Forecast 2025: Big Four Target More Revenue from Sustainability

Demand for businesses to detail their green evolution means more advising income

Long story short

• New EU Sustainability Regulations (CSRD) – Starting in 2025, thousands of companies in the EU must disclose detailed information on climate impact, employee conditions, and corporate governance, affecting around 50,000 businesses by 2028.

• Sustainability Audits vs. Financial Audits – PwC predicts that sustainability audits will eventually surpass financial audits in value, with ESG reporting revenue already growing by 20% in the last fiscal year.

• Big Four Expansion into ESG Services – Deloitte, EY, KPMG, and PwC are rapidly scaling up their sustainability consulting and auditing teams to meet the increasing demand for ESG compliance and advisory services.

• High Demand for ESG Specialists – Recruitment firms like Rehwald Associates report rising salaries and strong hiring trends for ESG professionals, with junior roles earning €60,000–90,000 and senior positions exceeding €100,000 annually.

PwC Luxembourg and rival firms are looking toward a big, new revenue opportunity from 2025 as thousands of companies must disclose for the first time detailed information about their climate change impacts, employee conditions, human rights protections, anti-corruption efforts, and board diversity.

Corporations with more than 500 employees this year will be the first subject to the EU’s Corporate Sustainability Reporting Directive (CSRD). The rules are a centrepiece of the bloc’s drive to rebuild into a resource-efficient economy that cuts out new greenhouse gas emissions by 2050.

“We expect CSRD to have a transformative impact on the European business landscape,” PwC said in a report released in late November.

“While the barrage of regulatory developments in recent years may be seen by some as a hamper to the EU’s growth and competitiveness, we firmly believe that the CSRD can sow the seeds of business transformation, reinvention, and long-term resilience and success,” the report by the largest of the Big Four accounting and consulting firms in Luxembourg stated.

Sustainability Audits Will Replace Financial Audits

The first set of companies subject to the new rules must issue conforming reports in 2025 for their 2024 financial year. By the time the regulation is applied in 2028, about 50,000 businesses listed in or with significant operations in the EU will be required to accurately and credibly spell out not only their own environmental impact but also that of their suppliers and customers.

Financial asset and portfolio managers have been subject to sustainable finance disclosure regulations (SFDR) since 2021. But the pressure now extends across the board, with about half of the nearly 200 C-suite executives in Europe and the UK surveyed by PwC predicting that their reports this year on fiscal year 2024 will have a material impact on their financing conditions and eligibility.

PwC’s sustainable finance leader for asset management, Geoffroy Marcassoli, said the firm is betting big on the financial returns from sustainability reporting work.

“We even believe that sustainability audits will replace financial audits” in value, he said, speaking at a conference in early December.

That may take seven to ten years, depending on society’s demands, regulatory developments, and how quickly corporations adapt to sustainability reporting, Marcassoli said.

But revenues generated from reports revealing environmental, social, and governance (ESG) sustainability as a result of the CSRD and SFDR grew by 20% during the fiscal year that ended in June, more than the 18% growth in auditing, PwC Luxembourg’s annual review released in October said.

Worldwide Trend

Worldwide client spending on consulting, implementation, engineering, and IT services designed to meet ESG goals was expected to grow from $44 billion (€42 billion) this year to $66 billion in 2028, according to market research group International Data Corporation (IDC).

“ESG business services, once a nebulous and ill-defined market, has become one of the fastest-growing spaces in the business world,” IDC said in a July report.

Big Four Firms Expanding into Sustainability

All of the Big Four firms are jumping into the new arena to some degree.

In early December, Deloitte announced it had poached a PwC Luxembourg leader of its so-called Sustainable Value Creation Services team targeting alternative finance firms. The new partner joined what Deloitte calls its Sustainability & Emerging Assurance practice.

“ESG and sustainability audits are becoming a key driver of transformation and trust for organisations worldwide,” Deloitte said in an email. “Deloitte Luxembourg is already expanding its specialised teams and enhancing its services to meet this demand.”

EY has more than 100 sustainability specialists embedded in other teams working for clients in private equity, banking, real estate, and other fields, EY Luxembourg Managing Partner Olivier Coekelbergs said in an interview. The firm is expecting to add more, he told the Luxembourg Times.

Recruiting ESG Specialists

There has been a delayed roll-out for sustainability experts in the Big Four over the past two years due to worries about Europe’s sluggish economic growth, Anderson Wise staff recruiter Darren Robinson said. But the need for CSRD reports building from 2025 “will require expertise in this space,” he said.

Recruiting firm Rehwald Associates has placed at least five ESG specialists in jobs with Big Four accounting and consulting firms in Luxembourg and also helped to place people with those skills in other types of companies, founder Manuel Rehwald said.

The need for ESG audits that comply with the CSRD requirements from 2025 means recruitment of both new professionals with the right competence and training existing employees, he said.

“While ESG issues were previously primarily of a strategic nature, the focus is now on specific audit tasks and evidence management,” Rehwald said.

ESG specialists in auditing are in such high demand that incentives are added onto salaries of between €60,000 and €90,000 gross per year for qualified junior and intermediate candidates, while senior positions and experienced ESG auditors can expect to start at €100,000 and higher, Rehwald said.

This article was published by Luxembourg Times on 03/01/2025