Our operating performance | Environment and Climate Solutions Market context Research from market intelligence specialist environment analyst estimates that the total global market for environmental consulting increased by 7.4% to reach a total of over US$40bn in 2022. This growing market requires both technical and management consulting expertise to understand risk, evaluate opportunity and communicate effective narratives to stakeholders. Multiple factors continue to support strong interest in our environmental and climate-based professional services. These include the need to address climate change through decarbonisation and the need to mitigate against more extreme weather conditions. By driving up energy prices and highlighting the need for energy security, the war in Ukraine has added fresh additional impetus to investment in renewable energy. Services that can help organisations address governmental priorities, meet societal expectations around environmental quality, drive corporate behavioural change and provide purpose-driven outcomes for customers are particularly in demand, both now and in the foreseeable future. In our North American markets, expectations around the US Securities and Exchange Commission’s (SEC) proposed rule changes on climate-related disclosures have prompted As business, industry and governments face greater public scrutiny on environmental issues, we provide the expertise that they need to measure, monitor and manage environmental risks. companies to plan for eventual reporting requirements. Additionally, findings from COP 27 (the annual global climate change conference) have spurred governments into action, including investment from the Biden and Trudeau administrations into carbon reduction and adaptation initiatives. Lastly, Canada’s National Adaptation Strategy (NAS) was released in December 2022, laying out the federal strategy for climate risk treatment and the various responsibilities in government. Local governments, who manage approximately 60% of Canadian infrastructure, have continued to evaluate the impacts of climate change, and are implementing standardised approaches to risk treatment. Our main market presence in the environment and climate sector is in Australia, extending into the adjacent Pacific market. Market conditions for environmental consulting over the past year in Australia have generally been favourable but competition remains strong from both larger engineering firms and small operators. While COP 27, held in Egypt, garnered less headlines than COP 26 held in the UK, it nonetheless signalled a shift from plans to action and a consequent focus on the details of implementation. As such, it continues to act as a spur for climate-related investment and interest. Following in the footsteps of legislation in New Zealand to make climate risk disclosure mandatory, many Asia Pacific government and share/stock exchanges are now also moving towards the introduction of mandatory climate risk disclosure. All disclosures will need to be supported by technical climate risk assessments across decarbonisation and physical risk. Opportunities include our technical knowledge of coastal, defence and energy infrastructure and systems, and our ability to evaluate their exposure to climate risk. Performance The growth of the environmental consulting market means that it has attracted new players within the broader ESG sphere, making environment and climate a highly competitive market during the reporting period. Within the UK, we continued to deliver our niche environmental services across the oil and gas sector (predominantly supporting customers in the North Sea with environmental permitting), floodplain management and broader sustainability services as part of defence and other UK government contracts. Opportunities to apply this expertise to a broader subset of marine industries to support the transition to a low-carbon economy were explored. The flood mapping and modelling market remained stable, although much of the investment continues to be driven by large framework contracts through the UK central government, which we can only access through larger partners. In Australia, our technical expertise is well known and is held in high regard, especially in states such as Queensland, New South Wales, Western Australia and Victoria, where our flood modelling, coastal engineering, aquatic ecology management, climate risk and environmental approvals for infrastructure projects were all in demand. Overall, climate related work in Australia during the reporting period was steady, with a healthy BMT Group | A platform for growth 20
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