US climate rule will boost sustainable accounting industry
By Ross Kerber
(Reuters) — New U.S. climate-disclosure regulations should boost demand for services of the Big Four accounting firms and more specialized reviewers, and could sharpen a rivalry between the two camps, executives and analysts said.
The U.S. Securities and Exchange Commission (SEC) on March 6 approved a new rule for public companies to disclose emissions and other climate-related details. The SEC estimates the rule will increase spending by filers on external service providers like assurance firms by as much as $907 million a year, an 18% increase over current levels.
Republicans including SEC member Hester Peirce have cited higher costs in arguments against the new rule, which also faces court challenges. Even if those succeed, new requirements in California and Europe will boost audit and accounting firms that will prepare emissions data and other climate-related information sought by investors.
«We anticipate more and more that our clients will be asking us for help» preparing so-called 'attestation' reports required under the new climate-disclosure rules, said Amy Brachio, global vice chair for accounting firm Ernst & Young.
She said further that EY and other big audit firms could have an edge because corporate financial officers will now be responsible for climate reports and are used to working with firms like hers. Currently much of the emissions reporting is overseen by corporate chief sustainability officers.
Chief financial officers and others are «very used to working with the Big Four,» she said.
Many companies already disclose some version of this information in voluntary sustainability reports and often hire firms to provide «assurance» for some of their numbers. In this space specialized firms
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