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Carbon Management Revenue to Reach $5.5B

Growing awareness of sustainability and the threat of a global temperature increase is motivating strategic shifts in government and commercial organizations. Leaders are adopting carbon management tools to address the anticipated 18 percent GDP loss from climate change by 2050.

These carbon management tools are used to calculate, manage, monitor, and report emissions, and help measure operational results throughout the global supply chain.

According to the latest worldwide market study by ABI Research, the carbon management software solutions market is projected to grow at a CAGR of 19.7 percent, reaching $5.5 billion by 2032.

Carbon Management Apps Market Development

Scope 3 emissions, which can be 5 to 25 times higher than Scope 1 and Scope 2 emissions, constitute up to 90 percent of the overall environmental impact, according to the Carbon Disclosure Project (CDP).

Accurate measurement of Scope 3 emissions is crucial for government and business leaders to enhance resilience and efficiency throughout the global supply chain.

"Only what is measured can be managed. Taking responsibility for carbon emissions is the first step to mitigating catastrophic climate-related disasters," said Rithika Thomas, industry analyst at ABI Research.

Accurately measuring Scope 3 emissions provides invaluable insights that will equip organizations to increase resilience and efficiency over the entire supply chain, future-proofing the company, and de-risking the value chain from climate-related financial threats.

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.

Legacy Environmental, Social, and Governance (ESG) software providers like Enablon, Ipoint, and Sphera dominate the carbon management market 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 (AI), automation, and predictive analysis to meet regulations and expand their customer base.

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.

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," says Thomas.

According to the ABI assessment, a robust ecosystem will develop around carbon software tools with dedicated expert solutions for each reporting aspect to address credibility, accuracy, and auditability.

Outlook for Carbon Management Applications Growth

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.

That said, I believe the future of carbon management software is very bright. Continued market expansion, key integration with other sustainability solutions, and the development of innovative features are likely to pave the way for even more robust growth in the years to come.

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