WEEKEND READ: The $27 Billion Business of Measuring Your Carbon Footprint —and Why the Numbers May Be Wrong

Amsterdam, 19 September 2026 — EBM Weekend Read — By Nick Staunton, Editor-in-Chief

There is a particular kind of dread familiar to anyone who has sat in a sustainability team meeting in the last three years: a spreadsheet with several thousand rows, a supplier list nobody fully trusts, and a deadline set not by the company itself but by a regulator in Brussels or Sacramento. That dread has built an entire industry. Carbon accounting software — the tools companies buy to measure, categorise and report their greenhouse gas emissions — is now roughly a $27-28bn market, and depending on whose growth curve you believe, it’s heading somewhere between $63bn and $136bn by the early 2030s. Nobody agrees on the exact ceiling, which tells you something useful on its own: this is a market still being priced by analysts who don’t yet know how big the compliance burden underneath it is going to get.

Why This Market Exists at All

The reason it exists at all is duller and more solid than most fast-growing tech categories get to be. This isn’t a market built on hype or a speculative bet that customers might eventually want the product. It exists because the EU’s Corporate Sustainability Reporting Directive now requires roughly 50,000 companies operating in Europe to disclose detailed emissions data under a “double materiality” standard, because California’s SB 253 and SB 261 force any company doing business in the state above $1bn in revenue to report Scope 1, 2 and 3 emissions regardless of where it’s headquartered, and because the SEC finalised its own climate-disclosure rule in March 2024. A CFO who ten years ago could get away with a paragraph in the annual report now needs an audit-ready number, because a regulator, not a marketing department, is asking for it. European firms in particular have had to rebuild sustainability reporting into something closer to financial reporting than to a corporate values statement, with green bonds and sustainability-linked loans now tying a company’s actual cost of capital to numbers that used to be optional.

The Specialists vs. the Platforms

That regulatory floor has produced a genuinely interesting competitive fight. On one side sit the specialists — Watershed, Persefoni, Sweep, Plan A, Normative — companies built from the ground up to do one thing, competing on how precisely they can model a customer’s Scope 3 emissions, which is the hardest and least standardised category by a wide margin. On the other side sit the incumbents: Microsoft, SAP, IBM, Salesforce, all of whom have bolted a carbon module onto software their customers already run, betting that installed-base inertia beats specialist accuracy. The top five vendors by that measure — IBM, SAP, Microsoft, Schneider Electric and Salesforce — already control something like 40% of category revenue, cross-selling emissions tracking into finance and HR systems at close to zero marginal cost. It’s the same pattern that plays out in every enterprise software category eventually: a specialist proves the market exists, and a platform company buys or builds its way into owning the customer relationship anyway. Diginex’s move to acquire Plan A in December 2025 is one early data point on which side is winning that argument, and it’s unlikely to be the last consolidation the category sees.

Where the Numbers Actually Break Down

Here is the part of the story that deserves far more attention than it gets, and the part that actually matters more than who owns the market. Boston Consulting Group surveyed businesses on their own emissions calculations and found an average error rate of 30 to 40 percent — meaning a company’s stated carbon footprint and its actual one can differ by nearly half, using methods those companies believed were defensible at the time. That’s not a rounding error. It’s the difference between a genuine climate commitment and a number invented to satisfy a reporting requirement. A 2021 study out of the Technical University of Munich looked at 56 major software and hardware manufacturers and found their self-reported emissions had been underestimated, in aggregate, by 391 megatonnes of CO2 equivalent — roughly Australia’s entire annual output, missing from the numbers of companies that had already published sustainability reports built on those figures.

The mechanism behind that gap is baked into the accounting standard itself, not into any individual company’s dishonesty. The GHG Protocol’s Scope 3 methodology allows firms to estimate supplier emissions using industry averages rather than the supplier’s own actual data, which sounds reasonable until you notice what it does at scale: a genuinely low-carbon supplier gets assigned the same average emissions figure as a dirty one in the same industry, and a company sourcing entirely from clean suppliers gets no credit for it in its own reported number. Double-counting compounds the problem further, since the same tonne of carbon can appear in more than one company’s Scope 3 inventory as it moves through a supply chain, with no central ledger reconciling who actually owns it. None of this requires anyone to lie. It requires only that a company follow the accepted methodology and publish the result — which is precisely why the case for treating ESG data as an auditable system rather than a one-off report keeps getting stronger, and why regulators are starting to demand third-party assurance on numbers that used to be taken on faith.

The Quieter Problem: Saying Nothing at All

There’s a second, quieter distortion sitting next to the accuracy problem, and it cuts in the opposite direction. As scrutiny of climate claims has intensified, some companies have simply stopped talking about their sustainability progress at all — a phenomenon now widely enough recognised to have its own name, greenhushing, where firms with genuinely defensible numbers say nothing rather than risk a greenwashing accusation over methodology they can’t fully control. That’s arguably a worse outcome than an imperfect disclosure: it removes the pressure that public claims create, and it means the market loses exactly the comparative information carbon accounting software was built to produce in the first place.

What This Means for Buyers

What all of this means for the people actually buying this software is straightforward and worth saying plainly: procurement should be treated the way a company would treat any other financial control, because that’s genuinely what it now is. A platform that’s cheap and fast because it leans on industry-average Scope 3 estimates is buying a company a number, not a defensible one, and the gap between those two things is exactly what a determined journalist, short-seller, or regulator will eventually go looking for. The firms doing this well aren’t the ones with the flashiest dashboard. They’re the ones that can show their working, supplier by supplier, and explain why their number is smaller than the industry average rather than simply asserting it.

The Bottom Line: The genuinely interesting story in carbon accounting was never a hidden agenda about tracking individual citizens — that’s a distortion built from a real quote taken wildly out of context. The real story is a $27bn industry built almost entirely on regulatory necessity, fighting the same specialist-versus-platform battle every enterprise software category eventually has, while quietly admitting through its own commissioned research that the product it sells is wrong roughly a third of the time. A market that size, growing that fast, selling numbers that inaccurate, is not a scandal waiting to be invented. It’s one already sitting in the data, for anyone willing to read the BCG survey instead of the Instagram post.

Related Analysis

• Sustainability Strategies: How Top European Firms Adapt
• The Importance of Stronger Audit Trails in ESG Data
• Greenhushing: An Unsustainable Practice for the World’s Biggest Brands