Study reveals $418 million invested in carbon management software sector but companies need greater evolution
- Around 49,000 EU companies have to disclose carbon emissions from next year under new directive
- Verdantix report finds no single software provider currently has a complete portfolio offering
- Investment in new solutions points to rapid innovation as software firms fight for burgeoning corporate spend
Leading independent research and advisory firm Verdantix estimates $418 million has been invested in the carbon management software sector in the last 12 months, but it says companies in the sector need faster evolution as new regulations drive demand for more forward-looking capabilities (please see the attached press release).
Verdantix says new rules, including the European Union’s Corporate Sustainability Reporting Directive which will see its first draft set of standards adopted in October this year, as well as the US Securities & Exchange Commission (SEC) proposal to align with the TCFD framework, are driving demand for improved software.
Around 49,000 firms in the EU will need to disclose carbon emissions from next year with the SEC proposals also likely to require reporting from a significant number of firms in the US. As a result, companies are searching for technological solutions that will aid them in meeting these new requirements. However, Verdantix finds that today no single software provider currently has a complete product portfolio capable of offering reporting on key elements, including financial, climate and physical data.
Verdantix’s Green Quadrant: Enterprise Carbon Management Software 2022 report says the new software functionality required by regulated entities include investor-grade auditable data; carbon calculation methodologies; evaluation of physical asset climate risk; and financial management functionality.