With an increased focus by businesses to report on their sustainability impacts as well as cut energy use, the carbon accounting software market is expected to increase by $6.38 billion by 2025, according to a report by Technavio.
As companies focus on reducing carbon emissions as well as handle increasing regulations, North America will see the highest growth in the market, rising 37% over that time. The report says there will be a CAGR of about 25% in the carbon accounting market from 2020 through 2025.
As reducing carbon emissions and becoming more energy efficient is seen as a priority by many businesses heading into 2022, Technavio says collecting data on energy use is the most critical part of reporting on sustainability. It says with the exception of carbon-intensive industries such as utilities or heavy manufacturing, many organizations rarely track their energy usage.
For example, the report says energy related to fleets is rarely tracked in accounting systems. Additionally, the information related to energy is often tracked based on cost, not usage. Getting on top of that type of information is one of the biggest challenges of the carbon accounting market, Technavio says.
With that in mind, carbon accounting software implementation is also being driven as a way for businesses to reduce energy use and to execute cost cutting measures, according to Technavio. The software can help companies track energy use during a given time to help identify business practices that consumes a greater amount of energy. That can also help companies address inefficiencies, the report says.
These process highlight the continued efforts of many businesses to stay on top of sustainability reporting and transparency and the tools they need to properly manage those goals.
Technavio also says energy-related regulations require organizations to stay on top of their emissions output. Additionally, consumers and investors are demanding energy-efficient products.
The carbon accounting software market is fragmented, according to the report, as providers look at the best strategies to implement platforms as well as staying on top of improving technologies.
The report looked at industries such as oil and gas, telecommunication, technology and power and utilities. It says key countries involved in the market are the United States, China, Germany, the United Kingdom, Japan and Saudi Arabia.