Environmental, social, and governance (ESG) has rapidly become an important investment and risk management philosophy, influencing corporate governance at major businesses worldwide. ESG strategy includes environmental and social factors, like emissions, climate risk, long-term value creation, and the broader social impacts of business decisions.
Companies need to demonstrate their overall ESG strategy to private equity investors, government agencies, and industry regulators through projects like project examples like materiality assessments, regulatory gap analysis, transition plans, and report writing. But many organizations lack the resources to handle this in-house.
ESG consulting helps businesses build ESG programs and meet sustainability goals. However, consultants face many different challenges, from staying up-to-date on changing regulations to managing complex compliance processes.
The growing demand for ESG consulting
New regulations and rising investor expectations have pushed businesses to prioritize sustainability, social impact, climate action, and governance. This makes ESG strategy and regulatory compliance more important than ever.
Many large companies struggle to implement successful ESG initiatives, often because of structural challenges or a lack of resources. In these cases, they turn to ESG consultants to help them make sure their practices (and reporting) meet regulatory requirements and align with strategic goals.
As ESG expectations have matured, new regulatory frameworks have emerged, including CSRD, ISSB, and SB 261. Each has its own standards and reporting mechanisms, but the overall goal is the same: increasing transparency for stakeholders, whether that’s investors, regulators, or the public.
But that doesn’t necessarily make it easier to navigate, especially for companies that need to comply with more than one framework.
The Corporate Sustainability Reporting Directive (CSRD), introduced in 2023, further complicated matters. It requires large E.U.-listed companies (and certain non-EU businesses exceeding revenue thresholds) to follow stricter reporting rules. Affected companies must apply CSRD standards in their 2025 ESG reports.
ESG consultants help businesses interpret and implement these regulations. But with high demand comes high pressure—consultants have to deliver accurate, timely results while keeping up in an increasingly complex landscape.
Top challenges in ESG consulting
ESG consulting is a high-demand field with plenty of opportunities, but the work is challenging. Consultants balance client demands, evolving regulations, and an increasing workload—all while maintaining consistency and quality.
Keeping up with the volume of requests
Business is booming for ESG auditors as companies rush to integrate ESG practices into their business strategies.
But the industry is still relatively new, and the demand for auditors far outweighs the supply—for now. One report projects a 27% compound annual growth rate (CAGR) for ESG and sustainability consulting through 2028.
Some ESG auditors face an overwhelming workload of 200–300 gap assessments per year, with some taking three to four weeks using manual processes.
Time-consuming manual processes
The workload issue isn’t just about volume, but the time and effort each gap assessment requires.
Consultants manually collect, validate, and analyze information from numerous sources before preparing an assessment that aligns with multiple frameworks. It’s an overwhelming and unscalable process that leads to disorganization and delays. Over time, this strain on internal teams can result in burnout and job dissatisfaction.
Staying ahead of the competition
The growing demand for ESG consulting services comes with a lot of opportunities—but also some risks.
While there’s currently no shortage of work, competition is increasing. ESG consulting firms are expanding, and specialists with certifications may have an edge over generalists or professionals pivoting into ESG from other disciplines. Firms that fail to differentiate themselves or adopt more streamlined processes risk falling behind.
Navigating complex and evolving regulations
The regulatory ecosystem for ESG consulting is constantly shifting, so ESG consultants have to stay current on the requirements of multiple frameworks, each with its own distinct standards. Consultants who serve companies that operate across jurisdictions have to guide their clients through all these nuances and clearly demonstrate solid ESG strategies.
The top ESG reporting frameworks that are shaping compliance requirements worldwide include:
- CSRD: Introduced in 2023, the Corporate Sustainability Reporting Directive is the European Union’s current ESG regulatory framework.
- ISSB/IFRS S1 & S2: A set of sustainability disclosure standards covering both climate and sustainability disclosure reports. Over 25 countries (and counting) have adopted or plan to adopt ISSB standards, including the U.K., Australia, Canada, China, Japan and many others.
- California Climate Rules (SB253 and SB261): Rules requiring large businesses operating in the state of California to report on greenhouse gas emissions, climate-related financial risks, and mitigation strategies.
In the U.S., ESG policy is becoming increasingly politicized. So, businesses and consultants potentially have to navigate both pro-ESG regulations and anti-ESG measures—sometimes at the state and federal levels.
Pressure to deliver value quickly
Businesses expect fast results and actionable insights from their ESG consultants to shape their ESG strategies. Consultants have to balance speed with quality, and there’s a lot of pressure to both meet compliance requirements and produce meaningful recommendations.
Lack of efficient tools or automation
Because ESG is growing as a priority, technology and business structures have yet to catch up. Consultants struggle to access the ESG data they need, simply because there aren’t standardized ways to collect and store it. When data is available, it comes from multiple departments in inconsistent formats, leading to manual work and data management headaches.
Adding to workloads is the misconception that ESG work can’t be safely automated. This means consultants often spend countless hours sifting through documents just to gather and sort out the information and datapoints they need.
The good news? There is a better way.
ESG-specific technology exists and performs well. By adopting tools designed by ESG experts, consultants can eliminate manual work, automate workflows, and scale their operations more efficiently. This is a great way to ensure long-term sustainability in a complex, high-volume field.
Best practices for simplifying ESG consulting tasks
At Manifest Climate, we believe technology is a major part of the solution—but it’s not the only one. To truly improve ESG consulting, processes have to evolve alongside technology.
These five best practices combine both process improvements and technology to help consultants streamline tasks, improve accuracy, and scale their capacity.
1. Invest in tools that automate your manual tasks
Repetitive manual tasks like data collection, gap assessments, and report generation are prime candidates for automation. Consultants have been cautious about automating these high-stakes processes, but manual work just isn’t scalable. The only way to keep up with increasing demand is to use technology that enhances efficiency without sacrificing quality.
By offloading routine tasks, consultants can focus on providing strategic guidance, driving business growth, and building relationships—something only humans can do.
Of course, not all AI-driven solutions are built for ESG compliance. Generic AI tools can’t meet the stringent standards of ESG regulations, but Manifest Climate is different. Our platform is purpose-built by ESG experts, with AI models rigorously tested by experienced climate lawyers and ESG experts to ensure accuracy and regulatory depth.
Request a demo to see how Manifest Climate can help streamline your workflow.
2. Build scalable workflows for data collection and reporting
Wherever possible, ESG consultants should develop standardized processes and a clear roadmap for how they will gather data from their clients. They also need standardized processes for reporting, and all of these processes should easily scale as the firm grows or client demands increase.
Standardization improves efficiency, ensures consistency across projects, and makes workflows more automation-friendly. In other words, your firm can handle larger workloads without sacrificing quality and accuracy.
3. Stay updated on evolving regulations
ESG regulations aren’t static. They’re constantly evolving, so consultants need to continuously monitor changes, whether it’s CSRD, ISSB, or SB 261. Staying up to date helps ESG consultants provide accurate, compliant reporting and effectively guide clients through regulatory changes.
4. Collaborate with clients to set realistic goals and expectations
ESG consultants often feel like they need to adapt their work to each client’s unique formats and processes. And while it’s true that every business is unique, consultants can set expectations and establish workflows that apply across the board to drive efficiency and consistency.
Clear communication improves outcomes and builds long-term partnerships. By aligning goals and expectations early, ESG consultants can create more value for their clients and position themselves as trusted strategic partners.
5. Invest in ongoing training for your team
Because ESG is constantly changing, consultants have to continually develop their industry knowledge. Keeping up with changes is key to remaining competitive.
One of the most important things consultancies should do is invest in regular training for their team members. Strengthening ESG knowledge across the team enhances service quality and keeps your firm ahead of regulatory changes and the competition.
Streamline compliance and workflows with Manifest Climate
ESG strategizing is challenging, high-stakes work. Consultants navigate shifting regulations, manage vast amounts of data, and deliver reliable, timely insights—all while balancing growing client demands. Without the right tools, these tasks can quickly become overwhelming and inefficient.
Manifest Climate simplifies ESG compliance with AI-powered automation and expert-backed insights. Our platform breaks down complex requirements into structured datapoints, leveraging advanced language models to automate ESG gap assessments.
With Manifest Climate, consultants can streamline workflows, improve accuracy, and scale with confidence.
If you’re ready for a better way to manage ESG compliance for your clients, book a Manifest Climate demo today.
