Formatted Title
Evolution of the U.S. Environmental Consulting Industry from 1980 to the Present
Background/Objectives
The environmental consulting industry is comprised of thousands of firms ranging in size from single practitioners advising in niche areas to huge international firms capable of performing all technical aspects of engineering work around the globe. The industry has evolved over time, starting in the 1970s as environmental regulations were promulgated, and expanding dramatically in the 1980s as additional regulatory requirements were implemented. Initially, established architecture and engineering (A/E) firms rose to the challenge by realigning environmental engineering talent to address this new technical arena. Universities rapidly retooled to meet the demand, offering environmental engineering, environmental science and hydrogeology degrees. By the year 2000, environmental firms were performing an estimated USD$6.1 billion in gross revenue. That strong growth has continued to where according to engineering news record (ENR) industry rankings issued in July 2023, the top 200 firms performed USD$138 billion in revenue in 2022. The share of that Top 200 revenue represented by the six large firms evaluated herein was about 19 percent in 2022. Over the past 30 years, mergers and acquisitions (M&A) have played a significant role in growing firms, allowing them to tackle bigger and more complex challenges, across broader geographies, and greater numbers of sites. This poster will visually lay out a synopsis of the growth of some of the largest environmental consulting firms (as of 2023), including their historical M&A activity that got them into those top spots.
Approach/Activities
Inexplicably, Jacobs staff have been collecting data on M&A activity in the environmental consulting arena since the early 1990s. Additionally, Environmental Business International and the Engineering News Record have been tracking much broader industry activity even longer. These data were reviewed, confirmed where possible through web resources, and graphically presented to track the growth of the top environmental firms. The selection of the “top” firms was determined based primarily on the Engineering News Record rankings issued in July 2023 for firms identified as “consulting” or “design” firms. The decision to address only the top firms was difficult because many interesting firms were omitted in this process, such as TRC Companies, which has acquired almost 50 small firms since its founding 50 years ago. But, as will be seen in the poster, the complexity of the task of tracking more firms would have rendered this project impracticable. Our apologies to those firms that did not make the arbitrary cut.
Results/Lessons Learned
The data were compiled to provide interesting information for professionals in the industry, both those new to environmental consulting and those more seasoned veterans. The “mature” industry members will appreciate how far the industry has come from “the good old days” and will reminisce and wax poetic about long-forgotten firms of their past. Young professionals new to the industry may gain an appreciation of the constantly changing landscape of companies that have come and gone, making the present industry as complex and robust as it is, and suggesting that the only constant in our industry is change. The environmental consulting industry is made up of large powerful A/E firms, robust mid-sized firms and literally thousands of small firms. The M&A activity has been vigorous over the past 30 years, with dozens of firms being subsumed by each other in a constantly evolving arms race for dominance in a lucrative business arena. Whether you work for a two-person shop doing gas station and dry cleaner work or one of the “mega-firms” performing billions of dollars of work annually across 100’s of facilities worldwide, you will enjoy seeing a visual representation of the history of the firms that dominate the industry.