ESG – your opportunity

Clive Booth explains how Donald Trump’s stance on ESG has impacted the United States’ growth.

Environmental, social and Governance (ESG) factors are becoming a central consideration in how companies are valued, audited and invested in – especially within long-term institutional portfolios like pension funds. Yet, while some companies are expanding their ESG commitments, others are scaling back, influenced by shifting political, economic and regulatory landscapes.

For aspiring accountants and those studying for qualifications like ACA, ACCA or CIMA, understanding how ESG developments impact financial reporting, investment analysis and regulatory obligations is increasingly critical –not only for exam success but also for shaping future career trajectories.

The Global ESG Landscape is very much a mixed picture.

Companies scaling back

1. Disney: Under political pressure in the U.S., particularly around social and governance issues, Disney has reassessed its ESG positioning. Environmental targets remain, but reductions in social commitments raise questions around corporate governance, risk disclosures and stakeholder reporting. For accountants, this presents a case study in how non-financial risks can affect company value, especially as regulators look more closely at how companies define and disclose material ESG risks.

2. ExxonMobil: As energy prices soared in 2023, ExxonMobil and other oil majors were rumoured to be easing their ESG ambitions. This shift can alter how accountants assess provisions, asset impairments and long-term liabilities linked to environmental risks – key knowledge areas in corporate reporting and audit. Investment analysts and pension trustees may adjust risk weightings and stress tests accordingly, directly influencing asset allocations.

3. BlackRock: The world’s largest asset manager continues to champion ESG principles but has adopted a more cautious tone amid U.S. political pushback, including from Donald Trump and Republican state treasurers. Accountants working in or with asset management must be alert to how changing ESG strategies influence fund allocation models, risk reporting and performance metrics – especially for clients with fiduciary duties like pension funds. Additionally, the increased politicisation of ESG means that accountants must be prepared to assess reputational risk alongside financial disclosures.

Companies strengthening their ESG

1. Patagonia: Still a gold standard for sustainability, Patagonia’s ESG transparency sets an example for ethical sourcing and climate accountability. For students and trainees focusing on sustainability assurance or integrated reporting, Patagonia exemplifies how ESG narratives can translate into brand value and investor confidence. As reporting frameworks demand more detailed, auditready disclosures, such companies help set the benchmark for what good looks like.

2. Unilever: Unilever’s ‘Climate Transition Action Plan’ reflects a serious commitment to ESG integration. For accountants, this links directly to the increased adoption of climaterelated financial disclosures (TCFD), scenario planning and ESG-related KPIs. For those entering advisory, audit or risk management roles, understanding how to evaluate the credibility and financial impact of such plans will be an essential skill.

3. Microsoft and SAP: These tech giants have pledged to be carbon negative by 2030. Their proactive approach to ESG enhances investor trust and ensures early compliance with emerging global standards such as the EU CSRD and IFRS S2. Accountancy professionals involved in financial planning, audit or reporting will increasingly need to assess and validate carbon data and transition plans as part of due diligence and assurance processes.

The rising tide of ESG reporting

In 2023 ESG reporting surged significantly, driven by:

• The EU Corporate Sustainability Reporting Directive (CSRD), requiring large and listed companies to provide detailed, audited ESG data.

• The SEC’s proposed climate disclosure rules in the United States, aimed at mandating climate risk disclosures in financial statements.

• The launch of the IFRS Sustainability Disclosure Standards (IFRS S1 and S2), bringing consistency and comparability to ESG reporting globally.

For accounting professionals, this marks a structural change in the reporting environment. Sustainability disclosures are now entering the realm of statutory reporting, moving from voluntary to mandatory across many jurisdictions. Part qualified accountants must be ready to understand and apply these standards, particularly in relation to materiality, double materiality and assurance over ESG metrics.

ESG reports will become more detailed, auditable, and aligned with international standards. This is already influencing how pension funds assess long-term investment risk and how companies are benchmarked in financial models. ESG literacy will soon be a minimum requirement for roles in audit, corporate finance, financial planning and consultancy.

Key takeaways

• Be ESG-literate: Understanding how ESG affects financial reporting, audit, investment decisions, and stakeholder communication is becoming essential.

• Know the frameworks: CSRD, IFRS S1/S2, TCFD, and GRI are no longer niche - they are core to reporting, both now and in the future.

• Understand investment relevance: ESG risks can materially impact valuations, cost of capital, and pension fund asset allocations.

• Think career-wise: Whether you're heading into audit, corporate reporting, financial advisory, or risk, ESG competence will enhance your employability and strategic value.

• Sharpen ethical judgement: ESG data is still subject to interpretation. Professional scepticism, a cornerstone of accountancy ethics, is critical in evaluating narrative and numerical disclosures.

ESG is evolving

Despite political resistance, including from figures like Donald Trump, ESG principles are being embedded into global regulatory frameworks and investor expectations. For accountants – especially those in training –this represents an opportunity as much as a challenge. The profession is being called upon to uphold transparency, ensure accountability, and provide insight into how companies are responding to environmental and social change.

For those entering the workforce now, ESG awareness isn’t just a box to tick – it’s a cornerstone of future-proof finance careers. Whether you’re preparing for your next exam or stepping into the profession, make ESG part of your toolkit.

• Clive Booth, Founder of The ESG Foundation