US E&S consulting market hits record growth, but there’s a bumpy ride ahead

The US E&S consulting market surged to $22.3bn in 2023, marking a 20% year-on-year increase and almost triple earlier forecasts. This performance reflects shifts in policy, investment, and corporate behaviour that redefined how sustainability is embedded across the country.

Post-pandemic, pent-up demand for E&S services aligned with unprecedented federal investment via the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA). These landmark policies unlocked billions of dollars in funding for large-scale decarbonisation, water, energy, and infrastructure projects.

At the same time, ESG reporting moved from a voluntary effort to a business expectation, driven by investor pressure and client demand. These factors enabled the US top 27 consultancies reviewed in Environment Analyst’s market assessment to maintain double-digit growth since 2020. Collectively they account for almost 75% of the total US market.

The growth also highlights how traditional architecture, engineering, and construction (AEC) firms shifted to embedding sustainability into their core services (the ‘Great Reshuffle’ effect). These companies repositioned themselves to lead clients by example, integrating environmental performance into conventional engineering work. In 2023, E&S revenues at AEC firms accounted for almost a third (32%) of group totals, up from 19% in 2019.

As a result, large multidisciplinary firms have expanded revenues at twice the pace of pure-play E&S specialists and three times that of mid-sized multidisciplinary firms. Scale and service integration are now key differentiators.

M&A consolidation

The market assessment, which is due to be published in May, notes that consolidation among consultancies intensified, with Tetra Tech, AECOM, WSP, Stantec, and TRC Companies emerging as the ‘Big Five’, and accounting for 43% of the total US market.

This trend reflects not only competitive acquisitions but also a shift toward firms that can deliver comprehensive, end-to-end sustainability solutions. Further, private investors increasingly see the E&S consulting sector as a solid long-term investment proposition and are backing M&A deals in the sector.

2023 saw a subtle pivot toward lower-risk, compliance-driven services. Previously high-growth areas such as climate change, energy transition, and ESG were outpaced in growth by more traditional segments, including contaminated land, water services, and environment, health & safety (EHS), with the latter growing by 26% – the highest growth – that year.

As the 2024 US election approached and the economy contended with persistent high inflation and interest rates, political and economic risk was rising.

However, based on the growth of the past few years, E&S consultancies remained cautiously optimistic as the administration changed hands. Reporting through 2024, and even at the beginning of 2025, when we spoke to them for our Insight Report US market optimistic for 2025, despite political uncertainty, company leaders noted a high backlog of work, and that aging infrastructure and the energy transition would keep future project pipelines strong.

Now the future is less certain.

With the Trump administration rolling back environmental regulations, reducing federal funding, and imposing protectionist tariffs to encourage onshore investment, consultancies are seeing delayed or cancelled projects and constrained investment. While there may be increased demand for E&S consultancy work if manufacturers do onshore, the greater concern is the state of the economy.

That said, states like California, New York, and even Texas are pushing back against federal rollbacks, sustaining momentum in their local green economies. This emerging patchwork of state-level policy divergence will create both risk and opportunity for E&S firms navigating the US landscape, the market assessment notes.

Forecast market growth

While the market is forecast to increase another 16% in 2024, longer-term projections are more tempered. Our model predicts the sector to grow at 5.5% CAGR, reaching a $29.2bn market size by 2028. There is a high likelihood of fluctuating annual growth rates, with some years forecast to grow a mere 2.5%, depending on the political, economic and regulatory environment.

Continuing unknowns include the fate of tariffs, the direction of mid-term elections, and whether the private sector and investor support will continue to prioritise sustainability as a resilience strategy.

Looking ahead, business leaders see digital transformation as the key growth driver. Conversely, workforce and skills shortages, long seen as a pressing constraint, are now being overtaken by broader concerns around economic headwinds, and federal policy and funding.

Nonetheless, the sector will need an additional 22,000 professionals by 2028 to meet its projected size of $29.2 bn.

The year of 2023 stands out as a pivotal year, marking how far the E&S consulting market has come, but the years ahead are expected to be volatile. Consultants should brace themselves for continued uncertainty in the coming years.