Big Four seeking to enlarge teams for ESG services

Accountants Deloitte, EY, KPMG and PwC are upskilling to meet growing demand from clients

The Big Four accounting firms are stepping up their staff recruitment for environmental, social and governance (ESG) services teams in Hong Kong and the mainland, following growing demand for regulatory compliance from clients, executives said.

Current ESG regulatory trends have driven listed companies across all industries to reduce their carbon footprint and the effects their operations have on the climate.

The Hong Kong bourse requires the filing of annual ESG reports, while China’s securities regulator has called for mandatory disclosures to include environmental violation penalties, among others.

The rules also require listed firms to add ESG factors to the financial metrics of their business operations and consider strategic and capital allocation decisions.

“Our clients are starting to request beyond traditional reporting, and solutions that can support and drive their businesses to be less carbon intensive and more sustainable in the long-run,” said Melissa Fung, risk advisory leader in the southern region at Deloitte China. There was a shortage of people with experience in environmental science, risk modelling and engineering, she added.

China overtook the US as the second-largest market for climate-related funds in 2021, according to Morningstar, when the funds grew their assets by 149 per cent to US$46.7 billion from a year before. The size of the US market expanded 45 per cent to US$31 billion.

Deloitte has more than doubled the size of its ESG team in Hong Kong to over 50 staff in the last 12 months and plans to sustain the hiring momentum, according to Mohit Grover, the consultancy’s sustainability and climate leader in Hong Kong.

EY plans to triple the size of its Greater China team of over 200 staff, as well as their global team, over the next three years, said Ee Sin Tan, its financial accounting advisory services partner. The firm has grown its global climate change and sustainability services team by 60 per cent in the past year to more than 2,300, Tan said.

KPMG China had grown its ESG team to around 300 strong, including redeployment and upskilling its pool of talents, head of ESG practice Lin Wei said. Revenue from its ESG-related services had more than tripled over the past year, he added.

“Talent with carbon-related educational background and work experience [are] in high demand,” said Judy Li, EY’s climate change and sustainability services partner in Greater China. These included those with environmental science, engineering or sustainability and climate-related degrees, she added.

Talent with carbonrelated educational background and experience [are] in high demand

JUDY LI, EY

The firm also noted interest from investors in deeper climate-related disclosures from companies, including their science-based plans on net-zero transitions, Li added. More companies have also sought advisory services to improve their ESG scores with the various rating agencies, she added.

PwC China had doubled its ESG team on the mainland and in Hong Kong to over 500 since July 2020, said Amy Cai, its managing partner overseeing the ESG unit. Its revenue from ESG services had jumped 50 per cent this year from a year earlier, she added.

“In Asia, there is a lack of climate experts as the countries are just developing climate practices, compared with mature markets in Europe,” Li said.

“We work closely with our network firms to bring in the relevant climate experts to mainland China and Hong Kong to meet the market demand.”