Market conditions are better as 2013 nears its end. Not great, but definitely better. Business opportunities are expanding in the property assessment arena in a way that the market has not seen since the start of the downturn. Growth in many of the markets that drive demand for Phase I environmental site assessments is gaining traction. Institutions are lending more capital for property purchases. The number of active investors with capital earmarked for commercial real estate is growing. The metros where they are shopping around for promising properties is expanding beyond just the safest ones. The scope of property investment in many ways is broader than it has been in five years. The good news is that growth is happening, albeit slowly. The bad news is that competition for new projects will continue to be cut-throat.
How can companies navigate the landscape of today’s market environment? For starters, they can do everything in their power to differentiate themselves as the technical experts that they are. Now is the time to start thinking about the winning strategies that will make 2014 a year of growth at your firm–client education should be one of them. Debra Andrews, Founder and CEO of Marketri, is a widely-respected expert on strategic marketing. Many of her clients are in the architecture-engineering-consulting sector. In her comments at EDR’s May 2013 client summit, Andrews shared why she thinks the due diligence industry is ripe for client education
Take E 1527-13
The most significant news in the environmental due diligence industry this year is the release of the new ASTM E 1527-13 standard. The revisions have been in the works for years. The standard is referenced in thousands of environmental due diligence policies across the country. Yet many clients do not have environmental expertise in-house and are not members of the ASTM Phase I ESA Task Group. They look to their environmental consultants to keep them up to speed. This is a golden opportunity to educate.
Leading up to, and immediately following, the November 6th publication date of E 1527-13, a steady stream of client alerts from national environmental due diligence firms were hitting email IN boxes. While the alerts differ in scope, tone and interpretation, what they all have in common is that they:
- make clients aware of the new standard;
- educate them on key areas of change;
- alert them to the timing of the transition; and
- assure them that the authoring firm’s staff is up to speed on the new standard of care and ready to make a seamless transition away from -05 to -13.
Firms that came out in front proactively educating on E 1527-13 read like a “who’s who” of the top firms in the industry: Partner Engineering, EBI, PM Environmental, IVI, AEI, EMG and Terracon–just to name a few.
The need for education is a strong one.
Consider this finding: EDR Insight surveyed risk managers at lending institutions to gauge awareness about the upcoming changes to the Phase I ESA standard. Only 12 percent even knew the standard was being updated. Another 25 percent were aware, but could not name the areas of change. A significant 63 percent did not know anything about it.
While the industry awaits the final amendment to the AAI rule from the U.S. EPA recognizing ASTM E 1527 as AAI-compliant, it is a great time to craft your own alert to educate clients.
In addition to covering the key areas of change (i.e., vapor migration risk, agency file reviews, and CREC-HREC determinations), there are other angles to take on E 1527-13. For instance:
A refresher on areas of the Phase I, such as user responsibilities, that may not have received much attention since E 1527-05 was published
A focus on the fundamentals of environmental due diligence
Examples of instances when an environmental risk was overlooked and created problems for the lender/buyer/investor
Next steps for managing or mitigating environmental risks identified in a Phase I ESA
Other Opportunities to Educate
Outside of the new ASTM standard, there are myriad topics for environmental firms looking to build a strategy for educating existing clients or carving out a place for themselves in front of new clients sectors. Here are a few for consideration:
- The new OCC guidance (August 2013), including a detailed section on the 18 elements that should be in every institution’s environmental policy
- The U.S. EPA released draft vapor intrusion guidance this year (the first update since 2002) that is a great handbook for understanding vapor risk—and educating clients about how to make decisions about managing VI risk and avoiding liability.
- Real-world examples and reminders of why environmental due diligence is critical
- High-visibility project work at your firm
- The new SBA SOP 50 10 5(f) effective January 1, 2014
- Environmental due diligence pitfalls and how they can be avoided
- A new state regulation or guidance document
At a time when so much attention is paid to competing with low-quality or low-cost firms, it is critical for having resources in your strategic playbook dedicated to standing out from the competition and demonstrating your technical expertise. If you are skeptical about how receptive your clients will be to it, consider a comment made by Mike Tartanella at Capital One at our Due Diligence at Dawn last week:
“I love it when our approved consultants give us articles or white papers on new environmental risk topics.”
He loves it. The vast majority of the lending sector knows nothing about the new Phase I ESA standard. This is an opportunity to get one step closer to being a trusted expert and shining brighter than the next firm.
The need for education exists, especially with small community banks that do not have environmental experts on staff. Competition demands that firms do everything in their toolbox to stand out and differentiate. The top firms in the industry are already harnessing energy to get their names out there.
Remember: A sound approach to content can help create authenticity and authority, which in turn lead to trust, and ultimately, new business.