Our latest AGN Global Business Voice – Business Bulletin ESG Two Point Zero? What the Global Reset Means for Mid-Market Firms we examine the global reset, compare developments across jurisdictions, and unpack what it means for mid-market firms — across talent, technology, and evolving services.
Audio bite.
Across the world, sustainability reporting is being refashioned. The EU’s Omnibus Simplification Package may be the political headline, but it signals a deeper global shift: away from maximalism and towards proportionality, interoperability and pragmatism.
ESG hasn’t stopped but is delayed in maturing. It remains a competitive opportunity, and for some an imperative, as well as a vehicle which addresses important areas to be developed within the business. For AGN member firms, this creates a crucial advisory moment. Mid-market companies — often under-resourced, but internationally connected — now need clarity, prioritisation and practical roadmaps.
This GBV Business Bulletin summarises the new direction of travel, compares what’s happening in key jurisdictions, and outlines the opportunities for member firms across AGN’s Member Agenda, highlighting how it might impact talent, technology and service evolution.
On the move?
Tune into our mini podcast on Spotify at the end of this article for a quick summary of the key insights.
1. Immediate actions highlighted by this paper
- Identify client exposure via supply chains, investors, exchanges, and convert this into a proportionate, commercially grounded ESG roadmap.
- Implement simple, scalable ESG data capture processes that work across regimes and integrate with core finance systems.
- Use ESG readiness reviews, light assurance, and data-quality checks to surface gaps and reduce future assurance risk.
- Educate boards and CFOs. Deliver focused briefings on ESG Reporting 2.0, clarifying market expectations and key differences between ISSB, CSRD, and US regimes.
- Position ESG as advisory. Embed ESG as an ongoing advisory service— strategy, systems, governance, and assurance—not a one-off reporting exercise.
2. Global Snapshot: Where ESG Reporting is Heading
Future Direction of ESG / Sustainability Disclosure: Major Jurisdictions at a Glance
| Region | Direction of Travel | Thresholds & Scope | Timing | Implications for Mid-Market Major Attack |
|---|---|---|---|---|
| EU (Omnibus) | Recalibration: narrowed CSRD scope, lighter due diligence, optional elements, fewer datapoints. | Larger companies (1,000+ employees) remain in scope; SMEs eased. | 2025–27 | Still high expectations if selling into EU supply chains. Clarity improves, burden reduces. |
| UK | Gradual alignment with International Sustainability Standards Board (ISSB); climate-first approach; caution on burden. | Initially voluntary UK Sustainability Reporting Standards (SRS); mandatory scope likely late-2020s. | 2025–26 rollout | Mid-sized listed and PE backed firms face growing investor pressure for ISSB style disclosures. |
| US (Federal) | Stalled: Securities and Exchange Commission (SEC) climate rule paused; political polarisation. | No new enforceable federal climate mandate. | Uncertain | Multinationals still need investor-led climate transparency. Avoid “ESG whiplash”. |
| US (California) | State level acceleration: mandatory emissions climate-risk for large companies. | Applies to large public/private companies “doing business in California”. | 2026–28 | Cross-border value chains need full emissions data. Indirect pressure on suppliers worldwide. |
| Canada / Latin America | Steady: ISSB-aligned regulation moving through securities regulators. | Listed and financial institutions first. | 2024–28 | SMEs feel pressure through banks and major customers. |
| Japan | Structured: mandatory ISSB aligned disclosure for large listed firms. | Top listed entities first; assurance required. | 2025–27 | Suppliers into Japanese value chains face data requests |
| Hong Kong / Singapore | Rapid: mandatory climate disclosure for listed issuers. | Listed and regulated entities. | 2024–27 | Mid-market firms raising capital must align with ISSB. |
| Australia / New Zealand | Firm shift: mandatory climate reporting phased in. | Large listed first; SMEs follow via market pressure. | 2025–27 | High demand for data readiness and internal controls. |
| India / EMDEs | Incremental: adoption of ISSB with transitional relief. | Largest listed and high impact sectors. | 2024–30 | Exporters face “trickle-down” obligations from global buyers. |
| Global Baseline (ISSB) | Convergence: increasingly adopted as global reference point. | Jurisdictions choose full or climate-only adoption. | Active | The de facto global language of climate disclosure. |
3. What This Means for Mid-Market Businesses Three
Three truths stand out:
“The New Sustainability Pragmatism” –
Dr. Lena Varga, ESG Regulation Specialist
1. ESG isn’t shrinking — it’s stabilising
Regulators are easing peripheral burdens, but the
core expectations remain. Mid-sized businesses must still demonstrate how they manage climate risks, dependencies and impacts.
2. The global baseline is consolidating
ISSB is becoming the reference point for investors and lenders everywhere. Even if a firm is not legally required to comply, capital and customers will expect ISSB-style data.
3. Mid-market firms need proportionate, practical
pathways
Unlike large multinationals, the mid-market cannot
build internal ESG departments. They need clarity on:
- What can wait without strategic risk
- What is commercially sensible
- What can wait without strategic risk
This is where AGN firms have a natural advisory advantage.
The global ESG landscape is undergoing its first major course correction. The EU’s Omnibus Package does not dismantle sustainability regulation — it matures it. Other jurisdictions are doing the same: refining scope, prioritising climate, and aligning with ISSB where politically feasible.
The big misconception is that ESG is being rolled back. In reality, expectations are becoming clearer, narrower and more comparable across borders. For mid-market firms, this may be the best outcome possible: fewer overlapping rules, but still strong pressure to disclose material climate risks, emissions data and transition plans. My advice to mid-sized firms is simple: don’t chase every disclosure trend. Instead:
- Anchor yourself in ISSB S1/S2.
- Build a small but robust data foundation.
- Prepare for proportionate assurance.
- Expect value chain data requests even if you’re
exempt.
If 2015–2024 was a period of regulatory expansion, then 2025–2030 will be an era of ESG discipline. Firms that get ahead now will find compliance easier, financing cheaper, and strategy clearer.
4. The Advisory Opportunity for AGN Firms (detail)
| Advisory Area | What Clients Need | How AGN Firms Can Help |
|---|---|---|
| A. Build ESG Roadmaps for the Mid-Market | – Understand regulatory exposure, including: – EU supply chain exposure – California nexus – Investor-driven disclosure | – Develop 3-year ESG roadmaps based on proportionality, commercial reality and sector relevance. |
| B. Design Practical ESG Data Systems | – Scalable ESG data tools – Ability to capture core metrics once for multiple regimes – Integration of emissions and risk data into finance systems – Preparation for future audit /assurance | – Select and implement mid-market appropriate ESG data platforms – Build consolidated data models – Integrate ESG data into accounting and ERP workflows. |
| C. Deliver ESG-Readiness & Light Assurance | – Credibility behind reported ESG data – Clarity on risks and data quality gaps – Supplier data checks for value chain reporting | – Provide limited assurance – Conduct readiness reviews – Perform internal control assessments – Offer supplier verification and data-quality |
| D. Educate Boards & Finance Leaders | – Clear understanding of “ESG Reporting 2.0” – Market expectations from investors, lenders and customers – Differences between ISSB, CSRD and California regimes – Insight into material topics investors really care about | – Run focused board education sessions – Provide tailored briefings on global reporting regimes – Deliver investor expectations workshops for CFOs and senior leadership. |
This positions AGN firms as strategic partners — not just compliance mechanics.
ESG Service Example 1:
ESG Data & Reporting Support
A mid-market manufacturer operating across multiple international markets was facing growing ESG pressure from customers requesting value chain emissions data.
The client lacked a consistent ESG data structure. Different stakeholders were asking for overlapping but non-identical ESG information, creating duplication, delay, and uncertainty over data credibility.
In this example, an AGN member might provide a practical ESG data and disclosure advisory service, specifically comprising:
- ESG data architecture and harmonisation — designing a single ESG data model that satisfies multiple regulatory and stakeholder requirements (EU value chain requests and ISSB-style disclosures).
- Emissions measurement and systems integration — implementing a proportionate emissions calculation approach embedded into existing finance/ERP systems, rather than standalone ESG software.
- ESG readiness and pre-assurance support —
producing a voluntary, “CSRD-lite” disclosure
to improve data discipline, credibility, and future assurance readiness. - Capital-markets ESG preparation — supporting management with climate disclosures suitable for investor, lender, or IPO-related discussions.
In short, the service sits at the intersection of ESG
strategy, data systems, and disclosure readiness,
positioned as an ongoing advisory capability rather than a one-off reporting exercise.
ESG Service Example 2:
ESG Readiness for Lenders and Investors
A mid-sized, privately owned manufacturing group is preparing for refinancing and facing increasing ESG scrutiny from its banks and investors.
Management have limited ESG data and no clear
framework for explaining climate risk or emissions
performance. There was concern that poor ESG visibility could delay refinancing or negatively affect terms.
In this example, an AGN member might provide a lender and investor-focused ESG readiness service, covering:
- Climate risk assessment and facilitation —helping management and investors understand and articulate how climate-related risks affect the business.
- Emissions baselining — establishing credible Scope 1 and 2 emissions data as a starting point for future reporting.
- Standards alignment — mapping current disclosures to emerging UK and international frameworks (e.g. ISSB) without full compliance reporting.
- Light assurance and credibility support — providing limited independent checks to give banks and investors confidence in the data.
- ESG roadmap development — setting out a practical, time-bound plan for future ESG improvements and reporting.
In simple terms, the service helps the client meet lender expectations, reduce financing risk, and prepare for future ESG requirements without over engineering compliance.
5. The Big 3: Why This Matters Strategically
1. Talent
ESG is one of the best development platforms for NextGen accountants — blending reporting, technology, internal controls and strategy.
Member firms should create ESG champion roles and cross-functional project teams.
2. Technology
ESG reporting cannot succeed without good systems. This is a natural expansion point for firms to advise on:
- ESG data platforms
- Workflow and evidence tools
- Integrating ESG metrics into finance systems
AGN can support members by curating a shortlist of mid-market-friendly solutions.
3. Service Evolution
This is where ESG becomes a strategic differentiator. Member firms can reposition from compliance to advisory by
linking ESG to:
- Capital access
- M&A readiness
- Supply chain competitiveness
- Cost optimisation
- Talent and culture
This is precisely the space where AGN can help member firms grow and collaborate globally.
ESG is not disappearing — it is becoming more focused, more global, and more commercially relevant.
AGN member firms are perfectly placed to help mid-market businesses navigate this shift with proportionate, practical and technology-enabled solutions.
6. Further Reading
To contextualise this bulletin within AGN’s broader thought leadership, these previous GBVs provide
useful complementary insights:
Related Global Business Voice Issues
- GBV: ESG Part II: Engaging Your Team to Drive ESG Strategy – framing sustainability as a catalyst for competitiveness and investment.
- GBV: Private Equity – A New Era for Accounting Firms – explores reporting, assurance and credibility in a world of rising expectations.
- GBV: Beyond Compliance – Commercial ESG Service Opportunities – includes sections on the skills and digital toolsneeded to deliver ESG and advisory services.
- GBV: Redefining the Trusted Advisor in Accounting – highlights the shift from compliance-heavy service delivery to value-driven advisory, applicable to ESG service development.
- GBV: A Guide to Funding Future Investment – Raise new capital funds or is it time to sell up? -demonstrates how non-financial disclosures including ESG are increasingly influencing capital-access terms.
- GBV: The Pace of Digital Transformation vs Client Readiness – relevant to the data, systems and operational readiness needed fo ESG reporting.
Mini podcast
Tune into our mini podcast on Spotify for a quick summary of the key insights.
Appendix 1 – Sources of Information
Below is a curated list of authoritative sources used to track and compare global ESG regulatory
developments. These can also be included as hyperlinks in the designed PDF:
Regulatory & Standard-Setting Bodies:
European Commission – Corporate Sustainability Reporting (CSRD / ESRS) updates
EFRAG – European Sustainability Reporting Standards
ISSB / IFRS Foundation – Sustainability Disclosure Standards (S1 & S2)
UK Department for Business & Trade – UK Sustainability Disclosure Standards
Financial Conduct Authority (FCA) – Sustainability Disclosure Requirements & anti-greenwashing rules
US Securities and Exchange Commission (SEC) – Climate and ESG-related disclosure updates
California Air Resources Board (CARB) – SB 253 & SB 261 regulations
Japan Financial Services Agency (JFSA) – SSBJ climate standards
Monetary Authority of Singapore (MAS) – climate disclosure requirements for issuers
Hong Kong Stock Exchange (HKEX) – ESG Reporting Code reforms
Australian Accounting Standards Board (AASB) – climate disclosure standards
Securities Commissions in Canada, Brazil, Chile and other LatAm jurisdictions
MCA & SEBI (India) – BRSR and ESG-related reporting frameworks
Professional & Advisory Sources
Big Four and major consulting ESG regulation briefings
Global Reporting Initiative (GRI) guidance
World Economic Forum (WEF) – climate and sustainability reports
ISSB jurisdictional adoption tracker
International Chamber of Commerce – SME sustainability materials
Task Force on Climate-related Financial Disclosures (TCFD) legacy materials
Market Commentary & Insight
Financial Times Sustainable Views
The Economist – Climate & Environment
Responsible Investor
ESG Today
S&P Global Sustainable1
CDP (formerly Carbon Disclosure Project)
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
[email protected]
Robert Zhang
APAC Representative
[email protected]
Marlijn Lawson
EMEA Regional Director
[email protected]
Faiz Jaffar
AMERICAS Member Services Manager,
Interim contact
[email protected]
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