Capability, capacity, and commercials: The ESG trilemma for accounting firms

At a recent roundtable we hosted with ten mid-tier UK firms, it became clear that the core barriers to action aren’t ideological. Everyone agrees ESG is important. Everyone sees the demand building. But firms are caught in a trilemma: navigating the overlapping challenges of capability, capacity, and commercial viability.

1. Capability: Who’s got the know-how?
   Even the most forward-thinking firms are still building internal expertise. ESG leads are often wearing “two hats” - carving time between audit deadlines or other leadership responsibilities. Many are self-taught, driven by passion but lacking structured training or clarity on evolving standards.
   
   The regulation is changing fast. UK Sustainability Reporting Standards (SRS), PPN 06/21, CSRD, and the EU Omnibus are creating a complex patchwork. Most accountants we spoke to aren’t afraid of learning something new—but they are concerned about how to make that learning scalable across their teams. One firm put it succinctly: “We need to know a little about a lot—but we’re barely staying on top of our core work as it is.”
2. Capacity: Who’s got the time?
   Launching an ESG service line isn’t just about knowledge - it’s about people and bandwidth. Firms are stretched. New business areas often compete with more established (and billable) ones. In this context, ESG can become a passion project for a few internal champions, rather than an institutional priority.
   
   There’s also the issue of fit: even when clients are interested, it’s not always clear where ESG sits. Is it part of risk, audit, advisory, or something else entirely? Without clear ownership, efforts can stall - especially when internal teams don’t know where to slot these services or how to structure delivery.
3. Commercials: Is there really a market here?
   This might be the toughest question. Many firms are unsure how to price ESG work - or whether clients are even ready to pay for it. There’s a tension between perceived value and real demand. Larger clients may be under pressure to report, but they often turn to consultants, unaware that their accountants can do this work. Meanwhile, SMEs are either unaware, unconvinced, or under-resourced. This makes business case development difficult. One leader shared that they were building a service model "without knowing when the first fee will land." It’s risky - and for time-poor teams, risk usually loses out to certainty.

No firm will solve the trilemma alone. But here’s what we can do:

• Demystify the regulatory landscape. Help translate complexity into practical guidance.
• Build confidence, not just competence. Internal champions need support, peer learning, and proof points to scale ESG internally.
• Think ecosystem, not competition. Templates, shared tools, and repeatable delivery models can reduce the burden for everyone.

The ESG imperative isn’t going away - and accounting firms are uniquely placed to meet it. But they’ll need more than conviction. They’ll need a way through the capability-capacity-commercials trilemma. And that starts with conversation, collaboration, and the confidence to take one step forward - even if the whole path isn’t clear yet.

The firms that are winning in this space are not just winning now, they are gaining momentum for the future. It’s compounding and important to recognise these services are an investment for future growth & future proofing by safeguarding your existing revenue.

The winners are focussing on a few key things:

• Speed - Launching as soon as possible; perfection is the enemy of progress.
• Building capability in the team along the way. With capability comes confidence.
• Over investing in marketing - clients need to know and understand your new position in the market and this doesn’t happen via one newsletter - multi channel, multi-tier, top down and bottom up, regular comms to your existing client base are a must.
• Offering simple products as a gateway to future work is a gamechanger.