Carbon accounting is hot new growth area for accountants
Although the future of the controversial Cap-and-Trade bill is in limbo, particularly with a new Congress that might not be as anxious to pass the legislation as the previous group of legislators, many companies have already begun measuring and reporting carbon emissions. California and New Mexico aren't waiting for federal legislation and are initiating their own statewide cap and trade system. The Regional Greenhouse Gas Initiative, a cooperative effort among 10 states in the Northeast, is helping to develop and implement a reduction in greenhouse gas emissions. Other areas of the country are in various stages of regional carbon trading programs.
According to a recent report in the Fast Company Expert Blog",An overwhelming majority of Fortune 500 companies now voluntarily measure, manage, and publicly disclose their carbon emissions." This provides an exciting opportunity for accountants to provide an important service in the growing area of carbon accounting.
A recent article published by the GreenBiz Group, a media company that reports on sustainability, points to a shortage of greenhouse gas (GHG) professionals who can measure, report, and verify emissions. Results of a recent survey of greenhouse gas professionals show that "Most respondents believe GHG auditing has insufficient oversight."
Gillian Marks, principal at The Climate Advisor, speaking last fall at the American Women's Society of Certified Public Accountants/American Society of Women Accountants Joint National Conference (JNC) in Nashville, TN, spoke of President Obama's Executive Order signed in October, 2009, requiring Federal agencies to set a greenhouse gas emission target for the year 2020 with specific energy, water, and waste reduction targets that must be included in the overall plan. The Executive Order requires agencies to measure, manage, and reduce greenhouse gas emissions with a commitment to leading by example.
Lynne McIntosh, president of Excellerate Energy LLC, joined Marks on the podium at the JNC and emphasized the opportunity for accountants to add carbon accounting services to their practice. She suggested that revenue generated by providing carbon accounting services could reach $7 to $9 billion by 2012.
"Just because carbon cap and trade legislation didn't make it through the Senate, it doesn't mean this stuff is dead", said Paul Baier, vice president of sustainability consulting at Groom Energy, an energy consulting and design firm, in an article that appeared in TheStreet.com.
To assist companies with the mission of measuring carbon usage, a new crop of software programs called enterprise carbon accounting (ECA) is showing "explosive growth" according to market research performed by Groom Energy. Groom maintains a vendor list of software companies providing GHG, Carbon, and ECA software programs - so far there are 75 companies on the list. Groom predicts that the purchases of ECA software will increase 600% over the next year.
Last year, the Securities and Exchange Commission (SEC) issued guidance requiring public companies to warn investors of risks that climate change could pose to their business.
Accountants have a two-fold purpose with regard to carbon accounting. Not only are the accounting firms setting goals for themselves, but accountants are primed to serve as advisors to clients who are ready to get busy with carbon accounting. Taking sensible steps toward conserving energy is the starting point - an obvious one because it can save a company money. Moving into the field of carbon accounting, where carbon emissions are actually charted and measured is the direction in which we all are headed. Getting ahead start today could position accountants for a lucrative career move.