M&A: Ernst & Young (EY) Acquires Denkstatt for Sustainability, ESG and CSRD Consulting Services

Ernst & Young (EY) has acquired Denkstatt, a sustainability and ESG consulting firm that serves customers in Austria and across Europe. Financial terms of the deal were not disclosed.

This is M&A deal number 200 that Sustainable Tech Partner has covered so far in 2024. See all M&A deals involving sustainability, climate tech and green IT services listed here.

Denkstatt was founded in 1993 in Austria. The company's consulting expertise spans the environment, sustainability, energy, health, safety and mobility. Key focus areas include CSRD (Corporate Sustainability Reporting Directive) and European taxonomy, sustainability assessments, circular economy and sustainable finance, as well as climate and ESG strategies. Denkstatt's business essentially merges with the EY Sustainability business.

EY has offered sustainability services for almost 20 years, the buyer notes. Among the existing and expanding relationships to keep in mind:

• October 2023: EY expanded its technology and sustainability partnerships with cloud and enterprise software providers Microsoft and SAP, respectively, in late 2023.
• March 2023: EY and IBM partnered to assist customers with sustainability strategies in such carbon-heavy industries as civil infrastructure, telecom, energy, mobility and manufacturing.

EY Acquires Denkstatt for ESG, Sustainability Consulting: Executive Perspectives

In a prepared statement about the M&A deal, Nikolay Garnev, country managing partner and south cluster leader of EY Bulgaria, said: “By joining a leading consultancy on sustainability issues, we are expanding our consultancy portfolio and significantly improving our competence and capacity in sustainability services. Our common goal is to contribute as much as possible to the sustainable development of companies, and thus to society as a whole. In this configuration, we can address our customers’ problems individually and help them in every respect by providing comprehensive and specialized sustainability solutions for every industry. Together we create even stronger positive impact and added value for our clients, employees and the economy as a whole, which is in harmony with our purpose at EY to build a better working world."

Added Boyan Rashev, partner at EY Denkstatt: “We are not afraid to look far and wide. Together with EY, we expect a larger scale of companies that will use our knowledge and skills worldwide. We want EY Denkstatt to support its clients – both companies and institutions – so that the path to a green future makes them stronger and more successful."

Concluded Klimentina Rasheva, partner at EY Denkstatt: “The acquisition of Denkstatt is a compliment for us. We started with two people and created the niche for sustainable business services in Bulgaria. Today we have a team comparable to many more developed European countries, and we are confident enough to compete with global companies. We believe that the combination of international presence and EY’s experience will allow us to develop this capital."

EY: Sustainability Acquisitions, Competition, Consulting Market Growth

The global EY company has M&A experience in the sustainability sector. For instance:

• May 2023: EY South Africa acquired EBS Advisory in May 2023. That deal boosted EY's expertise across mergers and acquisitions, sustainability and ESG advisory services in Africa.
• February 2023: EY acquired Attalea Partners, a provider of ESG consulting services to private equity funds and investee companies.

Key rivals such as Accenture, Capgemini, Deloitte, KPMG and PwC each offer various green IT consulting, custom software and associated managed services.

Why all the competition? The simple answer involves strong, growing customer demand.

For instance, global spending on sustainability business services will reach $65 billion in 2027, up from $37.7 billion in 2023, according to an IDC market forecast. That's a 14.9% CAGR (compound annual growth rate) during the forecast period, IDC said.

Moreover, the green technology and sustainability market is expected to reach $51.09 billion by 2029, up from $13.76 billion in 2022, according to Fortune Business Insights. That’s a compound annual growth rate (CAGR) of 20.6%.