ESG investing
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
Most exchanges have imposed tougher regulatory reporting and compliance in environmental, social and governance standards to beat climate change. Photo: Shutterstock

Big Four accounting firms expand ESG hiring in Hong Kong, mainland China as tougher regulatory compliance exposes deficit in talent

  • Deloitte, EY, KPMG and PwC are boosting their ESG teams by hiring, lateral acquisition and upskilling to meet growing demand from clients facing tougher reporting rules
  • Industry faces talent gaps as bourses embrace climate-change agenda and push for sustainability becomes front and centre in global investing
The Big Four accounting firms are stepping up their staff recruitment for environmental, social and governance (ESG) services teams in Hong Kong and mainland China, following growing demand for regulatory compliance from clients, executives said.

Deloitte has more than doubled the size of its ESG team in Hong Kong and plans to maintain the momentum, while EY is aiming to triple the size of its Greater China team of over 200 staff over the next three years. PwC has doubled its team since mid-2020, while KPMG China has boosted its 300-strong unit through “lateral talent acquisition.”

Current ESG regulatory trends have driven listed companies across all industries to reduce their carbon footprints and the effects their overall operations have on climate change. 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.
Current rules also require listed companies 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 is 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 ago. The size of the US market expanded 45 per cent to US$31 billion. The rest of the world had US$6.3 billion, twice from a year earlier.


Chinese mainland begins supplying Hong Kong with carbon-neutral liquefied natural gas

Chinese mainland begins supplying Hong Kong with carbon-neutral liquefied natural gas

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, said Mohit Grover, the consultancy’s sustainability and climate leader in Hong Kong said in an email reply.

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, Ee Sin Tan, its financial accounting advisory services partner, said in an email. 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 added.

KPMG China has grown its ESG team to around 300 strong, including redeployment and upskilling its existing pool of talents, its head of ESG practice Lin Wei said. Revenue from its ESG-related services has more than tripled over the past year under a healthy pipeline of opportunities, 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.


China completes its first greenhouse gas observation network

China completes its first greenhouse gas observation network

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

PwC China has doubled its ESG team in mainland China and Hong Kong to over 500 staff since July 2020, Amy Cai, its managing partner overseeing the ESG unit, said in an email. Its revenue from ESG services has 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 the climate practices, compared with mature markets in Europe,” she 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.”