Carbon Accounting Software Market: Impact of Regulatory Changes on Adoption
The global carbon accounting software market was valued at approximately USD 16.92 billion in 2023 and is projected to reach USD 67.58 billion by 2030, growing at a compound annual growth rate (CAGR) of 22.1% from 2024 to 2030. This growth is driven by increasing global awareness and regulatory pressure to reduce carbon emissions and combat climate change.
Organizations across various industries are adopting carbon accounting software to accurately measure, track, and report their carbon footprints. This software aids in compliance with stringent environmental regulations and supports corporate sustainability initiatives by providing real-time insights into carbon emissions across operations.
The demand for transparency in environmental reporting, alongside the growing adoption of Environmental, Social, and Governance (ESG) standards, is further propelling market expansion. Moreover, the integration of advanced technologies such as artificial intelligence, machine learning, and the Internet of Things (IoT) into carbon accounting solutions is enhancing their efficiency and user-friendliness.
As businesses increasingly emphasize corporate sustainability, carbon accounting software enables them to transparently monitor and report their carbon footprints. This not only showcases their commitment to sustainability but also appeals to eco-conscious consumers and investors. The market is also benefiting from the rising adoption of cloud-based solutions, which offer scalability and ease of access, making carbon accounting more attainable for small and medium-sized enterprises. With the ongoing global shift towards sustainability and the decarbonization of industries, the carbon accounting software market is well-positioned for robust growth in the coming years, playing a vital role in helping businesses meet their environmental objectives.
Key Market Trends & Insights
- North America dominated the carbon accounting software market with a revenue share exceeding 37.0% in 2023. The U.S. and Canadian governments have implemented rigorous reporting requirements for greenhouse gas emissions, compelling organizations across various sectors to adopt carbon accounting software. The growing focus on ESG practices among North American companies has also driven demand for advanced tools to monitor and report carbon emissions.
- The U.S. carbon accounting software market is expected to experience significant growth from 2024 to 2030. Stricter environmental regulations and carbon reduction targets from the U.S. government are motivating businesses across various sectors to adopt carbon accounting software for compliance and enhanced sustainability reporting. Additionally, the U.S. market benefits from a robust tech ecosystem that fosters the development and adoption of innovative carbon accounting solutions.
- By deployment, the cloud segment led the market, capturing over 72.0% of global revenue in 2023. Cloud-based solutions allow organizations to access carbon accounting tools from anywhere, facilitating real-time tracking and management of emissions data across multiple locations. This accessibility is particularly advantageous for companies with distributed operations or remote teams.
- In terms of end use, the energy and utilities segment accounted for the largest revenue share in 2023. Energy and utility companies are among the largest greenhouse gas emitters, facing stringent environmental regulations and reporting requirements. These organizations are under significant pressure to reduce their carbon footprints and transition to more sustainable practices.
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Market Size & Forecast
- 2023 Market Size: USD 16.92 Billion
- 2030 Projected Market Size: USD 67.58 Billion
- CAGR (2024-2030): 22.1%
- North America: Largest market in 2023
Key Companies & Market Share Insights
Key companies include IBM Corporation, SAP SE, Salesforce, Inc., and Microsoft. These companies are focusing aggressively on expanding their customer base and gaining a competitive edge over their rivals. Hence, they pursue various strategic initiatives, including partnerships, mergers & acquisitions, collaborations, and new product/ technology development. For instance, in June 2024, Workiva introduced a carbon solutions platform to help clients meet increasing climate-risk reporting and global disclosure requirements. The newly established "Workiva Carbon" subsidiary will gather data from companies' management systems and monitor greenhouse gas emissions from their operations. This platform enables businesses to automatically calculate their carbon footprint, covering scope 1, 2, and 3 emissions.
Key Players
- ATI IBM Corporation
- SAP SE
- Salesforce, Inc.
- Microsoft
- Persefoni AI
- Sphera
- Greenly
- Diligent Corporation
- SINAI Technologies
- Net0.
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Conclusion
The carbon accounting software market is set for substantial growth, fueled by heightened awareness of climate change, regulatory pressures, and a strong focus on corporate sustainability. As organizations increasingly adopt advanced technologies and cloud-based solutions, the ability to accurately track and report carbon emissions will become essential. This market will play a critical role in helping businesses meet their environmental goals, driving a significant shift towards sustainability in various industries.
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