The 2024 tech landscape of carbon accounting
Disclaimer: This article is based on personal observations from this past year, drawing primarily from English, German, and French news sources, thus reflecting a partial perspective and regional focus. I also didn’t research much PCF and LCA-specific products for this piece.
Overview of ecosystem growth and key trends
We’ve witnessed quite some shifts in the ecosystem this past year as new environmental regulations took hold globally. The Corporate Sustainability Reporting Directive (CSRD)‘s first wave of reporting obligations kicked off, making greenhouse gas (GHG) emissions a new reporting KPIs for many businesses and bumping sustainability reporting up in the list of corporate priorities. This regulatory trend strengthened the demand for self-service solutions, with a growing interest in compliance and carbon accounting tools. At the end of 2024, we’re in front of a quite competitive and crowded solution market.
This article presents some of the trends of the last 12 months, including clearer player categories, funding, partnerships, mergers and acquisitions, as well as expansions into new regions. Among the key takeaways, we can note that:
- Market landscape: Over 160 carbon accounting pure players vendors are competing alongside ESG solution providers, ERP tech giants like SAP and Oracle, and enterprise software with emissions reporting capabilities.
- Product trends: Companies quickened to launch new products and features, responding to industry challenges (Scope 3 accounting, decarbonization planning, regulatory compliance) or technological trends (generative AI).
- Funding in 2024: Carbon accounting companies raised €270M, with Series A rounds making up €75.85M. Major deals included Greenly, Scope3, and Watershed securing over €170M.
- Acquisitions and partnerships: Increased consolidation motions, with partnerships between carbon accounting firms and ESG vendors.
Growing groups of carbon accounting players
The carbon accounting ecosystem is roughly made of four distinct groups. Thibault Boiron proposed a good overview of it last year, but basically, we find:
- Carbon accounting and management software vendors
- ESG and sustainability management solution vendors
- ERP and tech giants with carbon accounting products
- Enterprise solutions with emissions accounting capabilities
The carbon accounting companies are startups, often VC-backed, developing since the late 2010s purpose-built solutions for emission calculation and reporting (and sometimes reduction). Growing steadily in the last 4 to 5 years, the group counts over 160 pure players.
→ I’ve listed all the ones I could identify in this online database.
In an adjacent bucket, we find ESG, or sustainability, software solutions. Developed since the mid-2010s, these companies integrate carbon tracking alongside broader environmental, social, and governance (ESG). There is more heterogeneity in this group, with a variety of profiles, from large consultancy boutiques with proprietary software to younger SaaS startups. While some of these companies had built in carbon accounting capabilities from the start, many have developed ad-hoc features more recently, resulting in important variations in feature maturity.
The ERP and tech giants are well-known categories. Here, we find carbon accounting solutions (sometimes part of ESG suites) from SAP, Oracle, Google, Microsoft, Alibaba, IBM, Salesforce, Nasdaq, or Sage.
Finally, we find enterprise toolings for diverse business operations that introduced carbon accounting capabilities to their product. From energy management solutions, building or supply chain management tools, compliance and procurement software to transport management, hundreds of business solutions are starting to allow users to report on specific emission Scopes.
Who were the new carbon accounting players in 2024?
Compared to the flurry of new companies of 2021 and 2022, there haven’t been as many new pure players recently, as building such tools demands a solid technical foundation in carbon accounting methodology. Among the few new startups, Climate Vault announced in March the launch of its accounting platform after raising initially 9,4m$ in 2023 and a seed round of 2.5$m this year.
However, faced with companies’ demands for more autonomy, we have seen several consulting boutiques launch their own tools. This is the case of the climate consultancy CBN Expert and their Notch tool, or South Pole, which announced its tool Luumo in June.
The demand for all-in-one ESG reports has pushed certain players to introduce carbon accounting features. Some sustainability solution sellers completed their offering with footprint calculation capabilities this year. Workiva launched Workiva Carbon, a rebranded module of Sustain.Life, acquired earlier in the year for 100$m. Seneca ESG announced AERA, a carbon accounting product, and its CSRD new offering.
This trend checks in with the rise of white-label tools, like Avarni’s, Green Project Technologies’, or Kabaun’s, or carbon accounting APIs like Klimahelden’s or Climatiq’s API, which went out of Beta in February.
ERP giants and enterprise business solutions also competed for their share of the carbon accounting market. Piloting it since 2023, SAP announced the availability of SAP Green Ledger, with the explicit intention of moving carbon accounting closer to financial accounting. Oracle Fusion Cloud Sustainability also launched in September. More broadly, there’s been a growing movement to embed sustainability into business operations, as exemplified by ERP provider Optima’s announcement of the integration of carbon accounting capabilities within its products.
Which features made it to product roadmaps?
This year, product managers have shown increasing interest in tools for collecting and calculating Scope 3 emissions, for Product Carbon Footprint in specific sectors, and in helping companies meet regulatory reporting requirements. Generative AI features have also made an expected debut.
Several pure players have shared product updates on supplier engagement modules, such as Optera or CarbonChain, highlighting improvements in data requests, processing, and validation capabilities. Given the complexity and scale of Scope 3 data collection, ESG consultancies have unsurprisingly begun offering hybrid solutions, as seen with Bloom.
Faced with the pressing need to deliver real solutions to the Scope 3 data collection conundrum, we’re seeing increased activity from ESG and supply chain management vendors, who are positioning themselves in the emerging sustainable supply chain category (see the latest Verdantrix report). For example, after acquiring Supplyshift in January, Sphera introduced its Supply Chain Transparency product with a Scope 3 data collection feature. Other key players, like EcoVadis and Amazon AWS, have also introduced supplier engagement solutions, with AWS rolling out a supply chain sustainability module earlier this year.
We didn’t get any big implementation surprises on the generative AI trend. As expected, tech giants started to equip their solutions with their proprietary generative AI technologies. Microsoft Cloud for Sustainability gained Microsoft Copilot capabilities, and Sage Copilot is expected to be added to Sage Earth. While we saw some branding around “AI-powered carbon accounting,” the use cases currently boil down to tools incorporating AI for data extraction, auto-matching of emission factors, anomaly detection, knowledge assistants, and reports generation.
As for many companies, a key focus for vendors this year has been regulatory compliance. Waves of new requirements, such as CSRD, CBAM, and the EU ETS expansion, have prompted companies to prepare for upcoming regulations like the CSDDD, ISSB, and various product-specific mandates.
In response, solution providers have adapted their offerings, rolling out CSRD compliance features with varying levels of maturity. Enterprise vendors have packaged and launched CSRD modules, such as Normative, Watershed, or Plan A, or built specialized features like Greenly’s Double Materiality Assessment. Vendors catering to the manufacturing sector have also adjusted, with offerings like CarbonChain’s new Comply module for CBAM reporting.
Partnerships trends in 2024
In recent years, we have seen companies move away from the 100% consulting model, which was a very black box and expensive. However, the complexity and specificity of carbon accounting, along with the frequent lack of in-house resources, have kept consulting services essential. As a result, partnerships with consulting firms continued to flourish. For instance, Salesforce introduced Coforge ENZO, a dedicated offering of its Net Zero Solution with consultancy Coforge. Just before its acquisition, Sustain.Life also announced a partnership with SCS Consulting Services.
We have also seen a significant consolidation of capabilities between ESG and carbon accounting vendors. For example, Persefoni partnered with ESG/Risk management platform AuditBoard, while Cozero teamed up with ESG software vendor Sunhat. Other collaborations like those between Scope3 and 51toCarbonZero, announced in May, and the partnership between energy management software vendor SystemsLink and Notch further complete this trend.
On the industry side, we’ve also witnessed several partnerships focused on carbon reporting offerings. Several institutions have formed partnerships in the financial sector, driven by the desire to improve portfolio risk assessment and attract green financing for clients. For example, HSBC teamed up with Greenly, Visa announced it was now working with Plan A, and Xero is partnering with Sumday.
Funding trends in 2024 for carbon accounting tech
According to PwC’s report, State of Climate Tech 2024, investments in the ClimateTech sector have declined since the peak of 2021. 2024 continues this trend, with a decrease in deal size and funding flows from venture capitalists (VCs) and private equity firms. However, smaller investments remained active throughout 2024, supported by two or three large funding rounds for more mature-stage companies.
From my research, carbon accounting pure players raised at least €178M in 2023 and ~€270M in 2024. Series A rounds accounted for a significant portion of this funding (€75M). The trend reflects a continued interest in companies with a proven product-market fit but still needing additional funds to scale and develop their offerings. Seed stage investments also persisted, with €17.84M raised in 2024 (compared to €23.1M in 2023), signaling ongoing support for emerging vendors.
The german and the US markets stood out, with numerous companies securing funding in 2023 and 2024, while the UAE showed early signs of growing interest in the sector. A handful of Series B and C rounds took place, with Greenly, Scope 3, and Watershed collectively raising over €170M this year.
Acquisitions
The ecosystem maturing and expanding has led to a rise in acquisitions and partnerships within the sector. Three key trends are emerging in acquisitions:
- ESG vendors and climate consultancies acquiring carbon accounting providers
In February, ESG consultancy WAP Consulting acquired Atmos AI. Later in May, ESG provider Tennaxia acquired Traace and Singabore-based Levelup ClimateTech acquired UK-founded Zevero.
- Other vendors (e.g., compliance-focused or supply chain management) expanding into carbon accounting
For example, compliance software provider ISS-Corporate announced its acquisition of SustainaBase in October, and Supply Chain Risk Management vendor ApexAnalytix acquired former partner ESG Enterprise.
- Strategic acquisitions to support market entry
Normative, for instance, announced its acquisition of Eivee and its intention to expand its activity in the Nordics. Larger tech players also invested in solutions, such as reporting platform Workiva, which bought Sustain.Life in January.
What can we expect in 2025?
The carbon accounting market is set to continue its growth, with several key developments on the horizon. New markets will likely introduce regulations that create fresh demand for carbon accounting solutions.
For example, the UAE’s newly passed carbon credit law will likely generate new customers, initially from high-emission industries, and some vendors are already positioning themselves to meet this demand. Other regions will either strengthen or attempt to harmonize their regulatory frameworks, as seen with the UK’s Sustainability Reporting Standards (UK SRS), which aim to professionalize corporate reporting activities.
Product-wise, we could see a clearer categorization appear between compliance-focused solutions (offering turnkey reporting capabilities, AI-generated reports, and partnerships with ESG solutions or auditors) and other more data-driven solutions, proposing solutions and integrations around the collection and intelligent analysis of data (with sector-specific solutions and tools that integrate a little more along the supply chain).
With decarbonization reporting becoming a legal and market imperative, we may see more vendors incorporating decarbonization tracking into their offerings. Expect features like target setting, strategy building, progress tracking, and compliance or voluntary reporting to become standard functionalities.
The increased emphasis on Scope 3 emissions, driven by carbon taxes and reporting requirements, will likely lead to a more distributed and collaborative approach to data collection. Industry initiatives and partnerships will continue developing while the responsibility for emissions data collection expands across various teams (procurement, logistics, operations, and others). The demand for tools integrating carbon accounting into business operations will develop, and the data collection effort will be distributed along the supply chain.
Did I miss anything? Let me know.
