AECOM Looks to Expand Environmental Related Construction

The company is consistently ranked in the Fortune 500 put out by Forbes.

Source : Wikipedia

May 19, 2024

Author : Patty Allen

AECOM, which is considered one of the globally leading infrastructure consulting firms has an impressive repertoire of projects. They are part of big-ticket projects in the US like the Fredrick Douglas Tunnel Program.

With climate concerns becoming more profound by the day, with more frequent and devastating wildfires, hurricanes, droughts, and floods, the construction giant is beginning to turn toward environmentally minded construction.

One of the latest offerings among the numerous services that is offered by AECOM is ESG (Environmental Social and Corporate Governance) services.

As part of their ESG initiatives, AECOM is offering:

  1. Climate resilience and adaptation
  2. ESG advisory
  3. Indigenous engagement
  4. Nature-based solutions
  5. Net zero and decarbonization
  6. Renewables and energy transition
  7. Social value, equity, and environmental justice
  8. Sustainability and Circular Economy

So, is this just a change of heart, or is it driven by financial strategies?

Research has shown that the global green building market was valued at US$ 516.66 billion in 2023. This sector is projected to grow at a CAGR of 9.42% and is estimated to be valued at US$ 1267.71 billion by 2033.

In the recently released second-quarter earnings, CEO of this Dallas-based company, Troy Rudd explained that the company would be taking on more climate adaptation and cleanup projects.

They are also shifting their focus on project management work, which currently contributes 15% of their net service revenue. But, the management is working to make it 50% of their total income.

Rudd explains that due to the recent bout of federal funding, and a host of internationally-funded megaprojects, which has been juxtaposed by increasing labor shortage, demands for strategic advisory and technical services.

The second-quarter financial report has shown that revenue has increased 13% to $3.9 billion, and operating income increased 2% to $200 million. Meanwhile, the net service revenue increased by 8%, driven by the Water, Transportation and Environment end markets, where AECOM is ranked #1 by ENR.

Their slew of financial positives is set to increase because they have already bagged two big-ticket wins recently.

On May 13th, Texas DOT (TxDOT) announced that AECOM had been selected to undertake project inspection services for the construction of drainage tunnels for the $4.5 billion Capital Express (CapEx) Central project in Austin.

AECOM, in its joint venture with Stantec, was awarded a five-year environmental planning program with the Naval Facilities Engineering Systems Command (NAVFAC) Pacific.

The JV will be offering environmental planning services in the Pacific region. This is one of the biggest projects for the company as it is an indefinite-delivery, indefinite quantity (IDIQ) contract with a $99 million ceiling project.

The company is tasked to prepare, review, research, and update Navy and Marine Corps documentation to support their National Environmental Policy Act (NEPA) compliance. The project will also include studies on environmental impact, land use, and facilities.

This JV is also ticking all the boxes on diversity hiring, thanks to its team of skilled contractors hailing from diverse backgrounds.

“Reflecting our commitment to delivering Sustainable Legacies, we’re excited to partner with Stantec to support this work that is poised to have a significant positive impact on environmental planning strategy for the Navy,” explained Frank Sweet, chief executive of AECOM’s global Environment business.

Back in 2023, AECOM partnered with Environmental Management and Planning Solutions, Inc. (EMPSi). With the addition of the EMPSi team, the combined U.S. West Environmental Planning and Permitting (EPP) team will be best positioned to benefit from AECOM's unrivaled technical expertise and innovations. 

Appropriations for the U.S. Department of the Interior, Bureau of Land Management, and Bureau of Reclamation are all expected to rise significantly in the future years, presenting a tremendous development opportunity for the collective team.

Category : Investment in Infrastructure Market Watch

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