KBS - Testing, Inspection, Certification & Compliance - Market Insight

CURRENT LANDSCAPE Several key trends have shaped the UK M&A market in the TICC sector in recent years. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG):

The stringent regulations imposed by governments worldwide, and the increasing public awareness of environmental concerns, are a significant market trend - with environmental consultancy, certification and compliance services being sought after by both private equity and trade buyers. For example, UK-based health, safety and ESG risk management provider Alcumus acquired Planet Mark, a sustainability certification provider. BUILDINGS HEALTH AND SAFETY: TICC services relating to buildings health and safety is a subsector experiencing substantial growth, with transactions such as Sagard’s acquisition of ACCEO. BRAND IMAGE: Firms have recognised the importance TICC plays in ensuring longevity, maintaining a strong brand image and instilling trust into its customers. Quality testing, inspection and certification build consumer trust and loyalty. Moreover, as firms wish to showcase their ESG, meet regulations and avoid accusations of greenwashing, TICC will play a pivotal role. VARIED REGIONAL LANDSCAPE: Geopolitical instability in the Middle East has created risks for energy security and wholesale markets. The EU is heavily investing in renewables, grid modernisation and energy storage as it aims to minimise dependency on external energy sources and gain energy security. India has set targets to decarbonise energy to 50% and achieve 500GW of fossil-fuel-free generating capacity by 2030. However, in the US, with the election of President Donald Trump, it has been predicted there may be a shift away from environmentally friendly solutions, with investments in natural gas infrastructure and fossil generation assets. Renewable energy is still expected to continue to benefit from long-term support despite short-term uncertainties. COMPLIANCE: Rising rates of air pollution are detrimental to our health. WHO research concluded almost the entire global population (99%) breathes in air that exceeds air quality limits. Public and governmental pressures from growing environmental safety concerns have contributed to the development of the environmental compliance market. Moreover, innovation is driving force for growth, e.g. the Daily Screening System is an AI tool that scans millions of documents daily, identifying ESG-related risks and detecting incidents across industries. Other tools include remote sensing, data management systems and geographic information systems (GIS). For example, RepRisk, a Switzerland-based ESG data science company, launched a Due Diligence Scores solution in 2024 with the aim of offering disaggregated ESG scores, contributing to a focused compliance approach.