Sustainability Atlas
Policy, Standards & Strategy·12 min read··...

Deep dive: Standards & certifications — the fastest-moving subsegments to watch

What's working, what isn't, and what's next — with the trade-offs made explicit. Focus on KPIs that matter, benchmark ranges, and what 'good' looks like in practice.

The global sustainability certification market reached $3.1 billion in 2024 and is projected to grow at a 6.5% CAGR through 2030, with some analysts forecasting the broader ESG certification ecosystem to exceed $120 billion by 2032 (MarketsandMarkets, 2024; Verified Market Research, 2024). In the first wave of CSRD compliance alone, over 200 European companies published sustainability reports under the new directive, with 95% identifying climate change as a material topic and 76% reporting that CSRD requirements are fundamentally reshaping their strategic decision-making (PwC Global CSRD Survey, 2024). For founders, investors, and sustainability professionals operating in emerging markets, understanding which certification subsegments are accelerating—and which are stagnating—is no longer optional. It is the difference between capturing regulatory arbitrage and being caught flat-footed as compliance deadlines cascade across jurisdictions.

Why It Matters

Sustainability standards and certifications have evolved from voluntary differentiators into market access requirements. The EU's Corporate Sustainability Reporting Directive (CSRD) now mandates detailed sustainability disclosures for approximately 50,000 companies, including non-EU entities with significant European operations (European Commission, 2024). The regulatory cascade extends beyond Europe: over 3,000 companies globally have adopted ISSB Standards (S1 and S2), while India's BRSR Core framework has become mandatory for top-listed companies. These developments create a compliance infrastructure layer that touches every sector, from agriculture to financial services.

For emerging market companies, the stakes are particularly acute. Carbon Border Adjustment Mechanism (CBAM) requirements mean that exporters to the EU must demonstrate verified emissions data or face substantial tariffs. Supply chain due diligence regulations—including the EU Deforestation Regulation and proposed Corporate Sustainability Due Diligence Directive—require upstream suppliers to meet certification standards or risk exclusion from global value chains. The asymmetry is clear: companies with robust certification infrastructure gain preferential access to capital, customers, and markets; those without face margin compression and market exclusion.

The financial case is equally compelling. Companies with third-party verified sustainability claims command premium pricing in sectors from coffee (Rainforest Alliance certification) to textiles (Global Organic Textile Standard). More significantly, sustainable finance mechanisms—including green bonds, sustainability-linked loans, and transition finance—increasingly require certification as a precondition for access. The green bond market exceeded $500 billion in annual issuance in 2024, and ESG-linked financing now represents over 10% of global debt markets (Climate Bonds Initiative, 2024).

Key Concepts

Understanding the certification landscape requires distinguishing between several overlapping but distinct categories:

Voluntary sustainability standards (VSS) are multi-stakeholder frameworks that define environmental or social performance thresholds. ISEAL Alliance—the global membership organization for credible sustainability systems—now includes 49 community members and 19 code-compliant members, encompassing schemes from the Forest Stewardship Council (FSC) to Fairtrade International. These standards typically require third-party auditing and carry product-level labels.

Regulatory reporting frameworks mandate disclosure rather than performance thresholds. The CSRD requires companies to report against 12 European Sustainability Reporting Standards (ESRS), covering cross-cutting disclosures plus ten topical areas spanning climate, biodiversity, workforce, and business conduct. Unlike VSS, compliance does not require meeting specific targets—only transparent reporting against the framework.

Carbon and emissions verification represents a specialized subsegment focused on quantifying and validating greenhouse gas emissions. This includes Scope 1, 2, and increasingly Scope 3 emissions under frameworks like the GHG Protocol, verified by accredited bodies such as SGS, Bureau Veritas, or emerging digital platforms like Watershed and Sinai Technologies.

Double materiality assessment is a CSRD-specific requirement that companies evaluate both how sustainability issues affect their financial performance (financial materiality) and how their operations impact people and the environment (impact materiality). This bidirectional analysis distinguishes European disclosure requirements from single-materiality frameworks like ISSB.

Sector-specific certifications address unique environmental or social impacts within industries. Examples include the Roundtable on Sustainable Palm Oil (RSPO) for commodities, LEED and BREEAM for buildings, and the Aquaculture Stewardship Council (ASC) for seafood. These frameworks often include chain-of-custody requirements to ensure traceability from production to consumer.

What's Working

Rapid adoption of digital verification platforms

The convergence of blockchain, AI, and IoT is transforming certification from periodic audits to continuous monitoring. SGS launched AI-enhanced compliance monitoring tools in 2024, while SAP's Green Token platform provides blockchain-based supply chain traceability. Startups like EcoVadis (now valued at over $2 billion) have demonstrated that scalable, software-driven sustainability assessments can achieve enterprise adoption. The shift reduces certification costs for SMEs and improves data quality for downstream buyers.

Regulatory harmonization driving standardization

The proliferation of the ISSB standards has created a baseline for global sustainability disclosure, reducing the fragmentation that previously required companies to report against multiple incompatible frameworks. Over 30 jurisdictions have announced adoption or alignment with ISSB by 2025. This harmonization particularly benefits emerging market companies, which can now invest in a single reporting infrastructure rather than maintaining parallel compliance systems.

Climate and workforce topics achieving critical mass

Analysis of the first 200 CSRD reports shows that 95% of companies identify climate change as material, with 75% setting net-zero targets for 2040-2050 (CSR Tools, 2024). Own Workforce (S1) appears in approximately 90% of reports, and Business Conduct (G1) in 85%. This concentration creates clear expectations for what "good" looks like and enables benchmarking across sectors.

KPIs That Matter: Sector-Specific Benchmarks

SectorKPIBaseline RangeTop QuartileData Source
Energy & UtilitiesScope 1+2 intensity (tCO2e/MWh)0.35-0.50<0.20CDP 2024
ManufacturingCertification coverage (% suppliers)20-40%>70%EcoVadis
AgricultureCertified production (% volume)10-25%>50%ISEAL
Financial ServicesESG-linked AUM (% total)15-30%>50%PRI 2024
ConstructionLEED/BREEAM certified space (% portfolio)10-20%>40%USGBC
Retail & ApparelVerified sustainable materials (% input)5-15%>35%Textile Exchange

What's Not Working

Data availability and value chain complexity

PwC's 2024 Global CSRD Survey found that 59% of companies cite data availability as their primary compliance obstacle, with 57% pointing to value chain complexity. Scope 3 emissions—which often represent 80-95% of a company's carbon footprint—remain particularly challenging. Only 20% of companies surveyed had validated data availability before reporting deadlines, creating significant compliance risk.

SME accessibility barriers

While enterprise-scale companies can invest in dedicated sustainability teams and software platforms, SMEs face disproportionate compliance burdens. Certification costs, audit fees, and reporting complexity create barriers to entry that risk excluding smaller suppliers from global value chains. The fastest-growing certification segment is ironically SME-focused solutions, but adoption remains uneven.

Biodiversity and water metrics lagging

Despite regulatory emphasis on nature-related risks, biodiversity and ecosystems (E4) and water and marine resources (E3) appear in the fewest CSRD reports. The EU Deforestation Regulation and emerging Taskforce on Nature-related Financial Disclosures (TNFD) framework signal where regulation is heading, but companies lack the historical data, measurement methodologies, and verification infrastructure to report credibly. This gap represents both a risk and an opportunity for first movers.

Assurance readiness gaps

CSRD requires limited assurance from independent auditors—a significant step up from the largely unaudited sustainability disclosures of the past decade. Many companies lack the internal controls, audit trails, and process documentation required for investor-grade assurance. The transition from voluntary narrative disclosures to audited quantitative reporting exposes weaknesses in data governance.

Key Players

Established Leaders

SGS SA (Switzerland) is the world's largest inspection, verification, testing, and certification company, with over 98,000 employees across 2,600 offices globally. SGS launched SGS Green Mark in May 2024 and acquired Aster Global Environmental Solutions in January 2025 to expand carbon and GHG verification services.

Bureau Veritas (France) provides testing, inspection, and certification services across 140 countries, with dedicated sustainability assurance practices covering carbon verification, supply chain audits, and CSRD compliance support.

TÜV SÜD and TÜV Rheinland (Germany) lead in industrial and product certifications, including ISO 14001 environmental management system certification and carbon footprint verification. Their standards are often prerequisites for European market access.

EcoVadis (France) has achieved unicorn status as the leading cloud platform for sustainability ratings, intelligence, and collaborative performance improvement. EcoVadis assesses over 100,000 companies across 200 industries.

ISEAL Alliance sets the credibility framework for voluntary sustainability standards, with members including FSC, Rainforest Alliance, Fairtrade, and the Marine Stewardship Council (MSC).

Emerging Startups

Watershed (San Francisco) raised $100 million in Series C funding in 2024 at a $1.8 billion valuation, providing enterprise carbon accounting and disclosure software with verification capabilities.

Sweep (France) delivers AI-powered sustainability data management and ESG reporting, with particular strength in CSRD compliance for European enterprises.

Greenomy (Belgium) focuses specifically on CSRD and EU Taxonomy reporting, offering a purpose-built platform for European regulatory compliance.

Plan A (Berlin) provides TÜV-certified carbon accounting and ESG reporting, having achieved significant traction among German Mittelstand companies.

Sinai Technologies (San Francisco) offers a decarbonization intelligence platform emphasizing science-based targets and emissions reduction pathway modeling.

Key Investors & Funders

Sequoia Capital and Kleiner Perkins led Watershed's $100 million Series C, signaling top-tier VC confidence in sustainability software.

Extantia Capital closed a €204 million climate tech fund in 2024, with sustainability verification and reporting as core investment themes.

ETF Partners closed Fund IV at €285 million in May 2024, focused on sustainable innovation including ESG infrastructure.

European Innovation Council and Horizon Europe provide grant funding for sustainability measurement and verification technologies, particularly for SME solutions.

Examples

1. Länsförsäkringar (Swedish Financial Services)

Länsförsäkringar set the benchmark for CSRD governance transparency by creating a comprehensive policy table within its general disclosures. The table maps all governance documents to sustainability topics, identifies document owners, and specifies decision-making levels. This approach transformed what could have been narrative complexity into structured, auditable information. The company's report demonstrated that systematic governance documentation significantly reduces assurance preparation time and provides a template now referenced by European peers.

2. Rainforest Alliance (Global Agricultural Certification)

In March 2025, Rainforest Alliance released version 1.4 of its Sustainable Agriculture Standard, streamlining requirements from 221 to 148 farm-level indicators. This simplification directly addresses the accessibility barrier for smallholder farmers in emerging markets while maintaining credibility through continued ISEAL membership. The revision demonstrates that standard-setters are recognizing the trade-off between rigor and adoption—and choosing pragmatic solutions that expand certified supply without compromising core environmental and social protections.

3. DSV (Danish Logistics)

DSV's 2024 sustainability report integrated SASB requirements alongside ESRS disclosures, set Science-Based Targets initiative (SBTi) aligned climate goals, and created explicit cross-references to UN Sustainable Development Goals. For a logistics company facing Scope 3 complexity across thousands of suppliers and customers, DSV's approach of prioritizing material topics with clear data sources provides a replicable model. The company's comprehensive Scope 3 reporting—despite inherent measurement challenges—established transparency norms that regulators and investors now expect from the sector.

Action Checklist

  • Complete a double materiality assessment covering both financial and impact materiality across all ESRS topics, prioritizing climate (E1), workforce (S1), and business conduct (G1) as minimum viable scope
  • Audit current data collection processes for Scope 1, 2, and 3 emissions, identifying gaps in supplier data, activity data, and emission factors that require remediation before reporting deadlines
  • Evaluate ESG software platforms (Watershed, Greenomy, Sweep, Plan A) against your reporting jurisdiction requirements, integration capabilities, and assurance readiness features
  • Establish governance documentation mapping all sustainability policies to ESRS topics, including document owners, update cadences, and board-level oversight responsibilities
  • Engage third-party assurance providers early to understand limited assurance requirements and identify internal control gaps requiring remediation
  • For emerging market exporters: map supply chain certification requirements against EU CBAM, deforestation regulation, and key customer sustainability procurement standards

FAQ

Q: Which certification subsegments are growing fastest? A: Corporate Social Responsibility (CSR) reporting software is growing at 19.5% CAGR, driven by CSRD and ISSB adoption. Supply chain sustainability certification is the fastest-growing application segment, as downstream buyers cascade requirements to suppliers. Geographically, Asia Pacific leads regional growth due to China's Dual Carbon Goals and India's BRSR Core mandates.

Q: How do emerging market companies prioritize certifications when resources are limited? A: Start with certifications that unlock market access. For EU exporters, CBAM compliance and supply chain due diligence documentation are non-negotiable. For B2B suppliers, EcoVadis assessments are increasingly mandatory for multinational procurement. For consumer-facing products, sector-specific certifications (RSPO, FSC, Rainforest Alliance) command price premiums that offset compliance costs.

Q: What is the relationship between voluntary standards and regulatory reporting? A: They are complementary but distinct. Voluntary standards (ISEAL members) certify performance against thresholds. Regulatory frameworks (CSRD, ISSB) require disclosure regardless of performance level. Many companies use voluntary certifications to demonstrate performance in their regulatory disclosures. The EU Taxonomy provides a bridge, defining technical screening criteria that voluntary certifications can help demonstrate.

Q: How should companies approach assurance readiness for CSRD? A: Treat sustainability data with the same rigor as financial data. Establish documented processes for data collection, validation, and sign-off. Create audit trails for all reported metrics. Engage your assurance provider during the materiality assessment phase, not after report drafting. Plan for limited assurance initially, with a pathway to reasonable assurance as requirements evolve.

Q: What technology investments deliver the highest ROI for certification management? A: Carbon accounting platforms (Watershed, Sinai, Plan A) deliver immediate value by automating Scope 1, 2, and 3 calculations. Supplier sustainability platforms (EcoVadis) scale assessments across large supply bases. For CSRD-specific compliance, purpose-built platforms (Greenomy, Coolset) reduce manual effort in mapping disclosures to ESRS requirements. Blockchain-based traceability (SAP Green Token) addresses chain-of-custody requirements but remains early-stage for most use cases.

Sources

Topics

standardscertificationspermittingcarbon border adjustmentindustrial policyriskunit economics

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