Carbon Accounting Software Market – Demand Drivers

Carbon accounting software market continues to be “regulatory driven”

In an Interview with Third Bridge Forum, the specialist said the current global market size for carbon accounting technology is USD 6-10bn, with a growth rate of 15-40%. Approximately 20,000-30,000 large businesses and SMEs worldwide report their carbon emissions, we were told. Of those companies, the specialist said 30-50% of large businesses use carbon accounting software tools, with 10-15% penetration rates for SMEs. 

The specialist said the remainder use Excel or consultants to capture data. But they expect more to switch to SaaS tools as regulations increase and as more companies discover the cost savings of SaaS tools compared to consultants.

We also heard that scope one emissions data is largely “commoditised” but that there are nuances across different industry verticals. The specialist told us scope 3 emissions data is the “biggest challenge” to collect but that it is the strongest area where companies involved in carbon accounting software can differentiate between competitors. 

The specialist told us that Persefoni, Watershed and Emitwise are the largest carbon accounting software vendors in Europe. We heard all three are well funded and have deployed capital on honing products, hiring talent and marketing. The specialist said that the emergence of SAP, Microsoft and Salesforce in carbon accounting software offers some opportunities for smaller players. 

However, their presence is also likely to consolidate the market further, according to the specialist, and potentially push smaller companies out – especially as carbon accounting software becomes more “mainstream”. 

Click here to access all the human insights in Third Bridge Forum’s “Carbon Accounting Software Market – Demand Drivers and Vendor Competitiveness” Interview.

* FT