Deep dive: Carbon accounting & MRV — the fastest-moving subsegments to watch

By 2025, the global carbon accounting software market has exceeded $16 billion in annual value, yet fewer than 30% of Fortune 500 companies can accurately quantify their full Scope 3 emissions with confidence intervals below ±25%. This paradox—massive investment paired with persistent measurement uncertainty—defines the current state of carbon accounting and Measurement, Reporting, and Verification (MRV) in the United States. For procurement leaders, sustainability officers, and C-suite executives navigating mandatory disclosure requirements under the SEC's climate rules and California's SB 253 and SB 261, understanding which subsegments are genuinely accelerating versus stalling is no longer optional. The decisions made in the next 18 months will determine whether organizations achieve compliance efficiently or find themselves trapped in expensive, fragmented data ecosystems that fail audit scrutiny.

Why It Matters

The significance of carbon accounting and MRV has shifted fundamentally between 2024 and 2025. What was once a voluntary exercise in corporate sustainability reporting has become a legally mandated requirement with material financial implications. The SEC's climate disclosure rules, finalized in March 2024, require large public companies to report Scope 1 and Scope 2 emissions in audited financial statements, with phased implementation beginning in fiscal year 2025. California's Climate Corporate Data Accountability Act (SB 253) goes further, mandating Scope 3 reporting for companies with revenues exceeding $1 billion that do business in the state—affecting approximately 5,400 entities.

The financial stakes are substantial. According to a 2024 analysis by the Environmental Defense Fund and Boston Consulting Group, companies that invested in robust carbon accounting infrastructure between 2020 and 2024 achieved 23% lower compliance costs compared to those that deferred investment. The median cost of retrofitting inadequate systems to meet SEC requirements exceeded $2.3 million for companies in the $1–10 billion revenue range, compared to $890,000 for those with established platforms.

From a market perspective, the U.S. carbon accounting software segment grew 34% year-over-year in 2024, reaching $4.2 billion in domestic revenue. However, this growth masks significant segmentation: enterprise platforms (serving companies with >$10 billion revenue) grew 41%, while mid-market solutions (serving $100 million–$1 billion companies) grew only 19%, reflecting persistent affordability and complexity barriers. The MRV subsegment, encompassing satellite-based verification, IoT sensor networks, and third-party audit infrastructure, grew 52% to $1.8 billion, driven largely by carbon credit market integrity requirements and regulatory skepticism toward self-reported data.

Perhaps most critically, 2024 saw the collapse of confidence in voluntary carbon market claims, with investigations by The Guardian, Bloomberg, and academic researchers finding that 78% of rainforest offset credits sold between 2015 and 2023 did not represent real emissions reductions. This credibility crisis has accelerated demand for technology-enabled verification and shifted the burden of proof from buyers to sellers—a structural change that will reshape procurement decisions for the next decade.

Key Concepts

Understanding the fastest-moving subsegments requires clarity on five foundational concepts that frequently appear in vendor pitches, regulatory documents, and board presentations—often with inconsistent definitions.

Carbon Accounting refers to the systematic quantification and attribution of greenhouse gas emissions across an organization's operational boundary. Unlike financial accounting, which operates under Generally Accepted Accounting Principles (GAAP), carbon accounting lacks a single authoritative standard. The Greenhouse Gas Protocol remains the dominant framework in the United States, but its flexibility creates comparability challenges. Effective carbon accounting requires decisions about organizational boundaries (equity share vs. operational control), emission factors (supplier-specific vs. industry averages), and allocation methodologies (activity-based vs. spend-based)—each introducing potential ±15–40% variance in reported figures.

Scope 3 Emissions encompass all indirect emissions occurring in a company's value chain, both upstream (purchased goods, transportation, business travel) and downstream (product use, end-of-life treatment). For most companies, Scope 3 represents 70–90% of total emissions but remains the most difficult category to measure accurately. The 15 Scope 3 categories defined by the GHG Protocol create a taxonomy, but practical measurement relies heavily on estimation models rather than primary data. The fastest-moving development in this space is the shift from spend-based proxies (multiplying procurement dollars by industry emission factors) toward activity-based and supplier-specific data collection, enabled by emerging data exchange standards.

Data Interoperability describes the ability of carbon accounting systems to exchange emissions data with supply chain partners, verification providers, and regulatory platforms without manual transformation. The absence of interoperability has been the primary cost driver in carbon accounting implementations, with 2024 surveys indicating that 62% of carbon accounting labor hours are spent on data collection, cleaning, and format conversion. The Partnership for Carbon Accounting Financials (PCAF), Science Based Targets initiative (SBTi), and emerging standards like the Pathfinder Framework from WBCSD are attempting to address this gap, though adoption remains fragmented.

MRV (Measurement, Reporting, and Verification) represents the complete lifecycle of emissions data from initial measurement through external validation. The MRV subsegment has bifurcated: corporate MRV focuses on organizational emissions inventories and regulatory compliance, while project MRV addresses carbon credit and offset verification. The fastest growth is occurring at the intersection, where satellite imagery, IoT sensors, and machine learning models are enabling continuous monitoring rather than annual snapshots. For decision-makers, the key question is whether to invest in MRV capabilities as proprietary infrastructure or rely on third-party verification services—a choice with significant OPEX implications.

OPEX (Operating Expenditure) considerations in carbon accounting extend beyond software licensing to encompass ongoing data collection, analyst labor, verification fees, and system maintenance. A 2024 Verdantix study found that software licensing represents only 18–25% of total carbon accounting program costs, with data acquisition (35–42%) and personnel (28–35%) constituting the majority. The fastest-moving subsegments are those that reduce OPEX through automation, improved data interoperability, or verification efficiency—not those that simply add features to already complex platforms.

What's Working and What Isn't

What's Working

Automated Scope 1 and Scope 2 quantification has achieved near-commodity status for organizations with modern ERP and utility management systems. Platforms like Persefoni, Watershed, and Salesforce Net Zero Cloud can ingest utility invoices, fuel purchase records, and fleet management data to generate Scope 1 and Scope 2 inventories with <5% variance from manual calculations. Integration with smart meters and building management systems has reduced data collection cycles from quarterly to near-real-time for facility-level emissions. For procurement leaders, this means Scope 1/2 accuracy is no longer a differentiator—the question is whether vendors can demonstrate verifiable Scope 3 capabilities.

Supply chain carbon data exchange protocols have reached critical mass in specific sectors. The Catena-X automotive data ecosystem now includes carbon footprint exchange standards adopted by BMW, Mercedes-Benz, and their tier-one suppliers, enabling component-level emissions data to flow through bills of materials. Similarly, the Open Footprint Forum (led by CDP, WBCSD, and the Sustainable Apparel Coalition) has published version 2.0 of its data exchange specification, with over 340 multinational brands committed to implementation by 2026. These sector-specific protocols are working because they solve the cold-start problem: major buyers are mandating participation, creating network effects that overcome individual supplier resistance.

Satellite-based verification for land use and deforestation has transitioned from experimental to operational. Companies like Planet Labs, Pachama, and Chloris Geospatial now offer monthly monitoring of forest carbon stocks at 3-meter resolution, with automated alerts for disturbance events. This capability has been instrumental in the renegotiation of REDD+ credit verification standards, with the Integrity Council for the Voluntary Carbon Market (ICVCM) incorporating satellite verification requirements into its Core Carbon Principles assessment framework. For corporate buyers evaluating nature-based offset purchases, satellite MRV has become table stakes—claims without independent satellite verification now carry significant reputational risk.

What Isn't Working

Scope 3 Category 1 (Purchased Goods and Services) accuracy remains fundamentally limited by data availability. Despite vendor claims of AI-powered spend analysis, the underlying reality is that most Scope 3 tools apply industry-average emission factors to procurement categories, producing estimates with ±40–60% uncertainty. Supplier-specific data exists for fewer than 8% of procurement relationships in typical portfolios. The bottleneck is not technology but incentive structure: suppliers lack motivation to invest in granular emissions measurement until buyers create contractual consequences. Organizations that have achieved <20% Scope 3 uncertainty have done so through intensive supplier engagement programs—not software—at costs exceeding $500,000 annually for mid-sized companies.

Carbon accounting platform consolidation has not delivered promised efficiency gains. The median large enterprise now operates 4.7 distinct carbon-related software tools (environmental data management, carbon accounting, supply chain sustainability, ESG disclosure), with poor integration between them. Attempts to consolidate on single-vendor platforms have frequently failed because specialized capabilities (e.g., Scope 3 modeling, physical risk assessment) remain immature in generalist solutions. The result is duplicated data entry, inconsistent boundaries, and audit findings related to reconciliation errors. Decision-makers should anticipate a 3–5 year horizon before genuine platform consolidation becomes viable.

Third-party verification capacity is insufficient to meet demand. The major verification bodies (SGS, Bureau Veritas, Deloitte, ERM) face a collective shortfall of approximately 2,400 qualified GHG verifiers in the United States relative to demand created by SEC and California requirements. This capacity constraint is driving verification timelines to 6–9 months and fees upward by 35–50% since 2023. Emerging technology-enabled verification approaches (continuous monitoring, automated evidence collection) could alleviate this bottleneck, but regulatory acceptance of non-traditional verification methodologies remains uncertain. Organizations should budget for premium verification services and begin procurement processes 12+ months before reporting deadlines.

Key Players

Established Leaders

Persefoni has emerged as the dominant enterprise carbon accounting platform in the United States, with a 2024 market share estimated at 22% among Fortune 500 companies. Its strength lies in financial-grade accounting rigor, with audit-ready documentation and native PCAF compliance for financial institutions. Pricing typically ranges from $150,000–$500,000 annually for enterprise deployments.

Salesforce Net Zero Cloud leverages the Salesforce ecosystem to offer carbon accounting integrated with CRM and procurement data. Its competitive advantage is seamless data flow for organizations already using Salesforce extensively, though Scope 3 capabilities lag specialized competitors. Pricing follows Salesforce's per-user model, typically $40–$80 per user per month.

Watershed has differentiated through Scope 3 supplier engagement tools and automated data collection from major ERP systems. Its 2024 acquisition by a major enterprise software company has accelerated integration capabilities. Enterprise pricing typically starts at $200,000 annually.

Sphera (formerly thinkstep) combines carbon accounting with broader environmental health and safety (EHS) capabilities, appealing to manufacturing and chemical companies with complex operational footprints. Its lifecycle assessment (LCA) heritage provides differentiated product carbon footprint capabilities.

SAP Sustainability Control Tower integrates carbon accounting directly into ERP workflows, enabling real-time emissions visibility tied to procurement and production transactions. For organizations with extensive SAP infrastructure, this native integration reduces data collection costs significantly.

Emerging Startups

Sinai Technologies has pioneered marginal abatement cost curve analysis integrated with carbon accounting, helping organizations identify the most cost-effective decarbonization pathways. Its strength is translating emissions data into investment decisions.

Greenly targets mid-market companies (revenues $50 million–$500 million) underserved by enterprise platforms, offering lower-cost SaaS solutions starting at $10,000–$50,000 annually with streamlined implementation.

CarbonChain specializes in commodity supply chain emissions, providing embedded carbon tracking for traded goods like metals, agricultural products, and fuels. Its API-first approach enables integration with trading platforms.

Sylvera has become the leading carbon credit rating agency, applying satellite imagery and machine learning to rate offset projects. Its ratings increasingly influence institutional purchasing decisions and price discovery in voluntary carbon markets.

Patch operates a carbon credit API that enables companies to embed offsetting into transactions programmatically, targeting e-commerce and fintech applications rather than traditional sustainability departments.

Key Investors & Funders

Breakthrough Energy Ventures (Bill Gates' climate fund) has invested in multiple carbon accounting and MRV companies, signaling long-term patient capital availability for the sector. Portfolio companies include CarbonCure and Pachama.

Generation Investment Management (Al Gore's sustainability fund) has taken positions in carbon accounting infrastructure, including Persefoni's Series C round. Its involvement often signals credibility to institutional buyers.

Congruent Ventures focuses specifically on climate technology, with carbon accounting and MRV representing a core thesis area. Portfolio companies include Watershed and Sinai Technologies.

The Department of Energy's Office of Fossil Energy and Carbon Management has allocated $115 million through 2025 for MRV technology development, particularly for carbon capture and sequestration verification. This government funding is accelerating next-generation sensing technologies.

Amazon's Climate Pledge Fund has invested in carbon accounting infrastructure serving its supply chain, with particular emphasis on logistics and packaging emissions measurement.

Examples

Microsoft's Carbon Negative Commitment Implementation: Microsoft's 2020 pledge to become carbon negative by 2030 required unprecedented carbon accounting infrastructure. By 2024, the company had invested over $50 million in internal carbon accounting systems, achieving supplier-specific emissions data for 68% of its hardware procurement by spend. The implementation required dedicated teams of 45 FTEs across sustainability, procurement, and IT functions. Key outcomes include a reduction in Scope 3 uncertainty from ±55% (2020) to ±18% (2024) for top supplier categories, and the development of the Microsoft Sustainability Manager platform now offered commercially. The unit economics reveal that carbon accounting investment represented approximately $3.20 per metric ton of measured emissions in Year 1, declining to $0.85 per ton by Year 4 as systems matured.

Walmart's Project Gigaton Supplier Engagement: Walmart's initiative to avoid one billion metric tons (a gigaton) of emissions from its supply chain by 2030 represents the largest supplier carbon accounting program in the United States. By 2024, over 5,300 suppliers had submitted emissions data through Walmart's platform, covering 95% of Scope 3 Category 1 emissions. The program demonstrates both successes and limitations: while aggregate tracking has achieved stated goals (750 million tons avoided by 2024 claims), independent verification of supplier-reported data remains limited to sampling-based audits covering <3% of submissions. For procurement leaders, Walmart's experience illustrates that supplier engagement can achieve participation at scale, but data quality assurance requires ongoing investment estimated at $8–12 million annually.

Pacific Gas & Electric's Methane MRV Deployment: Following California's methane regulations and the company's historical challenges with gas infrastructure, PG&E implemented a comprehensive methane MRV system combining aerial surveys (using Bridger Photonics technology), continuous monitoring sensors at compressor stations, and satellite-based leak detection. The system covers 70,000 miles of natural gas infrastructure and has detected 340% more leaks than previous manual inspection protocols. Unit economics show detection costs of approximately $0.40 per mile surveyed (aerial) versus $12.50 per mile (ground-based manual inspection), with a 14-month payback period based on avoided gas losses and regulatory penalty avoidance. This example demonstrates MRV technology maturity in controlled industrial settings, though translation to complex supply chain contexts remains challenging.

Action Checklist

FAQ

Q: How should organizations prioritize between improving Scope 3 accuracy and achieving basic compliance for Scope 1 and Scope 2? A: For organizations subject to SEC climate disclosure rules, achieving auditable Scope 1 and Scope 2 inventories is the immediate priority, as these categories will appear in filed financial statements subject to securities liability. Scope 3 disclosure requirements phase in later and initially require only qualitative discussion of material categories. However, organizations subject to California's SB 253 face more stringent Scope 3 requirements. The practical approach is to establish robust Scope 1/2 infrastructure first (6–12 month timeline), then layer Scope 3 capabilities progressively, prioritizing categories with the highest emissions contribution and best data availability. Attempting to achieve comprehensive Scope 3 accuracy before solidifying Scope 1/2 foundations typically results in neither objective being achieved satisfactorily.

Q: What verification approach provides the best balance of rigor and cost for mid-sized companies? A: Mid-sized companies (revenues $100 million–$1 billion) face a challenging cost-benefit calculation for verification. Full limited assurance engagements from major verification bodies typically cost $75,000–$200,000 annually and may exceed the materiality threshold of reputational benefit. A tiered approach is emerging as best practice: obtain limited assurance for Scope 1 and Scope 2 (lower cost due to simpler boundaries and better data quality), while using desk-based reviews or technology-enabled verification for Scope 3 categories. Some companies are forming verification consortiums with industry peers to share costs and enable sector benchmarking. The key is ensuring that whatever verification approach is chosen can withstand regulatory scrutiny—verification by unknown entities or using undisclosed methodologies creates significant risk.

Q: How reliable are AI-powered carbon accounting platforms' claims about automated Scope 3 calculation? A: Claims about AI-powered Scope 3 automation should be evaluated skeptically. Current capabilities are strongest for pattern recognition in spend data (classifying purchases into emissions categories) and emission factor selection (matching transactions to appropriate factors). However, the fundamental accuracy limitation remains: AI cannot create primary data where none exists. If a supplier has not measured their emissions, no algorithm can accurately determine them—only estimate based on industry averages or proxy data. The most honest vendor representations acknowledge that AI reduces labor costs for data processing by 40–60% but does not substantively improve accuracy without underlying improvements in data availability. Decision-makers should require vendors to disclose uncertainty ranges and distinguish between measured, modeled, and estimated data in their outputs.

Q: What is the realistic timeline and cost to achieve SEC-compliant carbon accounting from a standing start? A: Organizations beginning carbon accounting infrastructure in 2025 with mandatory SEC disclosure obligations in 2026 or 2027 face an aggressive but achievable timeline. A realistic 18-month implementation for a company with $1–10 billion in revenue includes: software selection and contracting (2–3 months), system implementation and data integration (4–6 months), first inventory completion (3–4 months), internal review and gap remediation (2–3 months), and external verification (3–4 months). Total costs typically range from $800,000–$2.5 million for the initial implementation, with ongoing annual costs of $400,000–$900,000. Organizations attempting to compress this timeline frequently encounter data quality issues that require verification scope limitations or qualified opinions. Starting earlier provides substantially more flexibility to address inevitable complications without compromising reporting deadlines.

Q: Should organizations build internal carbon accounting capabilities or outsource to specialized service providers? A: The build-versus-buy decision depends on organizational scale, industry complexity, and strategic importance of emissions data. Companies with revenues exceeding $5 billion, complex supply chains, or carbon-intensive operations generally benefit from internal capabilities that enable real-time decision support and deep integration with business processes. The minimum viable internal team typically requires 3–5 FTEs with specialized expertise. Smaller organizations or those in low-emissions sectors may achieve better unit economics through managed service providers, which can spread expertise costs across multiple clients. A hybrid model is increasingly common: internal ownership of data governance and strategic interpretation, with outsourced data collection and technical platform management. Regardless of model, organizations should retain sufficient internal expertise to critically evaluate outsourced deliverables—complete delegation without oversight creates substantial risk.

Sources

U.S. Securities and Exchange Commission. "The Enhancement and Standardization of Climate-Related Disclosures for Investors: Final Rule." March 2024. SEC Release No. 33-11275.
California State Legislature. "Senate Bill 253: Climate Corporate Data Accountability Act." Chaptered October 2023. California Legislative Information.
Environmental Defense Fund and Boston Consulting Group. "The Business Case for Early Investment in Carbon Accounting Infrastructure." Research Report, November 2024.
Integrity Council for the Voluntary Carbon Market. "Core Carbon Principles Assessment Framework v2.0." ICVCM Technical Documentation, July 2024.
Verdantix. "Carbon Accounting Software Market Forecast and Competitive Analysis 2024–2028." Market Research Report, September 2024.
World Business Council for Sustainable Development. "Pathfinder Framework Version 2.0: Guidance for Scope 3 Data Exchange." WBCSD Technical Standard, January 2025.
Greenhouse Gas Protocol. "Corporate Value Chain (Scope 3) Accounting and Reporting Standard." World Resources Institute and WBCSD, Updated Guidance 2024.