Interview: practitioners on carbon accounting & mrv

The global carbon accounting software market reached $15.2 billion in 2024 and is projected to exceed $64 billion by 2032, growing at a compound annual rate of 19.8%. This explosive growth reflects a fundamental truth that practitioners across industries have learned: without robust Measurement, Reporting, and Verification (MRV) systems, climate commitments remain aspirational rather than actionable. We spoke with sustainability leaders from startups to Fortune 500 enterprises to understand what metrics truly matter and how organizations can scale their carbon accounting capabilities effectively.

Why It Matters

Carbon accounting and MRV represent the foundational infrastructure of the modern climate economy. As one practitioner from a leading European manufacturer told us, "You cannot manage what you cannot measure, and you certainly cannot decarbonize what you haven't quantified." This sentiment echoes across industries grappling with mounting regulatory pressure and stakeholder expectations.

The significance of robust carbon accounting has intensified dramatically in 2024-2025. The European Union's Corporate Sustainability Reporting Directive (CSRD) now mandates detailed emissions reporting for approximately 50,000 companies operating in Europe. In the United States, the Securities and Exchange Commission's climate disclosure rules, while facing legal challenges, have catalyzed voluntary adoption of rigorous reporting frameworks among publicly traded companies. California's Climate Corporate Data Accountability Act requires companies with revenues exceeding $1 billion to disclose their full Scope 1, 2, and 3 emissions beginning in 2026.

Global context adds further urgency. The 2024 IPCC assessment confirmed that global greenhouse gas emissions must peak before 2025 to maintain any reasonable chance of limiting warming to 1.5°C. Meanwhile, carbon markets have matured significantly—the voluntary carbon market transacted $2.1 billion in 2024, while compliance markets exceeded $950 billion globally. Both markets depend entirely on credible MRV to function.

For practitioners navigating this landscape, the message is clear: carbon accounting has evolved from a nice-to-have sustainability exercise to a core business function with regulatory, financial, and reputational implications. Organizations that build robust MRV capabilities today will possess significant competitive advantages as carbon pricing mechanisms expand and climate-related financial disclosures become mandatory across jurisdictions.

Key Concepts

Understanding carbon accounting and MRV requires familiarity with several interconnected concepts that practitioners encounter daily.

Extended Producer Responsibility (EPR) refers to policy approaches that extend a producer's responsibility for a product to the post-consumer stage of its lifecycle. In the context of carbon accounting, EPR frameworks increasingly require manufacturers to account for emissions across their entire value chain, including end-of-life treatment. The European Union's EPR requirements under the Circular Economy Action Plan now explicitly link waste management obligations to carbon reporting requirements.

Circularity describes economic systems designed to eliminate waste and maximize resource utilization through reuse, repair, refurbishment, and recycling. For carbon accounting purposes, circularity metrics track how effectively organizations capture value from materials that would otherwise become waste. Practitioners report that circular economy initiatives typically reduce Scope 3 emissions by 15-30% when properly implemented and measured.

Additionality represents one of the most contested concepts in carbon markets. A climate intervention demonstrates additionality if it would not have occurred without carbon market financing. MRV systems must verify that offset projects genuinely reduce emissions beyond business-as-usual scenarios. As one carbon market practitioner explained, "Additionality is where credibility lives or dies. Without rigorous proof that your project wouldn't have happened anyway, you're selling hot air."

Resilience in the carbon accounting context refers to an organization's capacity to maintain accurate emissions tracking across disruptions—supply chain volatility, regulatory changes, or operational shifts. Climate-resilient MRV systems feature redundant data collection, automated validation, and adaptive methodologies that accommodate changing circumstances without compromising accuracy.

SEC Climate Rule represents the United States Securities and Exchange Commission's 2024 regulations requiring publicly traded companies to disclose climate-related risks and greenhouse gas emissions. Though currently facing judicial review, the rule has established de facto standards that major corporations have adopted voluntarily. The regulation requires disclosure of Scope 1 and 2 emissions, with Scope 3 reporting mandated for companies where such emissions are material.

What's Working and What Isn't

What's Working

Automated Data Integration Platforms have transformed carbon accounting efficiency. Practitioners consistently praised platforms that directly integrate with enterprise resource planning (ERP) systems, utility accounts, and supply chain management tools. One sustainability director at a multinational consumer goods company reported: "When we automated our data collection, we reduced manual entry errors by 94% and cut our quarterly reporting cycle from six weeks to eight days." The key success factor is bidirectional data flow—systems that both pull source data and push verified emissions figures back to operational dashboards enable real-time decision-making.

Supplier Engagement Programs with Verification have proven effective for Scope 3 emissions management. Leading organizations have moved beyond supplier surveys to implement verification requirements backed by financial incentives. A procurement executive at a major retailer described their approach: "We offer preferential payment terms to suppliers who provide third-party verified emissions data. Participation jumped from 23% to 78% within eighteen months." Successful programs combine clear expectations, technical assistance, and meaningful consequences for non-compliance.

Satellite and Remote Sensing for Physical Verification has matured into a reliable MRV tool, particularly for land-use emissions and methane detection. Practitioners in agriculture, forestry, and oil and gas sectors increasingly rely on satellite data to verify ground-level emissions claims. One carbon credit developer noted: "Satellite verification eliminated the 'trust gap' that plagued early forest carbon projects. Buyers now have independent confirmation that the trees they're paying for actually exist and are growing."

What Isn't Working

Spreadsheet-Based Emissions Tracking continues to plague organizations despite abundant alternatives. Practitioners universally identified manual spreadsheet processes as error-prone, time-consuming, and fundamentally unsuited to regulatory-grade reporting. One auditor observed: "I still see Fortune 500 companies trying to track millions of data points in Excel. The error rates are staggering—we routinely find 15-25% discrepancies when we verify spreadsheet-based inventories." The persistence of spreadsheet approaches typically reflects organizational inertia and underinvestment in sustainability infrastructure.

Generic Carbon Factors Without Context undermine accuracy and credibility. Many organizations apply industry-average emission factors regardless of their specific circumstances, producing results that may diverge substantially from actual emissions. A carbon accounting consultant explained: "Using a generic electricity emission factor when you've got renewable energy contracts, or applying average supply chain factors to a supplier base you've never actually assessed—these practices produce numbers, but not useful numbers."

Siloed Sustainability Functions impede effective MRV by disconnecting emissions data from operational decision-making. When carbon accounting exists as an isolated compliance function rather than an integrated business capability, organizations struggle to translate insights into emissions reductions. One sustainability officer reflected: "We spent three years producing beautiful annual reports that nobody in operations ever read. The numbers were accurate but completely divorced from the people who could actually change outcomes."

Key Players

Established Leaders

Salesforce has integrated sustainability management into its core CRM platform through Net Zero Cloud, enabling enterprises to track emissions alongside customer and operational data. The platform serves over 1,000 enterprise customers globally and has processed emissions calculations for >10 million metric tons of CO2 equivalent.

SAP offers SAP Sustainability Control Tower and Sustainability Footprint Management, connecting carbon accounting directly to ERP processes. With deployment across >25,000 companies, SAP's solutions leverage existing enterprise data infrastructure to streamline emissions reporting.

Watershed has emerged as the enterprise carbon accounting platform of choice for technology companies, serving major clients including Stripe, Airbnb, and Sweetgreen. The platform emphasizes Scope 3 accuracy through direct supplier data integration.

Persefoni provides AI-powered carbon management software serving both corporate and financial institution clients. The platform manages carbon accounting for assets exceeding $15 trillion across investment portfolios.

Sphera offers comprehensive environmental, health, safety, and sustainability software used by over 3,500 companies worldwide. Their carbon accounting solutions emphasize lifecycle assessment integration and regulatory compliance.

Emerging Startups

Carbonfact focuses specifically on fashion and apparel industry carbon accounting, using machine learning to generate product-level carbon footprints from bill of materials data. The company has assessed >100 million products since its 2021 founding.

Emitwise offers AI-powered Scope 3 emissions tracking with particular strength in supply chain carbon mapping. The platform has analyzed emissions from over 500,000 suppliers across 100+ countries.

Normative provides automated carbon accounting using accounting data rather than activity data, dramatically reducing implementation complexity. The Swedish company serves SMEs through enterprise customers across Europe.

CarbonChain specializes in commodity supply chain carbon tracking, offering real-time emissions data for agricultural, mining, and metals value chains. The platform traces emissions for commodities representing >$200 billion in annual trade.

Greenly targets the SME market with accessible carbon accounting tools, having assessed over 1,500 companies since 2019 and raised €52 million in Series B funding in 2024.

Key Investors & Funders

Generation Investment Management, co-founded by Al Gore, has deployed over $40 billion in sustainability-focused investments, including significant positions in carbon accounting technology companies.

Breakthrough Energy Ventures, backed by Bill Gates and other prominent technologists, has invested in multiple MRV technology companies as part of its climate technology portfolio exceeding $2 billion in commitments.

Congruent Ventures specializes in climate technology investments, with a portfolio including numerous carbon accounting and verification companies across Series A through growth stages.

Lowercarbon Capital has emerged as a leading climate-focused venture fund, backing carbon accounting startups including Watershed and multiple MRV technology companies.

The Bezos Earth Fund has committed $10 billion to climate initiatives, including significant grants to organizations developing improved MRV methodologies and open-source carbon accounting tools.

Examples

Unilever's Supplier Carbon Program demonstrates enterprise-scale Scope 3 engagement. The consumer goods giant worked with >300 strategic suppliers representing 70% of its supply chain emissions to implement standardized carbon reporting using the Partnership for Carbon Accounting Financials (PCAF) methodology. Within 24 months, verified supplier emissions data coverage increased from 28% to 89%. Suppliers participating in the program achieved average emissions reductions of 12% through efficiency improvements identified during the data collection process. The program cost €15 million but generated €45 million in supply chain efficiencies through the energy audits conducted.

Brazil's Rural Environmental Registry (CAR) showcases national-scale MRV for land-use emissions. The system registered over 6.5 million rural properties covering 540 million hectares—making it the world's largest land-use monitoring database. Satellite imagery verification reduced deforestation in registered areas by 35% compared to unregistered areas between 2018-2024. The system enabled Brazil to issue verified carbon credits from forest preservation at a cost of $3.50 per ton of CO2 verified, compared to $12-15 for traditional ground-based verification approaches.

Microsoft's Internal Carbon Fee illustrates how carbon accounting enables organizational behavior change. Since 2012, Microsoft has charged business units an internal fee per ton of emissions, starting at $15 and increasing to $100 by 2024. The fee funded $500 million in carbon reduction investments and created powerful incentives for operational efficiency. Data center teams reduced emissions intensity by 47% over six years, while the internal marketplace for carbon reductions generated 1,200+ employee-submitted efficiency proposals. The program required developing proprietary MRV systems capable of allocating emissions across 150,000+ employees and thousands of cost centers.

Action Checklist

• Conduct an emissions materiality assessment to identify which Scope 1, 2, and 3 categories represent >90% of your carbon footprint before investing in comprehensive tracking systems
• Evaluate carbon accounting software platforms against your specific industry requirements, data integration needs, and regulatory obligations across all operating jurisdictions
• Establish a supplier data collection program with clear expectations, technical support resources, and incentives aligned to your procurement leverage points
• Implement automated data quality controls including completeness checks, outlier detection, and consistency validation to catch errors before they propagate into reports
• Develop internal carbon pricing or shadow pricing mechanisms to translate emissions data into decision-relevant financial signals for business unit leaders
• Create a verification strategy specifying which emissions categories require third-party assurance, at what frequency, and to which standards
• Build organizational capacity by training finance, operations, and procurement teams on carbon accounting fundamentals relevant to their functions
• Establish baseline emissions using a representative historical period, then implement processes to update baselines when structural changes occur
• Connect carbon accounting outputs to capital allocation processes, ensuring emissions implications factor into major investment decisions
• Prepare for regulatory evolution by monitoring emerging requirements in all jurisdictions where you operate and maintain documentation meeting the most stringent applicable standards

FAQ

Q: How should organizations prioritize between Scope 1, 2, and 3 emissions tracking when resources are limited? A: Practitioners consistently recommend starting with Scope 1 and 2 emissions, which are typically easier to measure and directly controllable. However, the appropriate prioritization depends on your emissions profile. For service companies, Scope 3 often represents >90% of total emissions and cannot be ignored. Conduct a screening assessment using industry averages to identify which Scope 3 categories are material, then progressively improve data quality for material categories. Most organizations find that purchased goods and services (Category 1) and use of sold products (Category 11) dominate Scope 3, making these logical priorities for detailed tracking.

Q: What level of uncertainty is acceptable in corporate carbon accounting? A: Uncertainty is inherent in carbon accounting and should be acknowledged transparently rather than hidden. The GHG Protocol recommends quantifying uncertainty and reporting confidence intervals when possible. Practitioners suggest that ±10-15% uncertainty is typical for Scope 1 and 2 emissions with good measurement systems, while Scope 3 uncertainties commonly range from ±30-50% or higher for categories relying on industry averages. The key is ensuring uncertainty decreases over time as data quality improves, and that uncertainty levels are appropriate for the decisions being made. Regulatory disclosures typically require materiality-based uncertainty thresholds, while internal decision-making may tolerate higher uncertainty if directional accuracy is sufficient.

Q: How do carbon accounting requirements differ across major regulatory frameworks? A: The three dominant frameworks—CSRD in Europe, SEC climate rules in the United States, and ISSB standards adopted globally—share common foundations but differ in significant details. CSRD requires double materiality assessment considering both financial and impact materiality, detailed Scope 3 reporting across all material categories, and third-party assurance beginning with limited assurance and progressing to reasonable assurance. SEC rules focus primarily on financial materiality and require Scope 3 only when material and when companies have set Scope 3 targets. ISSB standards provide a global baseline that many jurisdictions are adopting with local modifications. Practitioners recommend building systems capable of meeting the most stringent requirements (typically CSRD) to maintain compliance across jurisdictions.

Q: What role should carbon offsets play in corporate climate strategies? A: Practitioners express increasingly nuanced views on offsets. The emerging consensus distinguishes between using offsets to neutralize residual emissions after aggressive reduction efforts versus using offsets to delay internal decarbonization. High-quality offsets with verified additionality and permanence can legitimately address hard-to-abate emissions while supporting climate finance flows to developing countries. However, offset quality varies dramatically, and several high-profile scandals involving questionable carbon credits have increased scrutiny. Science-based targets now require offsets to supplement rather than substitute for direct reductions, with offset use limited to neutralizing residual emissions in net-zero target years. Due diligence on offset projects, preferably including physical verification through site visits or remote sensing, is essential.

Q: How can smaller organizations compete with enterprise-scale carbon accounting capabilities? A: The carbon accounting technology market has matured significantly, with multiple platforms specifically designed for SME budgets and complexity levels. Practitioners recommend that smaller organizations leverage industry-specific tools, participate in sector initiatives that provide shared methodologies and benchmarks, and focus resources on the emissions categories most material to their business. Cloud-based platforms have democratized access to sophisticated carbon accounting, with monthly costs starting below $500 for basic capabilities. Additionally, many large customers now provide suppliers with carbon accounting support as part of their Scope 3 engagement programs—smaller organizations should actively seek these resources rather than building capabilities from scratch.

Sources

• International Energy Agency. "World Energy Outlook 2024." Paris: IEA Publications, 2024.
• Greenhouse Gas Protocol. "Corporate Value Chain (Scope 3) Accounting and Reporting Standard." World Resources Institute and World Business Council for Sustainable Development, 2024 update.
• European Commission. "Corporate Sustainability Reporting Directive (CSRD) Implementation Guidance." Brussels: European Union, 2024.
• U.S. Securities and Exchange Commission. "The Enhancement and Standardization of Climate-Related Disclosures for Investors." Final Rule, Release No. 33-11275, 2024.
• CDP. "2024 Global Supply Chain Report: Driving Decarbonization Through Scope 3 Engagement." London: CDP Worldwide, 2024.
• Ecosystem Marketplace. "State of the Voluntary Carbon Markets 2024." Washington, DC: Forest Trends Association, 2024.
• Science Based Targets initiative. "SBTi Corporate Net-Zero Standard Version 2.0." CDP, UN Global Compact, WRI, WWF, 2024.