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Carbon Management Software
Overview
A new set of technology-based solutions are proving effective at managing the carbon footprint of a wide range of users. Global warming leads to new record temperatures year after year and greenhouse gas (GHG) emitting human activities are directly responsible. Current GHG emission levels must be halved by 2030 and net-zero emissions must be reached by 2050 to contain global warming at a sub-catastrophic level. The rapid commercialization of carbon management solutions is vital to quickly decarbonizing the economy within this decade.
The US SEC climate disclosure rule, aggressive net-zero emission targets, and the growing number of environmentally conscious consumers drive the industry. However, shortcomings in disclosure regulations and the growth of renewable energy pose risks to the industry.
Industry Updates
Market Sizing
The US market for Carbon Management Software could reach USD 7.0 billion–10.8 billion by 2028
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Use cases
Use cases for carbon management software solutions are primarily in IT services and software applications, helping companies with carbon offsetting and carbon credit management. Carbon management software is also being explored in the financial and industrial sectors. These sectors have higher adoption for carbon offsetting use cases, including the sale of biochar carbon removal (BCR) credits and SAF programs.
We have identified key carbon management software use cases below:
Market Mapping
The majority of startups in the business-to-business (B2B) segment offer carbon intelligence solutions, and there is a strong presence of non-software offsetting players in this space. Meanwhile, the business-to-consumer (B2C) segment has many carbon offsetting startups, with a lack of monetization opportunities for pure-play carbon intelligence companies.
B2B Carbon Intelligence: Internal
B2B Carbon Intelligence: Supply Chain
B2B Carbon Offsetting
B2C Carbon Intelligence
B2C Carbon Offsetting
Carbon Marketplace
The Disruptors
The industry has seen an increase in capital infusion, with more than half of the carbon management software disruptors having raised USD 10 million in funding, spurred by the US SEC climate disclosure rule and aggressive net-zero emissions targets. Several non-listed disruptors, including Ecovadis and Xpansiv, have raised over USD 500 million.
Funding History
Competitive Analysis
Incumbents
Most incumbents offer B2B carbon intelligence software as a cross-sell and up-sell opportunity to complement their existing enterprise solutions, leveraging their in-house experience and capabilities. These companies have the advantage of already possessing vast amounts of data related to their customers’ operations, enabling them to offer broad, comprehensive, and turnkey carbon intelligence solutions across the value chain.
Native, a notable exception, is the only traditional offset player to offer carbon management software. The presence of large incumbents in the carbon offset space remains limited, although traditional (non-software) carbon offset companies that already sell carbon offsets online have the potential to expand into software solutions in the future.
Notable Investors
