Climate reporting demand catches 67% of accountants off guard

As the climate crisis accelerates, the world is shifting towards transparency in carbon emissions. With mandatory climate reporting set to impact an estimated 80,000 Australian businesses by 2028, and similar regulations anticipated in the UK this year, accountants find themselves at the epicentre of change.

The “Climate Reporting Revolution: The Future of Accounting” report underscores a profound reality: the accountancy profession has a vital role in guiding businesses through this transformative landscape.

Pressure is mounting from multiple directions—regulations, supply chains, and growing consumer awareness. For instance, the UK’s NHS requires suppliers to present Carbon Reduction Plans covering Scope 1, 2, and Scope 3 emissions. While large corporations lead the charge, small and medium enterprises (SMEs) are increasingly drawn in by supply chain demands.

“46% of UK organisations have been asked for carbon data in the past year,” says Joanna Auburn, Co-Founder of Trace. “The demand is there. The opportunity is yours.”

The Readiness Gap

The accounting industry’s readiness to address climate reporting falls significantly short of the opportunities. The report reveals a striking gap in preparedness:

• 67% of accountants feel unprepared to discuss climate reporting with clients.
• 30% are unaware of whether their clients will be affected by mandatory reporting.

This unpreparedness stems from a lack of skills and awareness, which 50% of respondents cite as the biggest barrier. Smaller firms face particular challenges, but even larger firms have not fully leveraged their resources to address the need for climate-related services.

Moreover, the disconnect between accountants and their clients’ needs is stark. While 94% of respondents believe fewer than 5% of their clients currently report carbon data, external evidence tells a different story.

The UK Business Climate Hub reports that 46% of businesses have received requests for such data within the past year, highlighting the urgent need for accountants to bridge this gap.

As Tamara Somers from Xero points out, “Small businesses are facing mounting pressure from their supply chains to provide credible carbon emissions data. It’s important to remember that even when regulations don’t apply directly, small businesses may need to respond to requests from their customers to avoid being locked out of business opportunities.”

Opportunities for the Accounting Industry

Despite the barriers, the rewards for early adoption are significant. The report reveals that:Beyond financial gains, climate reporting presents a chance for firms to position themselves as strategic advisors. Emmeline Skelton, Head of Sustainability at ACCA, highlights this broader role: “Sustainability reporting offers more than just compliance—it’s a chance to create value and shape resilient, future-ready organisations. Accountants have a unique role to play, helping to balance complex trade-offs, strengthen supply chains, and align performance metrics with sustainability goals.”

Clients are actively seeking these services. Simmons notes, “A lot of our work is with small-to-medium businesses that are either looking to embark on their ESG journey because they know it’s the right thing to do, or are now seeing the demand from their clients and supply chains seeking to report on their own carbon footprint.”

What Needs to Change: The Road Ahead

The report outlines an eight-step roadmap to help accountants overcome barriers and deliver climate reporting services effectively. These steps include:

1. Appoint an Internal Owner: Identify a project lead who understands client needs and can champion climate reporting initiatives within the firm.
2. Upskill Your Team: Equip staff with the knowledge required to engage clients confidently. Leveraging resources like Trace’s free Fellowship programme can be instrumental in building expertise in carbon accounting and mandatory reporting requirements.
3. Segment Your Client Base: Analyse your client list to identify those most impacted by regulations or supply chain pressures. This targeted approach allows firms to prioritise clients and craft tailored strategies.
4. Gain Internal Buy-In: Present a compelling business case to leadership, emphasising return on investment and market demand.
5. Define Service Offerings: Determine which services, such as carbon accounting or decarbonisation planning, will be handled in-house and which require external partnerships.
6. Build Strategic Partnerships: Collaborate with software providers, ESG advisors, and training specialists to enhance service delivery.
7. Develop a Go-to-Market Strategy: Establish pricing, refine service offerings, and educate clients through workshops and campaigns.
8. Launch and Refine: Pilot climate reporting services with select clients, gather feedback, and scale operations based on initial successes.

As Trace’s Co-Founder Joanna Auburn points out, “Demand starts with education, and awareness breeds action. By reframing carbon reporting as a strategic opportunity and showing the benefits of early action, accountants can create urgency and position themselves as trusted guides.”

Broader Implications for the Industry

Climate reporting represents an inflection point for accountants. The accounting profession’s future relevance hinges on its ability to meet rising client demands for carbon data, supply chain disclosures, and sustainability assurance.

This is more than regulatory compliance; it’s a shift in client expectations. As Emmeline Skelton of ACCA puts it, “Sustainability reporting offers more than just compliance—it’s a chance to create value and shape resilient, future-ready organisations.”

For accountants, the question isn’t if but how to adapt. The expertise required goes beyond financial acumen. Firms must now address the operational, reputational, and strategic risks tied to climate accountability. Clients want advisors who not only understand the numbers but can translate them into decisions that secure contracts, manage risk, and meet stakeholder expectations.

In this evolving landscape, hesitation is costly. As Natalie Simmons of Prime Financial warns, “The barriers to climate reporting can be high for SMEs… If accountants don’t step in to break the complexity into manageable chunks, clients will look elsewhere.”