North America and Europe still dominate sustainability demand

Demand is soaring for sustainability services. We expect approximately 240%, 190%, and 210% growth over revenues, headcounts, and client numbers, respectively, over the next two years—driven by hiring, acquiring, and internal repositioning and upskilling.

Together, the 18 leading firms across the consulting, technology, and business services sector currently account for more than $13 billion annually, 68,000 employees, and 22,000 clients dedicated to sustainability services. Consider pure management consultants, technology and platform giants, engineering powerhouses, and services firms outside the leading 18, and we’d estimate a $50 billion and growing sustainability services market. Some we speak to estimate more. See our full market analysis for more, and separate sustainability services ecosystem map.

Sustainability services clients are split globally: of the 22,000+ considered in our market analysis, 41% are in North America, 34% in Europe, 18% in Asia Pacific, 4% in the Middle East and Africa, and 3% in Latin America.

• North America and Europe have seen more advanced sustainability regulations for some time (despite still lagging behind where the global sustainability context demands… and COP27, the latest UN climate summit, did not change that). The EU Green Taxonomy and broader disclosure rules, the US’ SEC reporting requirements, and the UK’s upcoming transition plan mandate, are three of many examples.
• The Asia-Pacific region is catching up through business and political spheres: clients we speak to outline APAC’s view for business value in sustainability, not only regulation-driven requirements. On the policy front, India’s plans for hydrogen and renewables, or Indonesia’s recent G20 deal to transition from coal, are two of the broad-ranging dynamics unfolding.
• Politics globally is also boosting demand (despite the fact that policy and the public cannot move at the speed and systems level sustainability demands–meaning clarity for businesses that they hold the last levers): Brazil and Australia’s recent elections of more climate friendly governments, for example.
• In the Middle East and Africa, COP27 seems to have had little impact from being hosted in Egypt. Maybe next year in the UAE will change that but I wouldn’t hold your breath. See our separate take on COP27. There is activity across MEA driven by business desire to move regardless of regulation; we need a critical mass to swiftly set best practice and do so in global collaborations. Politically, there are signs that the last few decades of fossil fuels are leading certain governments to try and ensure social sustainability through an energy transition.

The Bottom Line: North America and Europe made head starts on sustainability. But to discount any market or country would be foolish.

Latin America is set to play a major metals and reforestation role—not least with new more climate friendly governments in place alongside the ongoing energy transition. Australia is seeing mining firms recognize they’re about to lose their licenses to operate if they don’t change. Indonesia and Vietnam are (slowly, but more quickly than before) ditching coal. Increasingly Africa’s businesses are looking to avoid the mistakes of others, regardless of politics. There’s a massive global context at play.

Explore the HFS Pulse Dashboard

Take a look at the breadth of data in our Pulse Dashboard, which showcases data about current and future demand trends for technology and business services and related emerging technologies. See more here.