Carbon Management Software Market To Reach $5.5B By 2032, New Report Says

Carbon Management Software Market To Reach $5.5B By 2032, New Report Says - Carbon Herald

Growing awareness of sustainability and the threat of a worldwide 1.5°C temperature increase is prompting strategic shifts in government and organizations. Companies are adopting carbon management tools to address the potential 18% GDP loss from climate change by 2050.

These tools, used to calculate, manage, monitor, and report emissions, help measure operational emissions throughout the supply chain. According to global technology intelligence firm ABI Research, the carbon management software market is projected to grow at a CAGR of 19.7%, reaching $5.5 billion by 2032.

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Thee findings are from ABI Research’s analysis report: The Market for Sustainability Software Solutions Addressing ESG Reporting, Carbon Management, Building Operation and Product Design. This report is part of the company’s Sustainability Software Market research service, which includes research, data, and ABI Insights.

Scope 3 emissions, which can be 5 to 25 times higher than Scope 1 and Scope 2 emissions, constitute up to 90% of the overall environmental impact, according to the Carbon Disclosure Project (CDP). Accurate measurement of Scope 3 emissions is crucial for businesses to enhance resilience and efficiency throughout the supply chain.

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“Only what is measured can be managed. Taking responsibility for carbon emissions is the first step to mitigating catastrophic climate-related disasters. Accurately measuring Scope 3 emissions provides invaluable insights which will equip organizations to increase resilience and efficiency over the entire supply chain, future-proofing the company, and de-risking value chain from climate-related financial threats,” explains Rithika Thomas, Sustainable Technology Analyst at ABI Research.

The carbon management market is shifting from voluntary to mandatory reporting due to regulations, heightened climate change awareness, digitization of production, customer and investor pressure, and the pursuit of transparency for a competitive advantage.

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Legacy Environmental, Social, and Governance (ESG) software providers like Enablon, Ipoint, and Sphera dominate in Europe and North America. However, Small and Medium enterprises (SMEs) and startups such as APlanet, Figbytes, Persefoni, NET0, Normative, and Watershed are fiercely competing by leveraging data analytics, artificial intelligence, automation, and predictive analysis to meet regulations and expand their customer base.

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Currently, the sustainability software market is a mixed bag with overlapping features and functionality with ESG, carbon management, smart building management, lifecycle analysis, and allied sustainability features. According to Thomas, “As the global carbon management market matures, Europe and North America will dominate over the next five years as innovators and early adopters. As international and country-specific policies stabilize, there will be a significant growth shift post-2026 in the software suppliers and user base in Asia-Pacific and emerging markets.”

A robust ecosystem will develop around carbon software tools with dedicated expert solutions for each reporting aspect to address credibility, accuracy, and auditability. Software developers should focus efforts on automating calculations, building industry-specific solutions with data assurances, and integrating AI and predictive capabilities to create value with actionable insights for end users to truly thrive in the current fragmented landscape.

As forward-looking companies and larger corporations are applying carbon management tools at scale, long-term strategic goals on sustainability become more evident with tangible short-term metrics,” Thomas concludes.

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