Young Climate Warriors Could Be the Key to Accounting’s Future

There seems to be a disconnect between a younger population that wants to be at the forefront of fighting climate change and the desirability to pursue a degree in the accounting profession that is on the frontlines of advising businesses to take action to decarbonize the American economy.

Danny Werfel addressed this disconnect on the one-year anniversary of his confirmation as IRS commissioner. In remarks delivered at American University in March, he urged students to consider working for the IRS to help fight climate change, noting that “tax laws are increasingly playing a larger role in addressing the most pressing challenges of our time.”

Public accounting firms are echoing Werfel’s recruiting pitch. In April, as part of its “Gamechangers in Sustainability” series, American University Kogod School of Business hosted EY Global Chair and CEO Carmine Di Sibio urged students to apply to the accounting and consulting firms to work with businesses looking to adopt sustainable practices, noting how fast EY’s sustainability practice has grown in recent years. He was accompanied at the event by on-campus recruiters ready to meet prospective employees.

Students are receptive to recruiting that emphasizes the ability to impact climate change through business or finance strategies. Sustainability graduate programs in business schools continue to gain in popularity with new programs entering the market every year.

At the same time, many aren’t connecting the dots between sustainability and accounting and tax workforce shortages. Not enough management in sustainability curriculums are including necessary tax content. While some programs focus on accounting disclosure rules, that’s only one (smaller) part of the overall strategy to infuse funding into sustainability project financing.

The accounting profession is facing a severe crisis triggered by fewer students choosing to study accounting. Meanwhile, business is booming for accounting firms and their consulting practices, and the IRS continues to actively hire more employees for roles ranging from IT to auditing to customer service.

The higher demand for workers with accounting and tax specialties in both the public and private sectors is connected to the Biden administration’s decision to push much of its climate change agenda through the US tax code.

Starting with the 2021’s American Rescue Plan, the White House repeatedly had turned to legislating through the tax system as well as using its regulatory authority—rather than congressional appropriations—to make good on promises to voters.

Nowhere is this more apparent than with the Inflation Reduction Act of 2022, which included, among other spending, about $270 billion of clean energy and green economy tax provisions as well as an additional $80 billion in supplemental IRS funding for long-overdue IT modernization and new hires. Members of Congress view the tax-and-climate law as “predominantly a tax incentive bill that extended and expanded federal tax incentives to decarbonize the US economy.”

The US stands out in its approach to combat climate change primarily through tax incentives. Even as climate change scientists debate whether these moves will achieve the Biden administration’s targeted goal to reduce net greenhouse emissions by at least 50% by 2030, there’s no question that accounting and tax experts on the frontlines of advising impacted businesses are scrambling to keep pace with, and take advantage of, the new tax and accounting disclosure rules this climate change strategy entails.

Just keeping up with the daily onslaught of tax guidance, and corresponding planning opportunities they present, is generating billions in revenue for firms advising impacted clients. In 2023, the Big Four accounting firms generated more than $200 billion from their clients—a significant jump from previous years.

At least some of that revenue growth in the US is being driven by clients looking to take advantage of opportunities set forth in the Biden administration’s climate change strategy. Since 2022, IRS and Treasury have worked to administer and provide guidance on 34 clean energy provisions and to update to IRS.gov so taxpayers can register for a clean vehicle or elective payment/transfer election account.

While the government, as well as tax and accounting firms, are working in real time to implement the Biden administration’s climate change strategy, they are hamstrung by a workforce shortage that appears to be enduring.

Too few business schools are offering comprehensive accounting and tax classes that could enable this next generation to fight climate change in the boardroom and through public filings. It’s time for them to bridge the gap, change with the times, and ensure a strong future for the accounting profession.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Caroline Bruckner is a tax professor at American University Kogod School of Business and managing director of the non-partisan Kogod Tax Policy Center.

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