ESG & Sustainability Consulting Services Market Size [2031]

Report Description

ESG & Sustainability Consulting Services Market Outlook

The Global ESG & Sustainability Consulting Services Market was valued at USD 7889.1 million in 2022 and is projected to reach USD 30760.8 million by 2031, expanding at a CAGR of 16.5% during the forecast period.

ESG (Environmental, Social, and Governance) and sustainability consulting services are crucial in assisting organizations to integrate responsible and sustainable practices into their operations. ESG refers to a set of criteria and parameters used to evaluate a company's performance in terms of environmental impact, social responsibility, and corporate governance.

Get Free Sample Report

Conversely, sustainability focuses on achieving present needs without compromising the ability of future generations to meet their own needs. ESG and sustainability consulting services help businesses navigate these complex areas and develop strategies that align with sustainable practices.

ESG consulting services comprise assessing an organization's ESG performance and providing guidance on how to improve it. This includes evaluating environmental factors such as energy efficiency, waste management, and carbon footprint as well as social factors such as labor practices, employee diversity, and community engagement.

ESG & Sustainability Consulting Services Market Dynamics

Market Driver- Increasing Awareness About Climate Issues

Increasing concerns related to climatic changes have raised the urgency of the global commitment to climate transitions. The corporate sector is encouraged to reconsider its business practices, as a result of concerns regarding sustainability and climate changes.

High levels of environmental pollution are caused by a number of sources, including emissions from manufacturing facilities and the unfavorable impacts of toxic emissions from chemical and pharmaceutical firms. Thus, driving the need for professional advising services that are outsourced.

Businesses require ESG & sustainability companies to offer advice to the firm based on the industry in the company. Inputs on efficient energy usage, managing water & waste, and sustainable use of land are considered for sustainability.

ESG investing, in particular, is the process of incorporating environmental, social, and governance (ESG) factors into asset allocation and risk decisions to produce sustainable, and long-term financial returns. Thus, to deliver clients with financial returns, support sustainability, and climate-related goals, and align with societal values.

ESG investing has become a leading form of sustainable finance. The ESG rating companies and investment funds are progressive that include criteria related to environmental impact, reducing climate risk, and expanding the procedure of innovation, goods, and renewable energy sources in commercial operations.

Market Driver- Growing Number of Technological Advancements

Rising number of investments demands increasing sustainability and quality standards by policymakers, investors, and other key stakeholders. Ethical business practice in a holistic manner is highly demanded by investors. The ESG standards determine or evaluate the company’s performance while sustainability encompasses the responsible business practice.

Various businesses are seeking to align its portfolios with sustainable and responsible practices, considering the potential risks and opportunities for the business that are associated with environmental and social issues. In order to build a sustainable and inclusive economy, the ESG is propelled by technological advancements and innovations that enable companies to address environmental and social challenges.

Technologies involved in renewable energy, energy efficiency, clean technology, and sustainable agriculture are fueling the market. These technologies play a crucial role in advancing ESG practices. They enable the efficient collection of data, storage, and analysis of large volumes of data related to the ESG factor.

The data includes vital information on energy consumption, greenhouse gas emissions, water usage, supply chain practices, and more. By leveraging advanced data analytics, and machine learning algorithms, companies gain valuable insights to identify areas of improvement and make data-driven decisions. Moreover, with technology, sustainable supply chains enhance transparency and traceability.

Market Restraint- Lack of standardization

The absence of uniform reporting standards of ESG and sustainability metrics hampers the market. This makes it challenging for investors and stakeholders to assess and compare ESG performance. Varying methodologies and disclosure practices lead to difficulties and consistency in measuring and benchmarking ESG performances.

Investment decisions based on information that is neither comprehensive nor comparable between companies do not provide accurate information. Additionally, the International Valuation Standards Council (IVSC) highlighted the issues caused by the lack of a standardized system.

Market Opportunity- Rising Innovation & Development

Transition to a sustainable and responsible economy requires innovative solutions. The ESG presents opportunities for companies to develop and commercialize new technologies, products, and services address environmental and social aspects. This includes examples such as energy efficiency, renewable energy, and waste management.

Moreover, growing investments and interest in ESG are creating opportunities for new investment. For example, the Middle East and North African (MENA) is a key producer of fossil-based energy production center and offers opportunities to embrace sustainability as a part of a broader effort to develop new sectors. This includes huge transformational shifts, such as the large-scale adoption of low-carbon oil and gas, renewables, solar and hydrogen power.

The region is vulnerable to climatic changes as a result of the high scarcity of water resources, high aridity, and coastlines threatened by rising sea levels. According to the data published by UNICEF, MENA is one of the most freshwater-scarce regions in the world. Moreover, the region is located in one of the highest exposed sunlight areas.

The setup of power plants in these regions can produce twice the energy than any other similar country in Europe. In order to act as a strategic partner for regional solar enterprises, in 2021, the Energy Transition Accelerator Financing (ETAF) Platform obtained USD 400 Mn in anchor money from the Abu Dhabi Fund for Development.

Scope of ESG & Sustainability Consulting Services Market Report

The report on the Global ESG & Sustainability Consulting Services Market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

ESG & Sustainability Consulting Services Market Segmental Outlook

The Global ESG & Sustainability Consulting Services Market is segmented on the basis of service type, industry vertical, and region.

Based on service type, the global ESG & sustainability consulting services market is segmented into strategy and design, implementation, reporting & assurance, and due diligence and investment analysis. The strategy and design segment is expected to dominate the market in 2022 owing to its ability to navigate complex landscapes of environmental, social, and governance considerations while achieving its sustainability goals.

Get Free Sample Report

On the basis of industry vertical, the ESG & sustainability consulting services market is segmented into IT, BFSI, energy & resources, healthcare, manufacturing, pharmaceutical & biotech, food & beverage, and others.

The energy & resources segment is expected to hold a substantial share of the market during the forecast due to optimizing energy efficiency, transitioning to renewable sources, managing resource consumption, and ensuring responsible practices across the value chain that foster long-term sustainability and resilience.

Regional Outlook

Based on regions, the ESG & Sustainability Consulting Services market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The market in the North America market is growing in the region, owing Increasing focus on climate change mitigation and renewable energy transition, presence of large institutional investors with ESG mandates, and growing demand for sustainable investing options is driving the market in the region. 

Get Free Sample Report

Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the global ESG & sustainability consulting services market

• Historical, Current, and Projected Market Size in terms of Value and Volume

• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered

• Industry Drivers, Restraints, and Opportunities Covered in the Study

• Recent Industry Trends and Developments

• Competitive Landscape & Strategies of Key Players

• Neutral Perspective on global ESG & sustainability consulting services market