At a glance
- Climate rules will affect SMEs via supply chains and finance expectations.
- Accountants can offer new services like GHG emissions accounting and strategic advice.
- Upskilling now can differentiate your practice and open new revenue streams.
For accountants already wrestling with a towering stack of compliance tasks, Australia’s new mandatory climate reporting might seem like just one more.
But you might want to think again. This new wave of regulation presents opportunities for accountants – especially those keen to diversify their skills, develop their relationships with existing clients and expand their businesses.
How climate reporting rules impact Australian SMEs
The new regime of climate-related financial disclosures will at first capture only Australia’s corporate behemoths. But by 2027, many more firms will be brought into the fold. They will need to report on climate risks and opportunities under a new set of rules, the Australian Sustainability Reporting Standards (ASRS).
The reporting rolls out in three stages:
- Group 1: The largest companies start reporting from January 2025.
- Group 2: Medium-sized entities start reporting from July 2026.
- Group 3: The final stage starts on July 1, 2027. The requirement will then apply to businesses meeting two of three criteria:
- consolidated revenue of $50 million or more;
- consolidated gross assets of $25 million or more; and
- 100 or more employees.
That rollout may seem to leave small and medium-sized enterprises (SMEs) in the clear. They don’t meet these criteria; why should mandatory climate reporting matter to them?
But experts suggest SMEs will feel the real impact through a kind of trickle-down carbonomics.
“SMEs are increasingly affected through supply chains and financing expectations,” says Laura Reed of Edge Impact, a global consultancy.
A large construction firm, for instance, must now report on emissions from its entire value chain (“scope 3” emissions in the jargon of climate reporting). Suddenly, it needs data from its concrete suppliers, its electricians and its haulage contractors. The small supplier that can provide this data will keep the contract. The one that cannot may find itself replaced.
What climate-related services do SMEs need?
For accountants, this disclosure regime may represent a new step on the road from financial reporting assistant to business adviser. The regime will require accountants to understand and interpret climate-related disclosures, says Coco Hou, CEO of Platinum Accounting Australia. Hou argues accountants must be ready to guide clients through the disclosures’ implications for risk, reputation and access to capital.
Consequently, SMEs are looking for a variety of services.
Often, says Reed, the first step is providing guidance on regulatory requirements and reporting standards.
From there, accountants might be asked to help with identifying and measuring their clients’ greenhouse gas (GHG) emissions. This investigation should cover all aspects of operations – extending, where relevant, to the client’s supply chain.
Next comes the process of determining how climate-related concerns impact the wider business.
This may include consideration of climate-related risks, opportunities, targets and plans, as well as resilience assessments based on analyses of various scenarios, and relevant governance.
“Those who develop skills in mandatory climate reporting can differentiate their services in a growing field with few experts.”
Laura Reed, Client Partner & Governance Lead, Edge Impact
“Accountants might provide guidance on the integration of climate-related issues into financial planning and risk management,” says Reed.
“And they might assist with setting emissions reduction goals and tracking progress.”
All this information will feed into the reporting process, the extent and nature of which varies from business to business.
“SMEs might ask accountants to support them with preparing disclosures for supply chain partners, investors, lenders or customers,” says Reed.
Whichever services an accountant offers, it’s essential that their approach is practical and scalable, says Hou.
“Accountants are well-positioned to demystify processes and translate them into tailored, commercially relevant guidance that helps clients meet rising expectations without overwhelming their resources.”
Upskilling for ASRS: key steps for accountants
Accountants can focus on developing their expertise in three main areas: regulatory knowledge, emissions accounting and strategic advisory work.
When it comes to regulatory knowledge, it’s important to gain a working understanding of reporting standards, such as the ASRS and the IFRS Sustainability Disclosure Standards.
Becoming familiar with greenhouse gas accounting methodologies, such as those supplied by the GHG Protocol, is also crucial.
To add credibility and capability, accountants should consider certification, says Hou.
Many bodies offer courses, including the Australian Institute of Company Directors, the Global Reporting Initiative and the International Financial Reporting Standards Foundation.
However, earning a single certificate isn’t enough. Remaining competitive requires committing to learning on an ongoing basis.
“Staying ahead of evolving standards and sector-specific expectations will be critical, especially as climate regulations become more integrated with financial disclosures,” says Hou.
This can be achieved by attending industry briefings and webinars, and staying connected with professional bodies.
Practical steps to climate reporting expertise
“Now is the time for accountants, especially those who work with SMEs, to upskill and lead the way,” says Reed.
“[Those] who develop skills in mandatory climate reporting can differentiate their services in a growing field with few experts, and open new revenue streams in assurance, reporting, and advisory.”
On one hand, this can lead to stronger relationships with current clients in need of strategic sustainability advice.
On the other, it can help accountants to future-proof their careers, as sustainability and finance increasingly intersect.
“[This is] a chance for accountants who work with SMEs to become valued partners in their clients’ growth journeys — to reposition themselves as advisers who help assess risk, secure investment, strengthen supply chain credibility, and align with customer or lender ESG expectations,” says Hou.
“As climate regulation intensifies and expectations cascade down supply chains, the accountants who step up will be in high demand, not just for compliance, but for leadership in a low-carbon economy.”
Give yourself a solid foundation with IPA’s Introduction to Sustainability Reporting CPD webinar.
