Carbon reporting has been much in the news over the past several years, with organizations under increasing pressure to track and disclose their carbon emissions.
IDC recently published a new document that offers a holistic assessment of the rapidly evolving landscape of carbon accounting and management platform vendors that are serving growing need for accurate, data driven emissions calculations and decarbonization strategy analysis.
As the global regulatory environment for climate risk and sustainability reporting continues to develop, organizations are under increasing pressure to report on their corporate emissions as well as their strategy for decarbonization.
Organizations are also experiencing mounting pressure from customers and business partners for transparent carbon emissions data, indicating a business value impact in lost revenue opportunities associated with non-cooperation. This is creating new demands on software platforms to support robust emissions calculations as well as provide analytical support to optimize decarbonization pathways.
Key Trends Representative of Carbon Management Software Capabilities
The mounting organizational regulatory and business value impact of robust carbon accounting and management practices is leading more enterprises to depend on purpose specific applications to support these initiatives. Some important trends that are driving carbon accounting and management platform development include:
- Data driven emissions calculations and reporting is elevating the importance of prebuilt connectors and APIs to source relevant data from billing systems, enterprise applications, third party sources, and IoT devices. Centralized management of sourced data is vital to ensure consistency, accuracy, efficiency, transparency, regulatory compliance, scalability, improved decision-making and enhanced collaboration.
- There is a wide breadth of organizational maturity that will dictate the scale of carbon accounting that an organization undertakes. While many organizations continue to focus primarily on internal carbon emissions, regulation is beginning to mandate value chain emissions reporting which will significantly increase the complexity of emissions calculations.
- Regulation is also mandating limited and eventually reasonable assurance of carbon emissions data requiring solutions that are highly auditable with transparent calculation methodologies and robust data verification capabilities.
- As the complexity of carbon emissions reporting escalates, sustainability teams, often small in number, are becoming overburdened with routine tasks, which impinges on their availability for more strategic initiatives. An important aspect of carbon management platforms will be workload offset enabled through automation and AI driven capabilities.
- Regulatory and stakeholder requirements are extending expectations from reporting of historical emissions to forward looking decarbonization initiatives and goal management. Supporting these requirements will necessitate advanced strategy, analytical and scenario planning features.
- Sustainability is increasingly extending beyond an organization’s sustainability team as initiatives are incorporated into organization KPIs and values. Carbon management platforms therefore should incorporate communication, collaboration and project management features that will foster cross team communication.
- Expectations for corporate carbon emissions reporting and management are rapidly advancing. Organizations are looking to software vendors to provide not only a robust platform but are also looking to these vendors for thought leadership, education resources and support.
In an era of escalating environmental scrutiny, mastering carbon accounting is not just compliance, but a strategic imperative for future-proofing businesses.
The 2024 IDC MarketScape for Worldwide Carbon Accounting and Management Applications evaluates 18 software vendors across 29 scoring criteria categories, including 18 capability categories and 11 strategy capabilities.
Software vendors included in the evaluation offer a carbon management software solution that is either a stand-alone product or a component of a broader platform. Vendors had to meet a minimum threshold of total employees as well as operate at a global scale (defined as having operations in at least two regions of the following regions: North America, South America, EU, APAC, Africa).
This research includes the analysis of eighteen sustainability software vendors including Acuity, Cority, EnergyCAP, FigBytes, GE Digital, Honeywell, IBM, Microsoft, Nasdaq, Normative, Persefoni, Plan A, SAP, Salesforce, Sphera, Sweep, UL Solutions and Watershed, who are positioned in the leaders and major players categories. The analysis identified that all 18 of the vendors have a strong carbon management solution, but some offer a more advanced solution set as well as a more innovative roadmap compared to others.
The carbon management software landscape has experienced explosive growth over the past five years which while providing better optionality, also presents organizations with increasingly complex choices in vendor selection.
This MarketScape is meant as a guide to help organizations evaluate software vendor platforms in order to identify the best platform for their organization for today as well as tomorrow’s requirements. It provides a comprehensive analysis of carbon management platforms, highlighting the increasing need for organizations to track, manage, and report carbon emissions amid evolving regulatory landscapes and stakeholder pressures. It evaluates vendors based on their capabilities and strategies to meet future customer needs, focusing on innovation, customer satisfaction, and the ability to support organizations in their decarbonization efforts.
