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ESG Regulatory Impacts to the Middle Market

ESG Regulatory Impacts to the Middle Market

Published 01-15-24

Submitted by Baker Tilly

By Srinand YalamanchiliMallory Thomas, Brianna Hardy

With the middle market being the bulk of the supply chain, it's important to understand the ESG -- environmental, social and governance -- pressures from public companies that are trickling down and impacting the middle market.

Whether a company is privately held or not, middle market companies will need to be transparent with their ESG reporting to the level that these large companies require.

Without the in-house capability to report ESG metrics, companies are going to be less competitive in the marketplace when it comes to RFPs and maintaining contracts with large companies who require greater levels of transparency.

For many companies, understanding where they are in their ESG journey is the first step to designing and implementing a successful ESG strategy. It takes time to develop your reporting structure and to incorporate ESG initiatives into your company strategy. Begin by evaluating your ESG strategy, risk and reporting needs now.

Connect with an ESG specialist at Baker Tilly

Why should companies dive headfirst? 

  • Regulatory demand and implications to supply chain with increased compliance and reporting requirements
  • Stakeholder demand and supply chain requests for sustainability metrics
  • Talent attraction and retention
  • Market competitiveness and new access to capital
  • Value creation from cost savings and energy efficiency through transition activities
  • Risk mitigation (economical, transitional, environmental, reputational, etc.)
  • Reporting and assurance requirements

ESG is not a passing trend and focusing on ESG is imperative.

exterior of a glass office building

Industry examples and business impacts 

There are steps that middle market companies can take today to protect and enhance their market share and their value as a result of the ESG transparency needs that will be cascaded upon them. It’s just a matter of getting started.

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Baker Tilly US, LLP (Baker Tilly) is a leading advisory CPA firm, providing clients with a genuine coast-to-coast and global advantage in major regions of the U.S. and in many of the world’s leading financial centers – New York, London, San Francisco, Los Angeles and Chicago. Baker Tilly is an independent member of Baker Tilly International, a worldwide network of independent accounting and business advisory firms in 145 territories, with 41,000 professionals and a combined worldwide revenue of $4.7 billion. Visit bakertilly.com or join the conversationon LinkedIn, Facebook and Instagram. 

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