The environmental due diligence sector continues to experience remarkable transformation, driven by technological advancements and evolving market demands. As a leading provider of Technical Report Management (TRM) solutions, our platform has facilitated the production of over one million reports, including hundreds of thousands of environmental assessments across thousands of users and more than one hundred customers. This unique vantage point provides us with unparalleled access to industry data, offering a comprehensive view of market dynamics from 2022 through the first half of 2024.
Our analysis draws on this extensive dataset, spanning a diverse range of firms and report types across the environmental assessment industry. This wealth of information allows us to identify key trends, growth patterns, and emerging practices that are shaping the future of environmental due diligence.
Robust Market Growth
Analysis of industry-wide data reveals growth in the environmental assessment market over the three-year period, particularly for ESA Phase I – ASTM reports. Projecting the 2024 data based on first-half performance indicates a three-year report growth rate of 8.23% from 2022 to 2024 for ESA Phase I – ASTM reports.
The comparison between the first half of 2023 and the first half of 2024 shows a remarkable year-over-year growth of 13.16% for ESA Phase I ASTM reports. This acceleration in growth demonstrates the industry’s resilience and adaptability in meeting evolving market needs.
Growth Across Company Size Cohorts
The ESA Phase I – ASTM report market demonstrates resilience and adaptability across most firm size categories. While the three-year view from 2022 to 2024 shows relatively stable performance for many cohorts, with some experiencing modest growth and others maintaining steady volumes, the first half of 2024 signals a notable resurgence in the industry. This recent uptick suggests a positive shift in market dynamics and renewed demand for environmental due diligence services. As firms look to meet this increasing demand, technology will play a crucial role in enhancing efficiency and scalability.
| Firm Size Category | Three-Year Growth (2022-2024) | H1 2023 to H1 2024 Growth |
| Small firms (<20 employees) | -2.56% | -9.39% |
| Mid-size firms (20-99 employees) | 8.32% | 9.06% |
| Large firms (100-499 employees) | 2.20% | 7.17% |
| Very large firms (500-999 employees) | 34.69% | 38.39% |
| Enterprise-level firms (1000+ employees) | -0.22% | 7.02% |
Particularly encouraging is the strong year-over-year growth observed in the first half of 2024 across nearly all firm sizes. Mid-size, large, and enterprise-level companies are all showing healthy increases, with very large firms experiencing exceptional growth. This broad-based expansion indicates a robust recovery and points to increasing opportunities in the environmental assessment sector. The overall trend suggests that firms have successfully navigated recent challenges and are well-positioned to capitalize on growing market demand. To sustain this growth trajectory, investment in advanced technological solutions will be key, enabling firms to streamline processes, improve report quality, and meet the evolving needs of their clients in an increasingly competitive landscape.
Technology-Driven Efficiency: A Spotlight on ESA Phase I Edit Times
One of the most notable trends in the environmental assessment industry is the relative stability in efficiency, particularly for ESA Phase I ASTM reports. Despite significant volume increases, average edit times have remained fairly consistent:
- 2022: Average edit time of 5.761 hours for ESA Phase I ASTM
- 2023: Average edit time of 5.958 hours (a 3.42% increase)
- 2024 (first half): Average edit time of 5.843 hours (a 1.93% decrease from 2023)
This three-year trend demonstrates the industry’s ability to maintain efficiency levels while handling substantially higher volumes.
Even more impressive are the results achieved by firms in the top decile of performance. These high-performing companies, which have fully embraced purpose-built technology solutions, are setting new standards for efficiency in ESA Phase I reporting:
- The top 10% of firms maintained an average edit time of just 4.15 hours for ESA Phase I ASTM reports in H1 2024, outperforming the industry average by 29.0%.
- Among these top performers, the average improvement in edit times from 2022 to H1 2024 was 9.2%, significantly better than the industry-wide trend.
One standout example of this trend demonstrated remarkable improvements in both volume and efficiency for ESA Phase I ASTM reports:
- In 2023, the firm produced 7,873 ESA Phase I ASTM reports with an average edit time of 5.70 hours.
- In the first half of 2024, they produced 5,120 ESA Phase I ASTM reports with an average edit time of 5.57 hours.
- Projecting the first half of 2024 data to a full year, the firm is on track to produce approximately 10,240 ESA Phase I ASTM reports in 2024, representing a 30% increase in volume from 2023.
- Simultaneously, they reduced average edit time by 2.3%, from 5.70 hours to 5.57 hours – approximately 4.7% better than the industry average.
This real-world example highlights the transformative impact of purpose-built software solutions in the ESA Phase I assessment industry. Companies leveraging these advanced tools for ESA Phase I ASTM reports benefit from standardized templates, streamlined workflows, improved collaboration tools, and advanced analytics.
This firm’s ability to substantially increase their ESA Phase I ASTM report volume while simultaneously reducing edit times demonstrates that with the right tools and processes, environmental assessment firms can scale their operations without compromising on quality or efficiency in this critical area of environmental due diligence. This case study serves as a benchmark for the industry, illustrating the potential for significant productivity gains in ESA Phase I reporting when leveraging advanced technology and optimized processes.
Contractor Contributions: An Additional Lever for Growth
In addition to technology, the industry has been significantly bolstered by the increased engagement and productivity of contractors. This collaborative model has emerged as a crucial strategy for firms to meet growing demand while maintaining flexibility and expertise.
Data through the first half of 2024 reveals impressive contractor activity on the platform across all technical report types in support of customer activity:
- Increased Contractor Engagement: The number of unique contractors involved in report generation increased by 6.8% compared to the same period in 2023, rising from 1,140 to 1,218.
- Growth in Report Volume: These contractors generated or contributed to 70.4% more reports year-over-year, from H1 2023 to H1 2024.
- Improved Productivity: The average reports per contractor saw a significant increase of 59.5%, rising from 16.29 in H1 2023 to 25.98 in H1 2024.
These figures demonstrate that contractors are not only more engaged but are also significantly more productive, playing a crucial role in meeting the industry’s growing demand. The contractor model offers several advantages, including scalability, access to specialized expertise, cost-effectiveness, and flexibility. When combined with purpose-built software platforms, this model allows firms to maintain consistent quality standards while rapidly adapting to market changes and client needs.
Diversification of Services
While ESA Phase I – ASTM reports remain the industry cornerstone, the market is seeing exciting diversification in assessment types:
- Desktop Reviews: Despite a slight decline in the three-year trend, these efficient preliminary screening tools are seeing an uptick of 7.30% from 2023 to 2024 (projected).
- Preliminary screenings, such as desktop reviews and RSRAs, are growing, indicating a shift towards tiered assessment approaches. This trend allows for more efficient resource allocation based on initial risk profiles.
- Records Search with Risk Assessments (RSRAs): These assessments are showing a significant increase of 10.31% from H1 2023 to H1 2024.
- Environmental Transaction Screens: After a dip in 2023, this category has rebounded strongly, with a 16% increase projected from 2023 to 2024.
This diversification indicates a more nuanced approach to environmental due diligence, with professionals tailoring assessments to specific project needs and risk profiles, ultimately providing more value to clients.
Additionally, a number of emerging trends have surfaced which highlight evolving client needs and risk management approaches in the environmental industry:
- ESA Phase II reports are gaining importance, with a projected three-year growth rate of 110.21% and a substantial 37.82% increase from H1 2023 to H1 2024.
- Specialized assessments for lending programs show the industry’s adaptability:
- Both Fannie Mae ESA Phase I assessments and Freddie Mac ESA Phase I reports remained consistent over the three year period.
- ESA Phase I – HUD/NEPA have experienced growth of 46.23% during H1 2024 as compared to H1 2023, reflecting growing activity in HUD-related and NEPA-compliant assessments.
These emerging trends reflect the industry’s responsiveness to changing market demands and regulatory landscapes. As environmental due diligence becomes increasingly nuanced, firms that can offer a diverse range of assessment types while maintaining efficiency and quality will be well-positioned to capture market share and meet evolving client needs.
Seasonal Trends and Market Dynamics
Analysis of monthly data reveals interesting seasonal patterns in the environmental assessment industry, particularly for ESA Phase I – ASTM reports:
Mid-year Peak (Q2 and Q3):
The industry consistently experiences a surge in activity during the middle of the year. In 2022, the average monthly reports in Q2-Q3 were a substantial 13.8% higher than the annual monthly average. This trend continued in 2023, albeit less pronounced, with Q2-Q3 at 4.5% above the annual monthly average. This mid-year peak likely aligns with increased real estate transaction activity during these months.
Year-end Slowdown (Q4):
A slight deceleration in report volume is typically observed towards the year’s end. In 2022, the Q4 average dipped to 4.8% below the annual average. Interestingly, 2023 showed a shift in this pattern, with the Q4 average slightly exceeding the annual average, suggesting a more sustained level of activity through the year’s close.
New Year Ramp-up (Q1):
The beginning of the year often shows a gradual increase in activity, possibly reflecting new budget cycles and renewed business focus. In 2023, Q1 started slowly with at 7.5% below the annual average. However, 2024 demonstrated a remarkably strong start, with Q1 jumping 21.8% from Q1 2023, indicating growing market momentum.
These patterns provide valuable insights for both environmental firms and their clients in planning resources and anticipating market demands throughout the year. The data suggests that firms should be prepared for increased activity in the middle of the year, while also remaining adaptable to changing year-end and new year trends.
Technology Adoption and Company Performance
The data suggests a strong correlation between technology adoption and company performance:
- Firms leveraging technology often show more consistent edit times across report types.
- Companies with diverse report offerings tend to maintain steadier overall volumes, possibly due to the flexibility afforded by robust technological infrastructure.
- Larger firms appear to benefit significantly from technology, maintaining high volumes with stable edit times, likely due to their ability to invest and utilize advanced systems.
This underscores the importance of technology investment as a key factor in maintaining competitiveness and efficiency in the environmental assessment market.
Looking Ahead
The environmental assessment market is experiencing a period of dynamic growth and positive transformation. The industry has demonstrated remarkable adaptability, efficiently meeting increased demand while maintaining high-quality standards. The diversification of services, adoption of specialized assessment types, and leveraging of both advanced technology and contractor collaborations show a sector that is innovating to meet evolving client needs.
The stability in edit times despite significant volume increases is a testament to the industry’s successful leveraging of technological advancements and flexible workforce models. Companies utilizing advanced platforms and engaging effectively with contractors are at the forefront of this efficiency revolution, showing consistent performance improvements across different report types and volumes.
As the industry continues its upward trajectory, firms that invest in and fully utilize purpose-built software solutions will not only improve their current operations but will position themselves for future success in an increasingly competitive and demanding market landscape. As regulations evolve and environmental concerns become increasingly central to real estate transactions, the ability to provide high-quality reports quickly and consistently will be a key differentiator in the market.
The environmental assessment industry stands at the forefront of technological innovation and collaborative models in professional services. By embracing these advancements and partnerships, the sector is not only enhancing its own capabilities but also contributing to more informed, sustainable, and responsible real estate practices. As we look to the future, it’s clear that the combination of technology and flexible workforce solutions will continue to play a pivotal role in shaping the landscape of environmental due diligence, driving efficiency, accuracy, and insight in this critical field.
