ESG Advisory Services

01Purpose and scope

• This manual supports the course ESG Advisory Services. It describes how advisers in finance firms, consultancies and in-house sustainability teams scope, deliver and close out engagements that help clients understand and manage environmental, social and governance risks and opportunities. It is written as a working reference for the people who do this work every week, not as a theory text.
• The scope covers the typical activities in an advisory engagement: defining the question, agreeing the deliverables, collecting and checking data, applying a reporting or rating framework, writing findings and supporting the client after the report is issued. It also covers the areas where advisers most often get into trouble, such as overstating assurance, mixing up materiality concepts, or accepting client data without testing it.
• The manual does not replace qualified professional judgment, approved firm procedures or any licensing or authorization required in your jurisdiction. Where a rule depends on location or on the type of client, this manual points you to the authoritative source rather than stating the rule as settled.

02Core principles

• Start from the decision the client needs to make. An ESG engagement for a lender preparing a credit committee paper looks different from one for an asset manager building a stewardship plan or a company preparing its first sustainability report. The decision defines which topics matter, how deep the analysis must go and how precise the numbers need to be.
• Separate what the client has measured from what the client has estimated and from what you have inferred. Advisory reports go wrong when a forecast, a supplier questionnaire answer and an audited figure appear in the same table with the same confidence. Label the source and the basis of every figure you present.
• Use recognized frameworks as a structure, not as a substitute for judgment. The GRI Standards, the SASB Standards, the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board, the Greenhouse Gas Protocol and the Principles for Responsible Investment are widely used references. Each one has its own scope, definitions and intended users, and a good adviser knows which parts apply to the engagement at hand.
• Be clear about what the work is and what it is not. An advisory review is usually not an assurance engagement, and it should not be described as one unless the firm is authorized and the engagement is structured to meet the relevant assurance standard.

03Planning and preparation

• Begin with a scoping conversation that names the client sponsor, the intended audience for the output, the reporting period, the legal entities and operations in scope, and any existing commitments such as a published net zero target or a lender covenant. Write these answers down. Scope drift is the most common source of unpaid extra work and of disputes at the end of an engagement.
• Build a data request early. A practical request lists each data item, the preferred unit, the period, the owner at the client, the acceptable source documents and the date by which it is needed. Energy bills, fleet logs, payroll extracts, board minutes, supplier codes of conduct and incident registers are typical inputs. Expect the first data pack to be incomplete and plan a second round.
• Agree the deliverables and the standard of evidence before fieldwork starts. Deliverables might include a materiality matrix, a gap analysis against a chosen disclosure framework, a greenhouse gas inventory, a supplier risk screen, a draft sustainability section for an annual report, or a board briefing. Each deliverable needs an owner, a review step and an acceptance criterion.
• Identify the stakeholders who will read or act on the output. In finance settings this often includes credit officers, portfolio managers, investor relations teams, auditors, legal counsel and the board or its risk committee. Their questions shape the level of detail. Ask them directly what they need to conclude.
• Confirm the tools and standards that will be used and record the version. Spreadsheets are common for early work, but a shared data log with version control and a clear audit trail is safer once more than two people touch the numbers. If you rely on a third party emissions factor database or a sector taxonomy, record the edition and the access terms.

04Recommended workflow

1. 1
   : Write a one page engagement brief covering the client question, the scope boundaries, the deliverables, the named client contacts, the timeline and the exclusions. Get the client sponsor to confirm it in writing before any data collection starts.
2. 2
   : Run a materiality screen. For a financial services client, this usually means reviewing the sector topics in the relevant SASB industry standard, the client's own risk register, recent regulatory themes and news on comparable firms. Produce a short list of topics with a rationale for each one. Note which topics were excluded and why.
3. 3
   : Map the data sources to each topic. For every metric, identify the source system, the owner, the boundary (which entities and sites are included), the calculation method and any known gaps. Where a metric cannot be sourced, record that as a finding rather than filling the gap with an unsupported estimate.
4. 4
   : Collect and test the data. Reconcile energy and emissions figures against invoices and meter readings where possible. Check that headcount, turnover and injury rates use consistent definitions across sites. Flag outliers and ask the client to explain them in writing. Keep a log of every adjustment made.
5. 5
   : Analyze and draft findings. Compare the client's position against the chosen framework, against peers where comparable public information exists and against the client's own stated targets. Write findings as statements that a reader could check, with the evidence cited. Separate observations from recommendations.
6. 6
   : Review internally. A second adviser should trace a sample of figures back to source, read every claim that uses the word compliant, aligned or net zero, and check that the scope and period statements match the data. Record review comments and how each was resolved.
7. 7
   : Issue the deliverable and hold a walkthrough with the client. Confirm which findings are final, which depend on pending data and which are subject to the client's own legal or disclosure review. Agree a date for any follow-up work, and state that the client remains responsible for its public disclosures.

05Quality checks, risk controls and compliance

• Quality in ESG advisory is mostly about traceability. Every number in a report should lead back to a source document, a calculation worksheet and a named reviewer. If you cannot trace a figure in under five minutes, the figure is not ready to issue.
• Control the risk of greenwashing claims. Avoid language such as fully sustainable, carbon neutral or aligned with the Paris Agreement unless the client's facts and a recognized method support it. Where a client wants to use a label, check the rules that govern that label in the relevant jurisdiction and state the limits of your review.
• Disclosure rules are changing and differ by jurisdiction. Depending on where the client is listed, where it operates and what kind of entity it is, requirements may come from securities regulators, stock exchanges, banking supervisors, pension rules or the European sustainability reporting regime. Confirm the current obligations with the client's legal counsel and the relevant regulator's published materials. This manual does not state which rules apply to any specific client.
• Manage conflicts of interest. An adviser who designs a client's transition plan and then rates that plan for an investor may face a conflict. Document the separation, the disclosure to the client and the approvals required under firm policy.
• Handle personal and commercial data carefully. Employee-level data such as pay gap figures, diversity records and grievance logs often has privacy protections. Aggregate it where possible, restrict access, and confirm the lawful basis for processing with the client's data protection function.
• Where the engagement touches credit, investment or insurance decisions, the output may be relied on by regulated parties. In those cases, qualified professional judgment, the firm's approved procedures and any required authorization take precedence over this manual.

06Collaboration and documentation

• Set up a single engagement file from day one. It should contain the brief, the data request and responses, the source document index, the calculation workbooks, the review log, the draft and final versions of each deliverable, and the client correspondence that changed scope or findings. A reviewer joining late should be able to understand the work from this file alone.
• Agree on working rhythms with the client. A weekly call with the sustainability lead, a fortnightly check with finance and a monthly update to the sponsor is a common pattern for a six to ten week engagement. Keep minutes short and record decisions, owners and dates.
• Document assumptions and exclusions in the body of the report, not only in an appendix. A reader who picks up one page should understand the boundary, the period, the data quality and what was not reviewed.
• Coordinate with the client's external auditor and any assurance provider. Share the scope and data definitions early so that the assured figures and the advisory figures do not diverge. If they do diverge, explain the reason in writing.
• Plan for handover. Many engagements end with a client team expected to update the data next year. Provide a data dictionary, a list of open items and a template for the next cycle so the client is not dependent on the original advisers for every update.

07Measures and continuous improvement

• Track indicators for both the client outcome and the engagement quality. Useful client-facing measures include the share of material topics with a documented owner, the share of key metrics with traceable sources, the number of data gaps closed during the engagement and the time taken to respond to data requests. Useful internal measures include the number of review comments per deliverable, the rate of rework after client review and the number of scope changes raised after kickoff.
• Do not treat a rating or score as the outcome. Scores from external providers can differ widely for the same company because they weight topics differently and use different data. If a client is worried about a rating, the useful question is which underlying data drove the result and whether that data is accurate.
• Hold a short lessons learned session after each engagement. Record what slowed data collection, which framework questions were unclear, which tools worked and which findings the client challenged. Feed these into the templates for the next engagement.
• Review your templates against changes in recognized standards and in applicable rules. Assign one person to track published updates and to note which parts of the firm's materials need revision. Date the version of every template so that users know what they are working from.

08Common mistakes and how to prevent them

• Starting data collection before the scope is agreed. This produces large data packs that do not answer the client's question. Prevent it by making the engagement brief a gate: no data request goes out until the sponsor has signed off the brief.
• Mixing boundaries. An emissions figure that includes a subsidiary in one year and excludes it in the next will mislead the reader. Prevent it by stating the organizational boundary and the consolidation approach in every table and by logging any change to the boundary.
• Overreliance on questionnaires. Supplier self assessments are useful for screening but weak as evidence of performance. Prevent it by sampling responses and asking for documents that support the most important answers.
• Using framework language loosely. Saying a report is in line with a standard when only some disclosures were addressed is a common error. Prevent it by listing which disclosures were covered, which were partly covered and which were not addressed.
• Presenting estimates as measured data. Prevent this by tagging each figure with its basis and by putting estimation methods in an appendix that the reader can check.
• Skipping the handover. The client then cannot repeat the work, and the next cycle becomes a new engagement at full cost. Prevent it by building the data dictionary and the update template into the final deliverables.

09Practical checklist

• Confirm the client decision the engagement must support and record it in the brief.
• Name the client sponsor, the working contacts and the audience for each deliverable.
• Agree the scope, boundary, reporting period and exclusions in writing before data collection.
• Issue a data request with units, periods, owners, source documents and due dates.
• Complete a materiality screen and keep the rationale for excluded topics.
• Trace each key figure to a source document and a calculation worksheet.
• Check all claims against the wording rules that apply to labels and disclosures in the relevant jurisdiction.
• Confirm which disclosure and reporting obligations apply with the client's legal counsel and current regulator materials.
• Obtain an internal review that samples figures back to source and reads every compliance or alignment statement.
• State assumptions, estimates and limitations in the body of the report.
• Record conflicts of interest and the approvals required under firm policy.
• Coordinate definitions with the external auditor or assurance provider where relevant.
• Hold a walkthrough and record which findings are final and which depend on pending data.
• Deliver a data dictionary, open items list and update template for the next cycle.
• Hold a lessons learned session and update the firm templates with the changes.

★Learning sources

• Micro Degree: ESG Advisory Services
• Micro Degree: Accounts Payable Management
• Micro Degree: Bank Reconciliation Operations
• Micro Degree: FinTech Fundamentals