Key takeaways

• The proposed regulations on climate-related disclosures for public companies are likely to get delayed, as the SEC has not met the April deadline to finalize and publish the regulations. The SEC's initial plan was for the rules to be effective from February 2024.  

• The Carbon Management Software (CMS) industry had a mixed quarter. Despite YoY and QoQ increases in funding, partnership activity dropped both YoY and QoQ. Also, neither disruptors nor incumbents launched any new products during the quarter. 

• Of the seven partnerships observed during the quarter, disruptor collaborations with BigTech players Amazon and Google, JetBlue airlines, and EV battery maker StoreDot remained notable.

• There was one notable acquisition by Xpansive (compared with none in the previous quarter). 

• Eight CMS companies raised a total of USD 314 million in disclosed funding during the quarter with Xpansiv’s USD 125 million and IntegrityNext’s USD 109 million being the only rounds larger than USD 100 million (compared with none in the previous quarter). 

• The short- to medium-term outlook for the industry remains positive with the forthcoming implementation of mandatory climate disclosures for public companies. Despite a probable delay in implementation, the new legislation is expected to drive demand for B2B carbon management solutions, which, in turn, is expected to accelerate industry growth and encourage new CMS startups and products.