Interview with: PRISM Advisory Board Member, Grant Ferrier, President and Founder of Environmental Business International, Inc.
Top-of-mind for environmental due diligence consultants these days—in addition to market uncertainty—are the rapid pace of ChatGPT applications, the growing urgency of climate risk management, and competitive pressures to keep pace with advances in technology. Principal Analyst Dianne Crocker connected with leading strategist Grant Ferrier about the AI revolution – which could really be “the fourth Industrial Revolution”, new demand for services related to climate risk, and technology adoption as a strategic focus.
One of the biggest challenges in today’s business world is adjusting to the rapid pace of technological advancement, and environmental consulting is no exception. How important do you think technology is for consultants in maintaining a competitive edge?
Grant Ferrier: I have been analyzing the environmental consulting industry for nearly four decades and I can safely say that knowledge and perspective on technology have always been critical differentiators. Whether a firm is a service provider or a technology developer, a consultant, or a contractor, staying at the forefront of technology development and implementation is a key element in environmental industry competitiveness. The technology revolution of the 21st century is about Information Technology, and that revolution continues to be in full gear, if not accelerating. From the mainframe to the personal computer to the smartphone and the interconnection of devices, and from data sharing to the cloud to computational models and artificial intelligence, the pace of change has been persistent—and an underlying challenge of advancing any business. In virtually every segment of our industry, forward-thinking firms are leveraging technology to advance their ability to satisfy client needs and optimize their own business operations.
In my recent conversations with environmental consultants, AI and ChatGPT always come up. Last fall, you conducted EBJ’s Survey of Disruptive Technologies. What did the results tell you about the early applications of AI and ChatGPT, and where do think the consulting world will land in terms of adoption?
Ferrier: Our 2023 survey of disruptive technologies revealed that artificial intelligence and machine learning (AI/ML) were rated by survey respondents as the most influential technologies in the 2020s—and by a considerable margin. It’s hard to underestimate the potential of AI across all industries. Some would say we’re at a tipping point. Others would say we are in the fourth Industrial Revolution. Regardless of the label, it’s clear to me that we’re at a critical point where technology is testing and crossing the boundaries of human intelligence. But whether AI can access and harness the right critical mass of data drawn from focused and accurate sources enough to develop and offer true perspective remains to be seen in the consulting world. And the limits to which AI can deliver in the short-term will constantly be tested and will likely require human intervention.
The extent that large language models and platforms like ChatGPT and other forms of ‘generative AI’ can produce usable reports, permit applications, planning documents, impact statements,— and eventually software code, engineering designs, diagrams, and other graphic documents pertinent to specific projects, and what level of human oversight is required to usher them to completion, will be a central competitive factor to the environmental industry for the remainder of the 2020s.
From your perch, you advise leaders of some of the largest environmental consulting firms in the U.S. on strategies to drive growth in today’s challenging market. The growing awareness of, and attention to, climate risk is opening a range of new avenues of opportunity. Where are you seeing as the strongest potential for growth with firms that have robust technical expertise related to climate risk management?
Ferrier: Climate risk management is still at relatively early stages from a business advisory, monitoring and measuring standpoint. Many consultants would admit that assessing climate risk is still more of an art than a science but is certainly moving more towards the latter. Part of the evolution is the maturity of data derived from climate models and other long range forecasting platforms. We can only speculate, but the consensus is the models are increasingly more reliable, and in the end, planning for climate risk cannot be too dependent on a weather forecast. However, a first step in climate risk assessment and advisory proficiency is access to and integration of what the practitioner deems as the best climate models for the region of focus. And then many technology modelers are limiting their AI applications to access only the finite sets of data of their choice.
Ultimately, climate risk assessment revolves around the assets or infrastructure in question. The early movers across the adaptation planning and climate action plan market have been states and municipalities, many using federal grants for funding. In the corporate world, clients in the developer, private equity or investment sectors all have a great deal at stake regarding the future of climate risk to whatever asset, property, or company is in their crosshairs. Recent SEC guidelines, which require disclosure of climate risk and annual greenhouse gas emissions, have underscored the ongoing pressure from the investment community. This pressure is particularly evident among public companies but is also affecting both private and public sectors due to the expanding influence of the ESG movement.
What this means is that not only do public companies have to be transparent about what they believe their current exposure is to climate change broadly, and extreme climate events specifically, but they likely have to rely on experts to not only do the work to set this benchmark, but also to monitor and measure it on an ongoing basis. So, the companies with the best capabilities, pertinent experience, existing reports, and climate models in their data system, along with ongoing tracking of climate data and related will have a competitive advantage in the future.
Join us at the 2024 LightBox PRISM Conference in Dallas, TX from May 13-15, where we’ll explore the industry’s timeliest topics, including lender risk management in today’s volatile CRE market. Learn more about PRISM 2024 >
ABOUT GRANT FERRIER
Grant Ferrier, President and Founder of Environmental Business International, Inc., a research and publishing company serving the environmental industry. Grant is the well-known editor of the Environmental Business Journal, launched in 1988, and the Climate Change Business Journal that was launched in 2008. EBI also publishes a series of comprehensive market research reports on all 14 segments of the environmental industry and conducts proprietary market research and management consulting projects for private companies and government agencies. Grant represents the interests of the environmental industry in many government and business forums. He has testified before three U.S. Congressional Subcommittees and has served on advisory committees for the OECD, the U.S. EPA and the U.S. Dept. of Commerce.
