Sustainability Atlas
Cybersecurity & Digital Trust·14 min read··...

Deep dive: Privacy-preserving analytics & zero-knowledge proofs — the fastest-moving subsegments to watch

What's working, what isn't, and what's next — with the trade-offs made explicit. Focus on auditability without leakage, compliance workflows, and threat models.

The zero-knowledge proof (ZKP) market surged to $1.28 billion in 2024 and is projected to reach $7.59 billion by 2033, reflecting a compound annual growth rate of 22.1% (Grand View Research, 2024). Meanwhile, ZK-based blockchain rollups now secure over $28 billion in Total Value Locked, processing 580 million transactions in 2024 alone—with projections reaching 4.4 billion by 2025. For sustainability practitioners navigating ESG compliance, supply chain transparency, and carbon accounting, these cryptographic tools represent a paradigm shift: the ability to prove claims without revealing underlying data. As Scope 3 emissions—comprising 75% of corporate carbon footprints—demand unprecedented supplier collaboration, privacy-preserving analytics has moved from academic curiosity to operational necessity.

Why It Matters

The sustainability sector faces a fundamental tension: transparency requirements are escalating while data protection regulations tighten. The EU's Corporate Sustainability Due Diligence Directive (CSDDD), Carbon Border Adjustment Mechanism (CBAM), and deforestation due diligence rules demand granular supply chain data. Simultaneously, GDPR Article 17's "right to erasure" conflicts with blockchain's immutable ledger design. Privacy-preserving analytics—particularly zero-knowledge proofs—resolves this paradox.

ZKPs allow one party to prove a statement's truth without revealing the underlying information. For sustainability, this means a supplier can prove their carbon intensity falls below a threshold without disclosing proprietary production data. A textile manufacturer can demonstrate conflict-free mineral sourcing without exposing supplier networks to competitors. A carbon credit registry can verify additionality without revealing commercially sensitive project economics.

The business case is compelling. According to KPMG's 2025 Supply Chain Trends report, 44% of supply chain professionals identified environmental and sustainability initiatives as their most significant operational trend. Yet data privacy concerns remain the top barrier to cross-organizational analytics. The Supply Chain Analytics Market, valued at $8.94 billion in 2025, is projected to reach $28.73 billion by 2031 (GlobeNewswire, 2026). Privacy-preserving technologies unlock this growth by enabling trust without exposure.

For UK-based organizations, the intersection of post-Brexit data adequacy, financial services regulation (FCA ESG disclosure rules), and Net Zero commitments creates acute pressure. Privacy-preserving analytics offers a compliance pathway that satisfies regulators, protects competitive advantage, and enables the collaborative data sharing essential for decarbonization.

Key Concepts

Zero-Knowledge Proofs (ZKPs)

A zero-knowledge proof is a cryptographic method where a "prover" convinces a "verifier" that a statement is true without conveying any additional information. The canonical example: proving you know a password without revealing it. In sustainability contexts, this translates to proving emissions data meets regulatory thresholds, demonstrating supply chain compliance, or verifying carbon credit integrity—all without exposing underlying business data.

Two primary ZKP architectures dominate:

  • zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge): Compact proofs with constant verification time, requiring a trusted setup. Widely deployed in blockchain scaling (zkSync, Polygon Hermez).
  • zk-STARKs (Scalable Transparent Arguments of Knowledge): Larger proofs but no trusted setup requirement, offering quantum resistance. Used by StarkNet and dYdX.

Privacy-Preserving Computation Techniques

Beyond ZKPs, the privacy-preserving analytics ecosystem includes:

TechniqueDescriptionSustainability Use Case
Federated LearningTrain ML models on distributed data without centralizing itAggregate supplier emissions predictions without exposing individual data
Differential PrivacyAdd calibrated noise to datasets to prevent individual identificationPublish industry-level carbon benchmarks without revealing company-specific figures
Secure Multi-Party Computation (MPC)Multiple parties jointly compute a function without revealing their inputsCalculate Scope 3 emissions across supply chain partners privately
Homomorphic EncryptionPerform computations on encrypted dataAnalyze encrypted sustainability reports without decryption
Data Clean RoomsSecure environments for cross-organizational data analysisCompare ESG performance across portfolio companies

Auditability Without Leakage

The core value proposition for compliance teams is "auditability without leakage." ZKPs enable:

  • Regulators to verify compliance without accessing raw commercial data
  • Auditors to confirm carbon accounting accuracy without seeing supplier contracts
  • Customers to validate sustainability claims without exposing proprietary methodologies
  • Partners to collaborate on decarbonization without competitive intelligence risks

What's Working

ZK-Rollups for Scalable ESG Infrastructure

ZK-rollups have emerged as the dominant Layer-2 scaling solution for blockchain-based sustainability systems. zkSync Era processes over 27 million transactions monthly at speeds reaching 15,000 TPS, with transaction costs 30-95% lower than Ethereum mainnet (Rumble Fish, 2025). StarkNet's Total Value Locked tripled to $9 billion in Q4 2024. This infrastructure enables carbon credit registries, renewable energy certificates, and supply chain provenance systems to operate at enterprise scale.

Real-world deployment is accelerating. Major corporations including Goldman Sachs, Nike, Sony, and Deutsche Bank initiated ZKP-based systems in 2024-2025. The financial services sector leads adoption, with privacy-preserving KYC (Know Your Customer) emerging as the fastest-growing subsegment—market size of $83.6 million in 2025, projected to reach $903.5 million by 2032 at a 40.5% CAGR (DataIntelo, 2024).

Data Clean Rooms for Supply Chain Collaboration

LiveRamp's $200 million acquisition of Habu in January 2024 signaled enterprise appetite for privacy-preserving data collaboration. AWS Clean Rooms and Google Confidential Space now offer managed infrastructure for cross-organizational analytics without data exposure. For sustainability, this enables:

  • Aggregated Scope 3 calculations across supplier networks
  • Benchmarking ESG performance without revealing competitive positioning
  • Collaborative demand forecasting to optimize logistics emissions

Hardware Acceleration Maturing

ZK proof generation historically required prohibitive computational resources. Hardware acceleration is changing this calculus. Ingonyama raised $21 million in January 2024 for GPU/FPGA-optimized ZK libraries. Cysic secured $12 million for dedicated ZK hardware (ZK Air and ZK Pro devices). Custom ASICs now achieve proof generation in under 2 seconds. Proving costs are projected to fall from $0.0063 per transaction in 2024 to $0.001 by 2030 (Chorus One, 2024).

What's Not Working

GDPR-Blockchain Friction Remains Unresolved

Despite ZKP advances, fundamental tension persists between blockchain immutability and GDPR's right to erasure. While ZKPs can obscure data on-chain, the underlying cryptographic commitments remain permanent. Regulatory guidance is inconsistent across EU member states, creating compliance uncertainty for sustainability ledger implementations.

Trusted Setup Vulnerabilities

zk-SNARKs require a "trusted setup" ceremony where cryptographic parameters are generated. If this process is compromised, fake proofs become possible—undermining the entire system. While "powers of tau" ceremonies with thousands of participants mitigate this risk, the theoretical vulnerability remains a barrier for high-stakes regulatory applications.

Talent Scarcity

Implementing ZKP-based sustainability systems requires specialized cryptographic expertise. With only an estimated 1,000-2,000 production-ready ZK developers globally, competition for talent is intense. Eighty-three percent of supply chain professionals cite workforce shortages as a significant challenge (MHI Report, 2025).

Integration Complexity

Legacy enterprise systems lack native support for privacy-preserving protocols. Retrofitting ERP, supply chain management, and carbon accounting platforms requires substantial engineering investment. The 12% year-over-year increase in organizations investing in generative and causal AI (Rockwell Automation, 2025) highlights competing technology priorities.

Energy Consumption Concerns

Proof generation is computationally intensive. While proof verification is efficient, the generation process raises questions about environmental sustainability—particularly ironic for systems designed to support ESG compliance. Energy-efficient consensus mechanisms and renewable-powered proving networks are emerging but not yet standard.

Key Players

Established Leaders

Matter Labs (zkSync): The most well-funded ZK startup with $450 million raised across multiple rounds. zkSync Era is a general-purpose zkEVM processing millions of monthly transactions. Enterprise adoption includes sustainability applications in supply chain and carbon markets.

StarkWare: Raised $225 million to develop StarkNet, a permissionless Layer-2 using zk-STARKs. The quantum-resistant architecture appeals to organizations planning for long-term regulatory compliance. Powers dYdX decentralized derivatives and expanding into carbon trading infrastructure.

Polygon Labs: Invested $1 billion in enterprise ZKP development. Polygon Hermez operates as a production ZK-rollup on Ethereum. Partnerships with major brands position Polygon for sustainability traceability applications.

IBM: Through its Blockchain Platform and Hyperledger contributions, IBM offers enterprise-grade privacy-preserving supply chain solutions. Food Trust network traces provenance for major retailers including Walmart and Carrefour.

Emerging Startups

Succinct Labs: Raised $55 million (Paradigm-led, March 2024) for ZK infrastructure and zkVM (SP1). Building decentralized prover networks with participation from Polygon and EigenLayer founders. Focus on making ZKP accessible to non-cryptographers.

Aztec Network: Secured over $100 million (a16z, Paradigm, ConsenSys) for private smart contracts. First hybrid ZK rollup on Ethereum enables confidential transactions—applicable to private carbon credit trading and sensitive ESG data.

Ingonyama: $21 million seed (January 2024) for ZK hardware acceleration. GPU/FPGA libraries and semiconductor development address the computational bottleneck limiting ZKP adoption.

Pi Squared: $12.5 million seed (Polychain Capital, July 2024) for universal ZK circuit using "proof of proof" technology. Aims to verify computations across different proof systems—valuable for multi-standard sustainability verification.

Key Investors & Funders

Andreessen Horowitz (a16z): Lead investor in Aleo ($298 million), Aztec Network, and multiple ZK infrastructure projects. Crypto fund explicitly targets privacy-preserving technologies.

Paradigm: Led Succinct Labs' $55 million round and invested in Aztec Network. Focus on foundational crypto infrastructure applicable across sectors including sustainability.

Polychain Capital: Led Pi Squared's seed round and maintains significant ZK portfolio. Interest in cross-chain interoperability aligns with fragmented sustainability data ecosystems.

HashKey Capital and OKX Ventures: Co-led Cysic's $12 million pre-A for ZK hardware. Asian investor consortium signals regional adoption trajectory.

Examples

1. Verra's Carbon Credit Registry Modernization

Verra, managing the world's largest voluntary carbon credit registry (Verified Carbon Standard), has explored ZKP integration for credit verification. The challenge: proving project additionality and avoiding double-counting without exposing commercially sensitive project economics. A ZKP-based approach allows project developers to prove emissions reductions meet methodological requirements while keeping financial models confidential. This addresses criticism that carbon market opacity undermines integrity—auditors can verify without accessing competitive data.

2. Maersk-IBM TradeLens Supply Chain Traceability

While TradeLens operations concluded in 2022, its architecture informed subsequent privacy-preserving supply chain systems. The platform demonstrated how blockchain-based provenance tracking could incorporate selective disclosure—shippers proving cargo origin without revealing routing or pricing. Current successors integrate ZKP modules enabling customs authorities to verify compliance without accessing full commercial invoices. This model is directly applicable to deforestation-free commodity verification under EU Due Diligence regulations.

3. Climatiq's Emission Factor Database

Climatiq provides carbon accounting APIs used by enterprises calculating Scope 1-3 emissions. The company has implemented differential privacy techniques to publish aggregated emission factors derived from confidential client data. Individual company emissions remain protected while industry benchmarks improve accuracy. This approach enables the "data network effects" essential for carbon accounting without compromising contributor confidentiality—a model being extended to supply chain-specific emission factors.

Sector-Specific KPI Table

MetricBaseline (2024)Target (2026)Leading Practice
ZKP Integration Cost$500K-2M implementation<$100K via managed servicesCloud-native ZK APIs (AWS/GCP)
Proof Generation Time10-30 seconds<2 secondsHardware-accelerated provers
Transaction Cost (L2)$0.01-0.10<$0.001ZK-rollup batching
Supply Chain Data Sharing15% of suppliers>50% of suppliersData clean room adoption
Scope 3 Coverage40% of value chain>80% of value chainPrivacy-preserving MPC
Audit Time ReductionBaseline60-70% reductionAutomated ZKP verification
Regulatory Compliance Rate65% fully compliant>90% fully compliantIntegrated ZKP workflows

Action Checklist

  • Assess current data sharing blockers: Survey suppliers and partners to identify where privacy concerns prevent sustainability data exchange. Quantify the emissions visibility gap.

  • Pilot data clean room technology: Implement AWS Clean Rooms or Google Confidential Space for a contained Scope 3 calculation use case. Measure accuracy improvement versus traditional estimation.

  • Evaluate ZKP vendor landscape: Request demonstrations from Succinct Labs, Aztec Network, or zkSync enterprise teams. Assess integration requirements with existing carbon accounting systems.

  • Develop internal cryptographic literacy: Train compliance and sustainability teams on ZKP fundamentals. The talent gap means internal champions are essential for successful adoption.

  • Engage regulators proactively: Work with FCA, ICO, and sector bodies to shape guidance on ZKP-based compliance. Early engagement influences favorable interpretation.

  • Establish data governance framework: Define what data can be shared, what must remain private, and what ZKP commitments are acceptable for regulatory purposes.

  • Monitor hardware acceleration roadmap: Track Ingonyama, Cysic, and major cloud provider announcements. Cost reductions follow hardware availability.

FAQ

Q: How do zero-knowledge proofs differ from encryption for sustainability data protection?

A: Encryption protects data at rest or in transit—the recipient eventually decrypts to access information. ZKPs are fundamentally different: they prove facts about data without ever revealing the data itself. For sustainability, this means a supplier can prove their carbon intensity is below a threshold without the verifier ever seeing the actual figure. The proof is mathematically irrefutable, but the underlying number remains secret. This enables compliance verification without competitive intelligence exposure—encryption requires trusting the decrypting party, while ZKPs require no such trust.

Q: What are the realistic implementation costs for mid-sized enterprises?

A: Implementation costs vary significantly based on scope. A basic data clean room pilot using managed cloud services (AWS Clean Rooms) can launch for $50,000-100,000 including integration. Custom ZKP circuit development for specialized sustainability verification requires $500,000-2 million and 6-12 months with specialized talent. However, the emergence of ZK-as-a-Service platforms like Succinct Labs' prover network is democratizing access—expect costs to decline 70-80% by 2027. For most organizations, starting with off-the-shelf privacy-preserving analytics tools before custom ZKP development is advisable.

Q: Are zero-knowledge proofs legally recognized for regulatory compliance?

A: Regulatory recognition is evolving. The EU Blockchain Observatory Forum has published guidance acknowledging ZKPs as valid for certain compliance demonstrations. The UK FCA has not issued explicit guidance but has signaled openness in sandbox applications. For carbon markets, the Integrity Council for the Voluntary Carbon Market (ICVCM) is examining ZKP-based verification for its Core Carbon Principles. The key principle: ZKPs are most defensible when complementing rather than replacing traditional audit trails. Organizations should document the cryptographic basis of proofs and maintain underlying data for potential regulatory examination even if not routinely disclosed.

Q: How do ZKPs address the double-counting problem in carbon markets?

A: Double-counting—where the same emission reduction is claimed by multiple parties—undermines carbon market integrity. ZKPs enable registries to verify a credit hasn't been previously retired without revealing the buyer's identity or transaction history. The proof confirms uniqueness cryptographically. Combined with blockchain-based registries (where each credit has a unique on-chain representation), ZKPs prevent the same underlying data from generating multiple claims. This is technically achieved through "nullifier" schemes—once a credit is claimed, a cryptographic nullifier is published that prevents re-use without revealing which specific credit was consumed.

Q: What is the environmental footprint of ZKP systems themselves?

A: This is a legitimate concern and active research area. Proof generation is computationally intensive—early ZK-rollups consumed significant energy. However, the net calculation favors ZKPs for sustainability applications. First, proof verification is extremely efficient (milliseconds, minimal energy). Second, ZKPs enable blockchain scaling that reduces overall network energy consumption—zkSync processes transactions at 1/100th the energy cost of Ethereum mainnet. Third, the enabling effect on sustainability data sharing produces carbon reduction benefits that dwarf computational costs. Best practice is deploying on energy-efficient Layer-2s and using renewable-powered proving infrastructure. Hardware acceleration (Ingonyama, Cysic) reduces energy per proof by 90%+ versus general-purpose computing.

Sources

Topics

privacypreservingcapexsupply chain securitybenchmark KPIsdata governancetraceability

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