As Indian companies increasingly prioritize environmentally sustainable practices, there has been a notable surge in the demand for sustainability consulting services. According to Mollshree Garg, the India managing partner at ERM (Environment Resources Management), a global sustainability consultancy, the country’s sustainability consultancy market was valued at $255 million by the end of 2023, with the potential for double-digit annual growth in the coming years.
ERM projects that India’s sustainability consultancy market will grow at a Compound Annual Growth Rate (CAGR) of 7.5% from 2021 to 2030, but Garg believes that the actual growth rate could exceed these projections. She cites a 30-35% increase in companies’ budgets for sustainability-related initiatives over the past five years, indicating a robust demand for sustainability consulting services.
Key players in sectors such as energy, finance, healthcare, manufacturing, and pharmaceuticals are driving the demand for sustainability-related consultancy services in India, according to data assessed by ERM. Companies like JSW Steel, Hindalco, and the Adani Group have made significant investments in green initiatives, reflecting a broader trend towards environmental stewardship among Indian businesses.
While sustainability and Environmental, Social, and Governance (ESG) considerations were previously linked primarily to Corporate Social Responsibility (CSR), Garg notes that this perception has evolved. Factors such as increasing awareness of environmental and social issues, regulatory requirements, and pressure from investors and consumers have propelled sustainability to the forefront of corporate agendas.
Looking ahead, Garg anticipates that services such as supply-chain management, sustainable investing, and climate risk assessment will drive the demand for sustainability consulting services by 2030. Companies like Mercedes-Benz, Tata Steel, Dabur, Amazon, and Tech Mahindra are already leading the way in adopting green practices, including green transport for last-mile distribution and supply-chain operations.
However, despite the growing emphasis on sustainability, India still lags behind global trends in consumer demand for environmentally friendly products. Garg highlights the need for government intervention to incentivize the adoption of greener production methods and stimulate demand for green products in India’s underdeveloped market segments.
As sustainability becomes increasingly intertwined with business strategy, consulting firms like ERM are playing a crucial role in guiding companies towards more sustainable practices. With its expertise in advising regulatory authorities and shaping environmental policies, ERM is poised to support India’s transition towards a greener future.
