By: Dianne Crocker, LightBox research director and Alan Agadoni, senior VP, LightBox EDR
As the first quarter of 2025 nears its close, environmental consultants are navigating an increasingly complex landscape. While optimism had been building late last year following anticipated interest rate cuts and the resolution of a contentious election, a new wave of uncertainty is emerging. Shifting federal policies under the Trump administration—ranging from regulatory changes to trade and tax policies—are raising fresh concerns about business confidence and investment decisions. The economic outlook remains uncertain, requiring firms to stay agile and proactive. Below, we examine five key business and technical factors shaping environmental markets in 2025.
TREND 1. Eye on Strategy as the Market Shifts From ‘Slow’ to ‘Go’
Business opportunities, particularly in segments of our industry that are driven by commercial real estate sales and lending, have been subdued since the record highs of early 2022 when the Federal Reserve began to hike interest rates. As the market engines begin to build momentum, 2025 could mark an important pivot point for the market, and environmental professionals are adopting myriad strategies to position themselves for growth. Among them:
- Increasing client outreach. Consulting is above all a relationship-driven business. That means you’ve got to actively cultivate meaningful relationships with a great deal of personal outreach by being there for your clients, touching base periodically and bringing value to your communications.
- Finding the bright spots. Actively identify environmental markets that are gaining momentum right now, including M&A, renewable energy, PFAS assessments, climate risk management, and energy efficiency.
TREND 2. The Winds of Change Bring AI from Hype to Real-World.
No matter where you look, you see articles about artificial intelligence, a technology credited with heralding the ‘Dawn of the 4th Industrial Revolution.’ Advances in large language models (LLM) like ChatGPT have brought AI into the spotlight across all segments of the business world. While these innovations can be intimidating, jumping in early and leveraging them is critical. As Anat Baron, futurist keynote at our 2024 PRISM conference in Dallas said, “The AI revolution is giving us the biggest shift in how we work in over 100 years. We all now have something powerful at our fingertips that can help us all do our jobs better.”
What was once time-consuming and labor-intensive is now faster and more efficient. 2025 will be the year that AI moves from hype to actual day-to-day work applications. It’s up to companies to determine the uses that make the most strategic sense for their staff. The smart companies are learning how to harness AI to enable their employees to let go of mundane, tedious tasks and free up resources for more rewarding work. In the environmental industry, AI will play a significant role in enabling the analysis of vast amounts of data (e.g., geological and soils data, property records or building permits) and to transform our business by streamlining operations, increasing productivity, and improving quality.
TREND 3: PFAS Gains Traction as a Top Environmental Concern and Challenge
In just a few years, PFAS has become the largest driving factor in the assessment and remediation business and possibly, the least understood. One of the most impactful regulatory news stories last year was the U.S. EPA’s designation of perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as hazardous substances under CERCLA to compel those responsible for PFAS contamination to pay for cleanup. Along with other new and proposed federal and state regulations, the designation will increase scrutiny of properties for potential PFAS releases as the presence of these substances could result in strict liability for property owners regardless of whether they caused the contamination.
In commercial real estate transactions, the results of PFAS-related due diligence could impact negotiations, property values, and the allocation of potential liabilities. Properties with PFAS contamination may also see an impact on financing options, stigma and development costs. The evolving regulatory landscape could also lead to additional obligations at existing cleanup sites and even the reopening of sites previously closed. Leading environmental consulting firms are already establishing expertise in PFAS and building market share with federal, industrial, and municipal clients, and investing in technologies that offer PFAS solutions.
TREND 4: Climate Risk Management and Building Resilience Will Grow in Urgency.
Climate considerations are being driven to the forefront because we’re seeing both increased regulation and the higher frequency and severity of what were previously viewed as low-probability events. In January, catastrophic wildfires swept across Los Angeles destroying homes and businesses across of a growing swath of that metro area. The rising frequency of extreme weather events and adverse impacts on commercial properties, especially in wildfire- and flood-prone regions, are making climate risk harder to ignore.
With each passing year, climate risk is being more widely viewed as a financial risk for lenders, investors, businesses and other property owners. The good news is that technology has allowed for the evolution of climate risk data from difficult-to-consume formats that required specialized expertise to more easily digestible datasets tied directly to at-risk property assets. As industry interest and awareness increases, new protocols are coming into being. ASTM just finalized a Property Resiliency Assessment standard to outline a way for environmental professionals to assist lenders and investors in assessing physical risks like wildfires, sea level rise, severe storm and other risks at the property level as part of standard environmental due diligence. These developments allow for a more accurate and rapid understanding of how potential climate-related hazards could impact any given property today, and in the future.
TREND 5: Energy-Efficiency is Becoming a Mainstream Consideration.
In response to a mix of drivers from regulation to rising operating costs, interest in the energy performance of commercial buildings is opening myriad growth opportunities for environmental consultants. In response to market demand, a growing number of environmental professionals are adding building energy assessments to their toolboxes.
A key driver is the host of energy disclosure laws—not to mention mounting concern over rising energy costs and recognition in the real estate sector that energy-efficient buildings are better investments. More and more building owners, CRE investors, tenants and lenders are incorporating so-called green building considerations into their pre-transaction due diligence and as they do, consultants are relying on procedures like ASTM’s Standard Practice for Building Energy Performance Assessment to calculate a building’s energy consumption and operating costs as a matter of disclosure to interested parties like lenders, prospective purchasers or tenants. Consultants are also actively performing energy audits to help owners and building managers review how a building’s energy is used for the purpose of identifying energy conservation measures.
Closing Thoughts
Growth is back on everyone’s radar screens in 2025. To give your company a competitive edge, you can’t go wrong putting clients first and making sure you’re focusing on the strongest areas of opportunity. Although market and political uncertainties are challenging business forecasts, there are concrete steps firms can take now to position themselves for growth this year.
NOTE TO READERS
This blog is an excerpt from the Inside the Industry column authored by Dianne Crocker, LightBox’s research director, and Alan Agadoni, senior VP, LightBox EDR published monthly by the Air & Waste Management Association in its EM magazine. The column covers a mix of timely business, strategic, and technical topics impacting the world of environmental management.
The full article appears in the March 2025 issue of EM Magazine, a copyrighted publication of the Air & Waste Management Association (www.awma.org), and is accessible in its entirety here in the full-issue PDF that can be downloaded and printed, or via AWMA’s online, interactive EM flipbook.
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