Supporting clients in their ESG journey

Interest in environmental, social and corporate governance (ESG) has never been greater. Neither has the need for it.

For both countries and corporates, it’s about avoiding reputational damage, remaining compliant and simply doing right by the planet and all who live on it.

"There's an awful lot happening in this space right now," says Mark Kennedy, managing partner at Mazars.

The professional services firm provides audit, accounting, and consultancy services. Though it operates in 90 countries, it is of French origin, making it particularly Euro-centred. That’s a bonus at a time when the European Union has put itself in the ESG driving seat, thanks to its €1 trillion Green Deal.

Since Mazars was established it has grown significantly, particularly in the past 30 years. Today it employs 40,000, including 500 in Ireland.

Unlike most of its competitors, Mazars is an integrated partnership rather than a country by country network of operations. “I’m managing partner in Ireland and also a member of the group executive board,” he explains. “It’s one firm making one effort.”

Green Deal

Around the world its clients include a number of central banks, which gives it particular insight into the ways in which the finance industry is changing in relation to ESG.

“We see it not just through banks but through insurance companies providing catastrophe insurance and dealing with wildfires and floods, as well as in the asset management industry and the shift to green investing; all are sectors we are involved in.”

Equally, because of its international reach, including a number of offices each in China and the United States, it identifies ESG influences as they emerge in other jurisdictions.

Right now, in Ireland, all eyes are on the EU’s Green Deal, and the seismic effect it is set to have on business clients in all industries, and across both public and private sectors.

The move prompted Mazars to develop an online Environmental Social & Governance (ESG) health check to help clients start or progress their ESG journey, in light of developments hurtling down the tracks.

“Europe’s Green Deal will really change both how business is done and how capital is obtained,” says Kennedy.

“It also contains a whole education element in relation to the retraining of people into new areas. It is going to be a big driver of change in so many ways, including, for example, simply figuring out how to capture the type of data you need to report on ESG.”

Reporting obligations

Also likely to bring ESG change is the EU’s non-financial reporting directive, currently up for review. The law, as it stands, requires large companies – those with more than 500 employees – to disclose non-financial information on their social and environmental impact.

Changes will ensure investors and individuals have greater access to the ESG information they need, without imposing excessive reporting obligations on business, due possibly by the end of this year.

Kennedy joined Mazars in the 1990s, and knows that business has long talked about, and in too many cases paid lip service, to the environment, social responsibility and corporate governance.

“ESG is something we’ve been talking about for decades and, arising out of the financial crisis, the idea of integrated reporting became a buzzword which, at the time, there wasn’t a huge appetite for among business. It is remarkable the change we have seen, particularly over the past year,” he says.

“It has been driven by a combination of things, including the EU’s Green Deal, which has a lot of economic and political cloud behind it and which has made it clear that change is coming.”