Following a landmark year of global regulatory changes in climate-related risk disclosures, many businesses will find themselves woefully unprepared for reporting requirements that they have not previously faced. This year promises to be another milestone year for emissions reporting around the world as large organisations become mandated to report and start to cascade carbon data requests throughout their supply chain.

While mandatory disclosures typically impact only large or listed businesses, millions of SMEs will be affected by implication.

Not only do SMEs play a critical (and carbon intensive) role in the supply chain of big businesses who are now seeking carbon reports from their suppliers, but they also account for more than 50% of global emissions. They are in desperate need of guidance to navigate this new area to ensure that they stay compliant and join the decarbonisation movement.

As trusted business partners and a deep understanding of the financial data used to calculate a business’ carbon emissions, accountants are uniquely placed to help their clients on the journey to Net Zero. The core accounting skills of rigour, data capture, analysis and reporting are directly applicable to the process and make it an easy addition to the service list.

For over four years, Trace has been empowering accounting firms with technology and expertise to drive credible carbon reporting and climate action and we now work with over 100 accounting firms to power their carbon accounting capabilities. Crucially we also help accounting firms to understand their own footprint and decarbonisation opportunities. Our platform uses expenses and other business data to power credible carbon reports and climate action, and features seamless integration with Xero.

Why now?

In 2023, the International Sustainability Standards Board (formed by the IFRS) released its landmark standards to simplify and unify sustainability reporting for stakeholders around the World. Over the last 12 months, over 25 countries have adopted these standards, mandating that affected companies must publicly disclose their climate related risks, including carbon emissions.

The Australian Treasury is initiating mandatory climate-related disclosures starting in January 2025, beginning with the largest companies and expanding to an estimated 20,000 companies by 2028. This move underscores the government's commitment to enhancing environmental reporting standards and driving climate action across industries.

In January 2023, New Zealand’s Ministry for the Environment introduced mandatory annual climate statements, starting with companies meeting the Climate Reporting Entities (CRE) criteria. This initiative kickstarts the promotion of transparency and accountability in emissions reporting, setting a precedent for robust environmental disclosures in the region.

The UK's Streamlined Energy and Carbon Reporting (SECR) policy mandates organisations to disclose energy use and carbon emissions in their annual reports. Additionally, new requirements from the National Health Service (NHS) will come into effect in April 2024, extending carbon reduction plan requirements to all new procurements. These measures reflect the UK's commitment to tackling climate change and driving sustainable practices across public and private sectors.

It really is a global shift, with the EU, Canada, Singapore and the US also announcing mandatory climate disclosures coming into effect over the next few years. Hot in the news at the moment is the U.S. Securities and Exchange Commission’s (SEC) new rules to enhance and standardise climate-related disclosures by public companies and in public offerings. Acting ahead of the Federal Government, several U.S. states, such as California and New York, have already individually implemented or proposed legislation requiring companies to disclose climate-related information in their annual reports or financial filings.

How to Get Started:

Sign up for the forthcoming Webinar

Attend one of the upcoming webinars "Future-Proof your Practice with Carbon Accounting," hosted by Trace and PrimeGlobal to learn more about this opportunity:

June 19, 2024 4:00 PM - 5:00 PM CET/ 10:00AM - 11:00AM EST

July 03, 2024 12:00 PM - 1:00 PM AET

Upskill Your Practice

Attend Trace’s Carbon Accounting Fellowship program to develop and launch your carbon accounting services. Register your interest here.

Lead by Example

Measure your firm's carbon footprint and design a decarbonization strategy with Trace, demonstrating your commitment to sustainability. Please visit this page to get started.

Engage Your Clients

Inform clients about upcoming regulatory changes and their implications, positioning your firm as a trusted advisor.

By following these steps, firms can gain the competitive edge and position themselves as leaders in sustainability, unlock new revenue streams, and drive positive environmental outcomes.

Join us in shaping the future of accounting by registering your interest in carbon accounting services through our partnership with Trace. Trace offers a comprehensive three-part Fellowship program to upskill your team and bring carbon accounting to your business.

To get updates from Trace on how these regulatory changes could impact your clients, sign up here.