A new study from climate reporting platform Trace reveals that the accountancy industry is largely unprepared to assist clients in carbon reporting, despite acknowledging the benefits of offering carbon reporting services.

Climate Reporting: The Future of Accounting explores the accounting industry’s critical role in climate reporting, with an excerpt from the report showing that: 

Accountants recognise that climate change will have an impact on the requirements of their industry. Three quarters of respondents (75%) believe the accounting industry will play a pivotal role in actively addressing climate change, with 96% seeing a potential benefit in offering climate reporting services.

However, accountants aren’t ready to take advantage of this opportunity. Just 7.7% of respondents believe they are ‘well prepared’ to discuss climate reporting with their clients, with 67% stating they feel unprepared. By 2028 in Australia alone, an estimated 80,000 companies will be required to report their carbon emissions via mandatory reporting requirements, representing significant prospects for accountants that are able to offer climate reporting services.

Accountants are largely unaware of whether their clients are reporting on emissions or climate disclosures, and 30% of respondents don’t know if their clients will be impacted by mandatory reporting. This is a significant knowledge gap that highlights an urgent need for education and upskilling. Indeed, half of respondents (50%) say that a lack of knowledge and skills represents the biggest challenge to organisations launching climate reporting services.

Joanna Auburn, Co-Founder of Trace, said: “The ripple effect of ESG legislation will reach far beyond direct compliance. If SMEs aren’t caught by legislation directly, they’ll be caught by implication of sitting in the supply chain of a larger organisation. These companies will increasingly look for support with climate reporting, and accountants are well-placed to meet this need.

“Failure to act – to engage, upskill and create new service offerings – represents a real missed opportunity for accountants. They need to get out there and show their client base how they can provide a solution to these emerging reporting challenges.”

Read the complete report here.