Carbon Management Software Market Projected to Hit $5.5 Billion by 2032 Amid Rising Demand for ESG Transparency

Rising Demand for Carbon Management Solutions

In response to increasing sustainability awareness and the looming threat of a global 1.5°C temperature rise, companies are increasingly turning to carbon management software. These tools, essential for calculating, managing, monitoring, and reporting emissions, are becoming integral in addressing the potential 18% GDP loss due to climate change by 2050. ABI Research, a global technology intelligence firm, forecasts the carbon management software market to grow at a CAGR of 19.7%, reaching a value of US$5.5 billion by 2032.

Scope 3 Emissions: A Crucial Focus

Scope 3 emissions, often significantly higher than Scope 1 and Scope 2 emissions, account for up to 90% of a company’s total environmental impact, as per the Carbon Disclosure Project (CDP). Rithika Thomas, Sustainable Technology Analyst at ABI Research, emphasizes the importance of accurately measuring Scope 3 emissions for enhancing resilience and efficiency across supply chains, thus safeguarding companies against climate-related financial risks.

Shift from Voluntary to Mandatory Reporting

The carbon management market is witnessing a transition from voluntary to mandatory emission reporting. This change is driven by stricter regulations, increased awareness of climate change, digitization in production, and pressures from customers and investors. Additionally, companies are recognizing the value of transparency in gaining a competitive advantage.

Market Players and Technological Innovations

While legacy Environmental, Social, and Governance (ESG) software providers like Enablon, Ipoint, and Sphera continue to lead in Europe and North America, Small and Medium Enterprises (SMEs) and startups such as APlanet, Figbytes, Persefoni, NET0, Normative, and Watershed are making significant inroads. These newer entrants are harnessing data analytics, artificial intelligence, automation, and predictive analysis to not only comply with regulations but also to expand their customer base in an increasingly competitive market.