants is at an all-time high. According to recent studies, the market for environmental, sustainability, and governance consultancy will expand at a double-digit compound annual growth rate until 2027.

 

Consumers are increasingly avoiding businesses with poor ESG Consultant records, and environmental, social, and governance (ESG Strategy) centricity is becoming more and more significant in economic and larger societal concerns. The majority of businesses have now realized and understood that aggressively addressing ESG concerns enhances commercial outcomes by addressing social demands. Investors are becoming more cautious about financing companies that do not take these risks seriously.

 

However, even though ESG Consultancy has taken such a prominent place on the agenda, many mid-market businesses appear unable to meet the challenge. Lack of support from senior management is hindering many companies' ESG ambitions, and it can be difficult to calculate the carbon or social impact of each link in a supply chain, which further hinders change.

 

As a result, there is an increasing need for outside knowledge with an emphasis on ESG. According to a recent survey by the research and advisory firm Verdantix, corporate spending on ESG Consulting and sustainability consultancy is expected to reach a record $16 billion over the next five years.

"Over the next five years, businesses will need to reorient themselves around ESG Reporting and Sustainability priorities," according to Kim Knickle, director of Verdantix Research. This is a challenging situation that will occur amid a fast changing regulatory environment. As a result, consultancies stand to gain as businesses seek outside expertise to assist them in implementing transformative change and meeting stricter reporting criteria.

The market will expand at a CAGR of 17% annually until 2027, according to the experts. By then, the market will have increased in size by a total of 156% from what it was in 2021, going from $6.24 billion to approximately $10 billion. All regions and sectors will benefit from the combination of GDP growth, policy development, regulatory change, and stakeholder pressure.

ESG considerations will also be incorporated increasingly into investing and M&A decision-making. In the banking industry, for example, where banks with extremely good ESG ratings have higher net interest income and net fee and commission income than their rivals, ESG Meaning investment is already being considered as a future driver of development. These developments will likely cause the market to have surpassed $7 billion by 2022.

Looking ahead, Verdantix discovered that EMEA will experience the fastest growth in ESG consulting initially, followed closely by North America and APAC. All ESG and sustainability consulting services are anticipated to expand by double digits during the forecasted timeframe, while corporate reporting and disclosures will have the largest gains with a CAGR of 21%.



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