How firms are seizing the ESG opportunity

Sustainability teams are breaking new ground in accounting firms — but staffing and training remain a challenge.
By Andrew Kenney


The leaders of CLA (CliftonLarsonAllen LLP) have known for years that climate change and social issues would be part of their work in the future. But they didn’t know just how fast that day would come.

“We originally thought we had a very long runway. We thought we had time to meet the market demand,” said Walker Wilkerson, CPA, managing principal of national assurance and a leader of the firm’s environmental, social, and governance (ESG) efforts, who works out of the firm’s Lakeland, Fla., office.

But the expectations of CLA and other firms changed this spring with the arrival of a long-awaited SEC proposal that would bring new standardization of climate-related disclosures and boost the role of accountants in reporting on carbon emissions and climate-related risks.

The draft would require some companies to disclose carbon emissions, climate-related risks, climate-related targets and goals, and governance and oversight of those risks within SEC Form 10-K and other documents. It would also require separate assurance over carbon emissions disclosures. The changes would apply to public companies and those filing a Securities Act or Exchange Act registration statement.

Wilkerson and others expect that the biggest ideas of the draft will indeed be implemented — and that by requiring independent auditing of climate information, the proposal will start a new rush for ESG-related accounting services.

“What we believed is people were going to go at their own pace, and now the SEC has changed the game,” Wilkerson said.

Until recently, climate disclosures and other ESG issues were the domain of the biggest companies and accounting firms. But the proposed new climate regulations already are cascading from large public companies to their suppliers and contractors throughout the United States and global economies — creating significant opportunities for new business for accounting firms in the ESG space. To meet the demand, though, firms will need to develop talent and expertise in an emerging field.


Research from the Association of International Certified Professional Accountants, representing AICPA & CIMA, and the International Federation of Accountants, underlines the opportunity for firms to provide assurance engagements for ESG information, said Ami Beers, CPA, CGMA, senior director–Assurance & Advisory Innovation for the Association. The 2021 State of Play report found that U.S. companies seek assurance on ESG information at higher rates than the global average but that relatively few have been seeking assurance from CPAs so far.

Beers expects that to change as companies are driven toward more standardized reporting.

“If information needs to be filed with SEC or provided to investors, the information needs to be investor-grade. That demands a higher level of quality, and with that a lot of companies are starting to migrate this work into the finance function,” she said. “It needs to have established processes and controls around it similar to those that are applied to financial reporting.”


ESG work is in some ways a natural fit for accountants. But it comes with critical new demands for talent and knowledge. With the field still evolving, firms and their clients are creating new processes, compiling information that they may never have reported previously, and racing to address a shortage of employees with ESG experience (see the sidebar, “How One Firm Is Breaking Ground in ESG”).

“Developing an attestation practice is no small feat in this space,” said Christopher Tower, CPA, ESG strategy and service leader for BDO, who works out of the firm’s Orange County, Calif., office. Often, firms are being asked to find and attest to data that hasn’t previously been formally reported. “You need to figure out your attestation methodology: What standard are you going to use? What is acceptable evidence for nonfinancial data? You’ve got to figure out how you determine materiality in a nonfinancial audit.”

Wilkerson has experienced firsthand the challenges, and opportunities, of this new terrain. Recently, a client was seeking tax credits for using sustainable energy resources to heat its boilers.

“We not only had to understand the equipment, but we also had to understand the underlying calculations,” Wilkerson said. “It was quite the educational process.”

The project was emblematic of the challenges that accountants face in ESG, in that it required a combination of outside expertise and in-house skills and research. The firm’s team became a conduit between outside engineers and the client, with the accountants also developing their own knowledge of certification requirements for the equipment.

“We had to go out and find the expertise,” Wilkerson said. “You’ve got to bring together the right people. It’s a developmental process.”

And that development goes far beyond a single project, said Kristen Sullivan, CPA, CGMA, the global audit and assurance sustainability and climate services leader for Deloitte, who works out of the firm’s Stamford, Conn., office. While a client’s interest may be in attestation in a particular area, the firm should be considering much deeper questions about the client’s governance and reporting structure and control environments for ESG.

“When you unpack the hundreds of pages of the greenhouse gas protocol, which is the standard most commonly used, the question is, ‘How are you going to apply it?’” she asked. “What is the data management flow, from source to report? How are you accessing that information?”


Finding the talent to staff ESG teams can be a challenge. There is only a small pool of people with a background in both accounting and ESG issues, said Joe Holman, CPA, ESG practice leader for Withum, who works out of the firm’s New York City office.

“We’re not finding CPAs, but we would like to. Currently, many CPAs don’t have the knowledge base, but over time we’ll be looking for CPAs that have sustainability backgrounds,” he said.

For now, his team has instead hired young employees with degrees in sustainability topics, pairing them with those from a traditional accounting background.

Holman himself went back to school to obtain a certification in sustainability through an intensive program at Columbia University. The experience has shown him that ESG is a natural fit for many in finance.

“If you look at my career, I was a partner at a CPA firm at one time, I ran a fund administration company, I went into ESG, which seems completely different,” Holman said. “But I’ve always done the same thing: I observed, I measured, I reported, and I verified. That is what I’ve done my entire career.”

Besides tapping outside experts and making new hires, firms also are building up their in-house talent.

At Grant Thornton LLP, Jim Burton, CPA, the firm’s partner and leader for ESG and sustainability, began staffing the ESG team by scouring the firm’s HR databases for people with relevant experience and interest. Some have joined the ESG team directly. But others, including partners and managing directors, will be rotated through the program for shorter periods, ranging from three to 36 months.

“We’re gathering a group of people who are getting an expedited experience,” Burton said. The goal is not just to build up a core ESG team but also to spread expertise throughout the firm.

“If we’ve done it right, at some point in 2024, the majority of people at the firm will be experienced and delivering this ESG service from their normal home base,” Burton said.

Training efforts are also paying off at KPMG, according to Ruth Tang, CPA, an audit partner leading ESG strategies at KPMG IMPACT, the firm’s ESG platform. She works out of the firm’s New York City office.

KPMG is taking two approaches to ESG training. It’s providing general education on the topic to all of its U.S. auditors on the assumption that they will soon encounter ESG work with their existing clients.

But the firm also is developing ESG specialists, taking them “offline” from other jobs to undergo full-time training and “become a deep-dive expert,” Tang said. That training is focused on how to tackle ESG subject matter and the relevant controls and data.

“The time it takes to upskill should not be discounted,” she said.

Firms also can build expertise by completing internal ESG projects. For example, CLA has published staff diversity reports and launched a climate disclosure effort for the firm itself.

Internal ESG projects like these have been “so important to our development,” Wilkerson said. “We’re learning all the things we need to understand when we go to the external market. It also helps you understand the pain points, [as we’re] basically going through it from a client perspective.”


At each of these firms, the expectation is not that a stand-alone team will take on all the ESG work itself. Instead, the leaders in this emerging space see their teams as in-house consultancies that are helping other partners complete specialized projects and develop ESG skills.

“We’re not trying to accumulate a massive stand-alone service line or army of people,” Burton said. “For us, it’s an integrated service offering. It brings all of our existing capability to the client because the subject matter involves advisory, it involves assurance — there’s even a tax component.”

Most often, sources said, ESG business is coming from existing clients, which makes collaboration across the firm all the more important. The ESG effort has to include not just the firm’s accounting leaders but also staff in operations, sales, and other areas.

But threading ESG across a firm won’t always be easy. At some firms, partners may be uneasy with the idea of bringing in the ESG team to work with clients with whom they have a long-standing relationship. Or they may not feel comfortable discussing and proposing ESG services.

The solution, Holman said, is to help other partners understand the growing value of ESG. “ESG is something brand new,” he said. “You’ve got to bring them business. There’s got to be a value proposition. That’s the internal sell.”

Taking on a smaller ESG job, he tells colleagues, can open the opportunity for the firm to do more of a client’s core tax and audit work. He has also warned colleagues that if the firm doesn’t get started on ESG, competing firms could start to pick up business with their clients.

The leaders interviewed for this article urged other firms to assess their own ESG missions, to decide what services they can best offer, and to proceed with caution as they enter a new arena.

“Structure is everything. Leadership tone is everything. The firm’s commitment to ESG as a strategy, both internally and externally, that’s very important,” Tower said. “And my concern is [that if a] firm embarks on this without having really thought about having all of these elements, it can really impact them negatively.”

But he and other leaders agreed: The time for urgency has arrived.

“It doesn’t matter if you’re a 10-person firm or a 1,000-person firm. [ESG is] going to influence your ability to attract people, it’s going to influence your interactions with your customers, with your community,” Burton said.

Above all, these firm leaders see ESG as the future of their own firms and of the business world itself. As companies small and large react to the globe’s most pressing issues, they’ll expect their accountants to make the journey with them.

How one firm is breaking ground in ESG

Newly formed ESG teams at CPA firms are being drawn into a wide range of projects. Often, this requires them to navigate unfamiliar territory.

At Grant Thornton LLP, the new ESG team started by surveying the firm’s existing work in the space.

“It was taking an inventory of the solutions we were already providing and how they fit within the ESG umbrella,” said Jim Burton, CPA, partner and leader for ESG and sustainability at Grant Thornton. The team then projected what clients would need in terms of ESG over the next five years.

They learned that relatively few existing clients — less than 1% — were filing formal reports on greenhouse gas emissions and other sustainability issues. But the team found that some clients already were working with the firm to report on their supply chain and other metrics as part of contracts with third parties.

“We found a lot of compliance-like reports: clients who had committed through contractual arrangements to meet certain operating metrics, whether they be percentages, volume, or activity,” he said.

In its short lifespan, Burton’s team has reshaped those scattered engagements into a more comprehensive offering. They’ve tapped into a previously unrecognized demand, finding that 80% of their referrals are coming from existing clients. And they’ve shifted the firm from completing one-off ESG projects to helping clients develop overarching strategies.

“We’ve had dozens and dozens of projects that we’ve completed and performed and delivered, and follow-on projects from them,” Burton said. “We’ve taken clients from identifying a strategy to identifying key performance metrics.”

About the author

Andrew Kenney is a freelance writer based in Colorado. To comment on this article or to suggest an idea for another article, contact Courtney Vien at



Climate Change: What the SEC Proposal Means for Companies, Auditors,” JofA, April 1, 2022

ESG Offers Growth Opportunities for 2022,” JofA, Dec. 2021

Podcast episode

5 Trends Driving the Importance of Understanding ESG,” JofA, June 2, 2022

Online resources

AICPA summary: SEC proposed rule on climate-related disclosures

ESG Reporting and Attestation: A Roadmap for Audit Practitioners

Practice aid: Consideration of ESG-Related Matters in an Audit of Financial Statements


Attestation Engagements on Sustainability Information Guide(Including Greenhouse Gas Emissions Information)

Add credibility to your sustainability information with this authoritative guide developed to assist CPAs with interpreting and applying the clarified attestation standards. Supersedes AICPA Statement of Position 13-1, Attest Engagements on Greenhouse Gas Emissions Information.


Sustainability Assurance Engagements

Covering sustainability, greenhouse gas emissions, and attestation engagements, this self-study online course will assist you with interpreting and applying the clarified attestation standards (SSAE No. 18).


For more information or to make a purchase, go to or call the Institute at 888-777-7077.

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