Exploring Carbon Management Software: Trends, Challenges, and Opportunities

As the climate crisis intensifies, there is an escalating need for impactful and scalable environmental solutions. With businesses facing increasing demands to quantify and minimise their carbon emissions, carbon management software has propelled to the forefront of technological innovation; according to research firm Verdantix, the carbon management software market attained a valuation of $407 million in 2022, $64 million of which is in the APAC region, and is projected to triple to $1.2 billion in 2028. In this article, we’ll be exploring the carbon management software landscape, shining a light on the latest industry trends, emerging business opportunities and the challenges facing corporates.

5 Emerging Trends in Carbon Management

The surge in adoption of carbon management technologies is driven by multiple factors: climate regulations (including the EU Corporate Sustainability Reporting Directive, California Climate Disclosure Laws), and other TCFD-aligned mandatory disclosures; heightened interest in voluntary reporting with TCFD-aligned and other reporting frameworks; increased pressure from stakeholders and investors; and an uptick in companies delivering on net zero pledges, with over 4000 firms now having approved SBTi targets.

In this rapidly evolving carbon management market, here are the five key trends we have observed:

1. New players securing significant funding

In recent years, the market has seen the emergence of numerous start-ups which have quickly attracted investor attention and secured significant funding in a relatively short time frame.

Leading carbon management software start-ups based on total funding. Source: data compiled from Crunchbase (2024).

2. New products emerging from existing software vendors

Primarily recognised for their other products, some software providers have utilised their existing expertise to create and incorporate carbon management features into their more comprehensive suite of applications. These vendors come from diverse backgrounds, including technology (such as Microsoft and Salesforce), environmental, health & safety (UL Solutions and Sphera), and industrials & utilities (Schneider Electric and ENGIE).

3. Large vendors acquiring specialised entities

Some of the carbon management specialists have caught the attention of large software vendors and service firms. Numerous acquisitions have already taken place with buyers coming from multiple industries, demonstrating the dynamic nature of the market.

Recent acquisitions in the carbon management software market.

4. New industry-specific products emerging

A new wave of specialised solutions has arrived. By having software focus on a specific industry such as apparel, real-estate or transportation, these vendors are able to leverage their experience across their client base and provide more accurate calculations and granular results.

5. Getting out of the carbon silo

Recognizing the interconnectedness of environmental challenges and the holistic nature of sustainability, many carbon management vendors are now integrating features that address broader ecological concerns such as loss of biodiversity, deforestation, and freshwater change.

Smarter Software Unlocking a Multitude of Benefits

The adoption of carbon management technologies represents a golden opportunity to tackle the limitations of spreadsheet-based practices, addressing issues such as calculation errors, labour-intensive processes, opacity in tracking data sources, and a lack of repeatability. Corporates adopting smarter software solutions reap the rewards of significantly increased accuracy, efficiency, transparency, compliancy, collaboration, and scalability.

Challenges for Corporates: Navigating a Complex Landscape

From a business perspective, the burgeoning growth of carbon management technologies presents several challenges. In a heavily saturated market, the first challenge lies in navigating the landscape and pinpointing key players; a time-consuming undertaking for businesses seeking to get a lay of the land.

A crowded carbon management software marketplace.

The second major challenge lies in discerning the unique and overlapping features of various software vendors, not to mention other considerations such as system architectures, data flows, and integrations with existing enterprise information systems. Lastly, some businesses simply lack the necessary skills, methodologies, frameworks, and resources to accurately identify, assess, and choose solutions that are most suitable for their specific needs.

From complexity to clarity: our Carbon Management Technology Advisory Service

To help our clients overcome these challenges, we set up our industry-leading Technology Advisory Service. Leveraging our specialist team of carbon consultants and engineers, we support our clients on their journey toward carbon management digitisation; from strategy and selection to implementation, tracking, reporting, and optimisation. Keen to get an insight into our client onboarding process? Take a look below at some of the questions and stages that we guide corporates through.

  • Strategy & Selection:
  • What are the differentiators and overlaps in terms of capabilities and success factors between carbon management software solutions and other sustainability management technologies like ESG Data Management & Reporting Software and Supply Chain Management software?
  • What are the pros and cons between selecting a turnkey SaaS solution vs. leveraging desktop software or building a custom tool?
  • How will this solution fit into my enterprise information system environment? What are the options in terms of system architectures? What are the data flows to consider?
  • Implementation:
  • How to properly setup the carbon management software solution according to my needs?
  • How to ensure my previous work like GHG inventories is not lost?
  • What kind of training can I expect from RESET Carbon and the carbon management software vendor?
  • Tracking, Reporting & Optimization:
  • How can I use the tool to engage my whole supply chain?
  • How to maximise the value I can generate out of the tool? How to gain efficiency by automating some of the processes?
  • What kind of ongoing support can I expect from RESET Carbon and the carbon management software vendor?

The depth and breadth of the carbon management software landscape demonstrates its profound transformative potential for corporates committed to driving their carbon reduction efforts. If you’re ready to explore carbon management software solutions for your business, our Technology Advisory Service is here to support your ambition.