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January 21, 2025
Our latest Global Business Voice explores the primary non-audit, accountancy-related ESG services that small—to medium-sized accountancy firms can offer their SME clients, focusing on practical, strategic, and impactful services that go beyond regulatory compliance.
As Environmental, Social, and Governance (ESG) considerations increasingly shape business landscapes, small and medium-sized enterprises (SMEs) are beginning to recognise the importance of integrating
ESG practices into their operations.
While much of the focus around ESG has been on compliance with regulatory standards, such as the EU’s Corporate Sustainability Reporting Directive (CSRD), a wealth of opportunities exist beyond mere compliance. This shift presents an ideal moment for small—to medium-sized accountancy firms to expand their service offerings and establish themselves as essential partners in their SME clients’ ESG journeys.
Take Action
| Create an ESG team of key stakeholders within your business. Set some practical objectives to identify the issues and timelines relevant to your client base and local regulatory environment. |
| Analyse your client base to identify those clients who are subject directly to CSRD (or its equivalent outside of the EU) and, perhaps even more importantly, those clients that are part of a larger supply chain which is likely to have near-term CSRD reporting implications for your client. |
| Devise a client communication plan, so when competitors get in touch (as they inevitably will) your clients know that you are on top of these issues |
| Have your ESG team brainstorm the commercial opportunities and threats, and create an outline business plan for consideration by your senior stakeholders. |
| Check out the AGN Global Business Voice ‘ESG Part I – Reducing Risks and Identifying Opportunities’ – which contains a detailed guide and checklist for establishing a firmwide ESG strategy. |
| Also, read the AGN Global Business Voice ‘ESG Part II: Engaging Your Team to Drive ESG’ – which contains details of a ‘free to workshop structure and materials to use when engaging staff in developing ESG strategy for the office. |
Phased Approach
This paper is a basic ‘heads-up’ – clearly carbon impact reporting, sustainability consulting and the broader spectrum of ESG service opportunities is a big field, but having said that, the table below will help you think about your own firm’s starting point. Start by considering three basic phases:
Phase 1
Start to build an awareness of how ESG is likely to impact your client base, and consequently the
challenges they will face. Take a sector approach as some will be impacted more than others. Begin discussions with your colleagues about your firm’s response, and consider internal awareness training on the likely issues.
Phase 2
Firms that have rapidly advanced in the ESG area have sometimes done so by joint venturing with
other specialist suppliers and ESG consultants. This has led to immediate cover for existing client requirement but also expanded the firms internal knowledge and cognisance of what they can supply themselves.
Phase 3
Armed with greater knowledge, consider the services you might develop in-house in the medium and longer terms, and create a plan. What are the profitable sectors, service areas and thus resource requirements? What’s the go-to market plan? What’s the training plan?
The table below highlights some information sources that are largely English language and centred
on major western commercial and professional bodies– but they are a starting point, and regional
variations will exist.
ESG Strategy and Business Integration Consulting
Why It Matters to Clients
ESG is more than a compliance
checkbox; it is a strategic approach that can drive long-term value.
SMEs are increasingly looking to align their business operations with sustainable practices.
An ESG strategy tailored
to the unique needs of an SME can improve market positioning, enhance brand reputation, and lead to cost savings through resource efficiency.
Your Advisory Role
Accountants can assist SMEs in
identifying relevant ESG factors
that impact their business. This
involves understanding the
client’s industry, stakeholder
expectations, and long-term goals.
Firms can then help develop a
comprehensive ESG strategy that
integrates these factors into the
business model. This includes
setting realistic goals, establishing
key performance indicators
(KPIs), and creating a roadmap for
implementation.
Sources
Sources of Information: Industry reports from organisations like the World Economic Forum (WEF) and
the United Nations Global Compact. Publications from the
Global Reporting Initiative (GRI) and the Sustainability
Accounting Standards Board (SASB). Research papers
from leading business schools such as Harvard Business
School and INSEAD.
Online Training: Courses from Coursera and edX on ESG
strategies and sustainable business practices. Webinars
and workshops hosted by the United Nations Global
Compact.
ICAEW Training: ICAEW’s “Corporate Sustainability
Reporting and Assurance” course.
Specialised webinars and events focused on ESG strategy
integration for accountants.
ACCA Training: ACCA’s “Sustainability Reporting” course,
which covers ESG strategy and reporting. ACCA’s global
conference sessions on integrating ESG into business
strategy.
Other Sources for Knowledge: Books like “The
Sustainability Handbook” by William R. Blackburn.
Membership in sustainability-focused networks such as the
Sustainability Accounting Standards Board (SASB) and the
Climate Disclosure Standards Board (CDSB).
Sustainability Measurement and Reporting
Why It Matters to Clients
Transparent communication about
ESG initiatives can build trust with
stakeholders, including customers,
investors, and employees. As stakeholders increasingly demand
accountability and transparency,
SMEs need to report on their ESG
performance effectively.
Your Advisory Role
Accountants can guide SMEs in
preparing sustainability reports
that align with recognised
frameworks such as the Global
Reporting Initiative (GRI) or
the Sustainability Accounting
Standards Board (SASB). These
reports should highlight the
SME’s commitment to ESG goals,
progress made, and future
plans.
Accountancy firms can
also help craft ESG narratives
for use in marketing materials,
investor relations, and internal
communications, ensuring
consistency and clarity.
Sources
Sources of Information: Reporting frameworks from
GRI, SASB, and the Integrated Reporting Council (IIRC).
Guides from the Task Force on Climate-related Financial
Disclosures (TCFD).
Online Training: GRI Academy offers courses specifically
on GRI Standards and sustainability reporting. LinkedIn
Learning courses on corporate sustainability reporting.
ICAEW Training: ICAEW’s “Sustainability Reporting and
Assurance” webinar series. Workshops on integrated
reporting and sustainability communication.
ACCA Training: ACCA’s “Certificate in Sustainability
Reporting” covers key aspects of ESG reporting. Seminars
on effective ESG communication strategies.
Other Sources for Knowledge: Sustainability reporting
guidelines from the Carbon Trust and CDP (formerly the
Carbon Disclosure Project). Industry-specific ESG reporting
guides from trade associations and NGOs.
Carbon Footprint Analysis and Reduction Planning
Why It Matters to Clients
With growing concerns about climate change, carbon footprint reduction is a critical component of ESG for many businesses. SMEs need to understand their carbon emissions and identify ways to reduce them, which can also
lead to cost savings and efficiency
gains.
Your Advisory Role
Accountants can perform detailed
carbon footprint analyses for their
SME clients, assessing emissions
from various sources, including
energy use, transportation, and
supply chain activities. Based on
this analysis, they can develop
actionable plans for reducing
carbon emissions, such as energy
efficiency measures, sustainable
sourcing, and waste reduction
strategies. Firms can also help
SMEs track progress over time and adjust their strategies as needed.
Sources
Sources of Information: Greenhouse Gas Protocol
standards and methodologies. Reports and tools from the Carbon Trust and the International Energy Agency (IEA).
Online Training: Coursera’s “Carbon Accounting and
Management” course. Carbon Trust’s webinars and online
tools for carbon footprinting.
ICAEW Training: ICAEW’s “Climate Change and Carbon Reporting” course. Training sessions on environmental reporting and carbon reduction.
ACCA Training: ACCA’s “Carbon Management” certificate course. Workshops on managing and reporting greenhouse gas emissions.
Other Sources for Knowledge: Resources from the Science Based Targets initiative (SBTi) for setting emissions reduction targets. Books like “Carbon Footprinting: A
Practical Guide” by Ian Jackson.
Supply Chain Sustainability Assessment
Why It Matters to Clients
The sustainability of an SME’s supply chain can significantly impact its overall ESG profile. Clients, investors, and regulators are increasingly scrutinising supply chains for ethical sourcing, labour practices, and environmental impact.
Your Advisory Role
Accountancy firms can help SMEs
evaluate their supply chains for
ESG risks and opportunities. This
includes assessing suppliers’
ESG practices, identifying high risk areas, and recommending
alternative suppliers or practices
that align better with ESG
standards. Firms can also assist
in developing supplier codes
of conduct and implementing
monitoring systems to ensure
compliance with these standards.
Sources
Sources of Information: Reports from the Sustainable Supply Chain Initiative (SSCI) and the Ethical Trading Initiative (ETI). Industry standards from organisations such
as ISO 20400 on sustainable procurement.
Online Training: LinkedIn Learning courses on sustainable
supply chain management. Online workshops from the Supply Chain Sustainability School.
ICAEW Training: ICAEW’s webinars on ethical sourcing and
supply chain risk management. Training modules on the integration of ESG into supply chain management.
ACCA Training: ACCA’s sessions on supply chain sustainability and ethical sourcing practices. Case studies and practical guidance on sustainable supply chain management.
Other Sources for Knowledge: Books like ”The Sustainable Supply Chain” by Mandy Cormack and “Greening the Supply Chain” by Joseph Sarkis. Resources from the Chartered Institute of Procurement & Supply (CIPS).
ESG Risk Management and Scenario Planning
Why It Matters to Clients
ESG risks, such as environmental disasters, social unrest, or governance failures, can have severe impacts on businesses. SMEs need to proactively manage these risks to ensure business continuity and protect their
reputation.
Your Advisory Role
Accountants can assist SMEs in
identifying potential ESG risks
specific to their business and
industry. This involves conducting
risk assessments and developing
risk management frameworks.
Firms can also help SMEs conduct
scenario planning exercises to
understand the potential impacts
of different ESG-related events
and develop strategies to mitigate
these risks.
Sources
Sources of Information: Risk management frameworks
from COSO and ISO 31000. Publications from the World
Resources Institute (WRI) and the United Nations Environment Programme (UNEP).
Online Training: Coursera’s “Enterprise Risk Management”
course, with ESG risk modules. Webinars from the Risk Management Society (RIMS) on integrating ESG into risk
management.
ICAEW Training: ICAEW’s “Risk Management and the Role
of Accountants” course. Specialised training on ESG risk
assessment and scenario planning.
ACCA Training: ACCA’s risk management courses with
ESG-specific content. Seminars on ESG-related risk identification and mitigation.
Other Sources for Knowledge: Books such as “Sustainable Risk Management: A Guide to ESG Integration for Risk Professionals”. Case studies and white papers from consulting firms like Deloitte and PwC on ESG risk management.
ESG Corporate Finance and Green Financing, Grants, etc.
Why It Matters to Clients
Access to finance is critical for the
growth and sustainability of SMEs.
Green finance options, such as green loans and sustainability-linked bonds, offer SMEs an opportunity to fund their ESG initiatives while potentially benefiting from lower interest rates.
Your Advisory Role
Accountants can assist SMEs in
understanding and accessing green finance options. This includes advising on the eligibility criteria for green finance, helping prepare the necessary documentation, and aligning the SME’s financial practices with the requirements of green finance providers.
Firms can also guide on how to use green finance effectively to achieve their
ESG goals.
Sources
Sources of Information: Reports from the Climate Bonds Initiative and the Green Finance Institute. Guidelines from the International Capital Market Association (ICMA) on green bonds.
Online Training: Online courses on green finance and investment from the United Nations Environment Programme Finance Initiative (UNEP FI). MOOCs on
sustainable finance from edX and Coursera.
ICAEW Training: ICAEW’s “Finance for Sustainability” course. Webinars on green finance instruments and market developments.
ACCA Training: ACCA’s “Certificate in Climate and Green Finance”. Workshops on sustainable finance and investment.
Other Sources for Knowledge: Books like “Green Finance
and Sustainability: Environmentally-Aware Business
Models and Technologies”. Resources and guidelines from
the Principles for Responsible Investment (PRI).
Governance Aspects of ESG
Why It Matters to Clients
Good governance is critical for ensuring that an SME operates
ethically, transparently, and in
compliance with applicable laws
and regulations.
Strong governance practices can help SMEs build trust with investors, customers, and other stakeholders, reduce risks, and
ensure long-term business success.
Your Advisory Role
- Assisting in the development of governance policies and procedures.
- Advising on the establishment of internal controls and risk
management practices. - Providing training and support for board members and management on governance best practices.
- Conducting governance
audits to identify areas for
improvement and ensure
compliance with governance
standards.
Sources
Sources of Information: OECD Guidelines on Corporate Governance: Offers comprehensive guidelines on
establishing effective governance frameworks. IFC Corporate Governance Resources: Provides tools and resources for improving governance practices within
organisations. The Institute of Directors (IoD): Publishes best practices, guidelines, and frameworks for corporate
governance.
Online Training: LinkedIn Learning: Courses on corporate
governance fundamentals, board responsibilities, and governance best practices. Harvard Business School Online: Offers courses on leadership and corporate governance, focusing on ethical decision-making and governance frameworks.
ICAEW Training: ICAEW’s “Corporate Governance for
Accountants” Course: Covers essential governance practices, roles of the board, and how to integrate ESG into governance frameworks. Webinars on Ethical Governance: Focused on implementing ethical governance practices and the role of accountants in promoting good governance.
ACCA Training: ACCA’s “Governance, Risk and Ethics”
Module: Part of the ACCA qualification, focusing on the
principles of governance and ethical decision-making. Seminars on ESG Governance: Focus on the role of governance in ESG and practical approaches for SMEs.
Other Sources for Knowledge: Books like “Corporate Governance and Accountability” by Jill Solomon, which provides insights into the theories and practices of
corporate governance. Resources from the International Corporate Governance Network (ICGN): Offers best practices, principles, and frameworks for improving
corporate governance globally.
Conclusion
The growing importance of ESG presents a significant opportunity for small to medium-sized accountancy firms to expand their service offerings and become trusted advisors to their SME clients. By focusing on strategic, non-audit ESG services such as strategy development, sustainability reporting, carbon footprint analysis, supply chain assessment, risk management, training, and green finance advisory, accountancy firms can help SMEs navigate the complexities of ESG while driving long-term value.
As the business environment continues to evolve, accountancy firms that proactively offer these services
will not only differentiate themselves in the market, but also play a vital role in shaping a sustainable future for their clients.
As ever, AGN members are at different stages of the ESG journey – some are very advanced, and it’s likely
that we have a member who is able to provide friendly and independent advice to you or your clients.
On top of this, AGN is increasingly galvanising a support strategy in this space. Your AGN Regional
Director can point you towards relevant share groups or specialists.
Click here to download the AGN GBV ESG Part III
Other AGN support material:
- AGN GBV ESG – Reducing Risks and Identifying Opportunities
- AGN GBV ESG Part II: Engaging Your Team to Drive ESG Strategy
- AGN GBV ESG for Private Equities and Their Portfolio Companies
- Member article: Navigating Growth – Strategies for Sustainable Growth
- Member article: ESG and Corporate Purpose – Conflict or Convergence?
- Member article: Implementing Sustainability in Professional Services Firms
For further information on this topic or anything relating to the AGN International Association of Accounting and Advisory Firms or to become an AGN member, please email your closest AGN Regional Director (see below) or go directly to www.agn.org.
Malcolm Ward
CEO AGN International
mward@agn.org
Jean Xu
AP Regional Manager
jxu@agn.org
Marlijn Lawson
EMEA Regional Director
mlawson@agn.org
Cindy Frey CPA, CGMA
Americas Regional Director
cfrey@agn.org
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