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Unlocking New Revenue: How Accountants Can Turn Carbon Reporting into a new service line

30 January 20253 min read
Guest Insights
Guest blog: Unlocking New Revenue: How Accountants Can Turn Carbon Reporting into a new service line

As sustainability regulations tighten and stakeholders demand greater ESG credentials, businesses are increasingly facing  a new challenge: carbon reporting.

According to the UK Business Climate Hub (1), 46% of organisations in the UK and 37% of SMEs have had a request for carbon data in the past 12 months. Larger companies are gearing up for forthcoming mandatory reporting legislation, and smaller companies are contending with their own looming requirements. Even if companies escape direct regulation, they will still be caught by implication of sitting within a corporate supply chain. Already in the UK, for example, NHS procurement activities require a Carbon Reduction Plan (CRP) covering Scope 1, 2, and relevant Scope 3 emissions.

Many companies – especially SMEs – will struggle to meet these requirements due to the complexity of the data, or simply because of a lack of time and resources. Therefore, as accountants already have the access to financial data, professionalism and advisory skills needed to manage carbon reporting, the industry has a valuable opportunity to support their clients in this area, and in the process create new revenue streams alongside a growing carbon accounting market, which is projected to grow by 22.9% annually over the next five years.

Leveraging carbon accounting software can unlock this opportunity for accountants, enabling them to help their clients measure and report on emissions, and build decarbonisation strategies. However, new research from climate reporting platform Trace reveals that the accountancy industry is largely unprepared to do so, despite acknowledging the benefits of offering such services.

The report, Climate Reporting Revolution: The Future of Accounting (2), shows that 96% of accountants recognise that offering climate reporting services would yield important benefits, such as new revenue streams, an enhanced reputation, competitive advantage and increased customer retention.

However, it also reveals that 67% of accountants feel unprepared to assist clients in carbon reporting, while 30% aren’t even sure which of their clients will be affected by mandatory reporting - indicating a gap in knowledge.

Accountants can hasten demand through client education.

  • Awareness breeds action: Many businesses are still unaware of the scope and impact of these regulations. By educating clients, accountants highlight the urgency and necessity of preparation, prompting them to take action.

  • Framing the value proposition: It's not just about compliance. Educating clients on how climate reporting can improve risk management, attract investors, and unlock new opportunities reframes it as a strategic initiative, not a burden. This creates demand for advisory services to help them capitalise on these benefits.

  • Building trust and confidence: Climate reporting can seem complex and daunting. Accountants who proactively educate clients position themselves as trusted advisors, building confidence and generating demand for their expertise in navigating this new landscape.

  • Early mover advantage: By emphasising the benefits of early adoption, accountants can create a sense of urgency and encourage clients to proactively prepare for climate reporting, giving them a competitive edge.

Essentially, educating clients transforms climate reporting from a compliance exercise to a strategic opportunity. This shift in perspective drives demand for accounting services that go beyond basic compliance, encompassing advisory, forecasting, and value creation.

Accountants that create this demand can then use platforms, such as Trace, to complete carbon footprints for clients, build carbon reports, upskill teams, and diversify their revenue streams. Trace provides go-to market support, carbon accounting training, pricing advice and commercial collateral, designed to get your business ready to serve the carbon accounting market. For more information, visit our-trace.com.

(1) https://netzerocensus.co.uk/

(2) Climate Reporting revolution - The Future of Accounting