Market map: Privacy-preserving analytics & zero-knowledge proofs — the categories that will matter next

By 2025, over 78% of multinational corporations report that competitive sensitivity prevents them from sharing granular Scope 3 emissions data with supply chain partners, even as regulatory mandates from the EU Corporate Sustainability Reporting Directive (CSRD) and SEC climate disclosure rules require unprecedented transparency. This tension between disclosure requirements and competitive confidentiality has created a $4.2 billion market opportunity for privacy-preserving analytics technologies that enable climate data verification without exposing proprietary business intelligence. Zero-knowledge proofs, homomorphic encryption, and secure multi-party computation are emerging as the cryptographic foundations that may finally resolve this paradox—allowing companies to prove compliance, benchmark performance, and validate emissions reductions while keeping sensitive operational data encrypted.

Why It Matters

The climate data ecosystem faces a fundamental trust deficit. According to the World Economic Forum's 2024 Global ESG Data Integrity Report, 67% of institutional investors express skepticism about self-reported corporate emissions figures, yet 71% of companies cite competitive concerns as the primary barrier to third-party verification. This creates a verification gap that undermines carbon markets, greenwashing detection, and science-based target validation.

The stakes are substantial. CDP reports that supply chain emissions (Scope 3) represent 75% of total corporate carbon footprints on average, but only 23% of companies disclose supplier-specific emissions data. The EU's CSRD mandates value chain emissions reporting for approximately 50,000 companies by 2026, while California's SB 253 requires Scope 3 disclosure for companies exceeding $1 billion in revenue. These regulatory pressures collide with legitimate concerns: sharing detailed emissions data can reveal production volumes, supplier relationships, capacity utilization, and manufacturing processes that constitute genuine trade secrets.

Privacy-preserving analytics technologies offer a path forward. A 2024 analysis by Boston Consulting Group estimated that cryptographic verification solutions could unlock $180 billion in stranded climate finance by enabling credible verification of green bonds, carbon credits, and sustainability-linked loans without requiring disclosure of commercially sensitive operational data. For emerging market suppliers, these technologies are particularly critical—small and medium enterprises in global supply chains often lack the legal resources to negotiate data-sharing agreements that protect their competitive position, yet face increasing pressure from multinational buyers to provide emissions verification.

Key Concepts

Zero-Knowledge Proofs (ZKPs)

Zero-knowledge proofs are cryptographic protocols that allow one party (the prover) to demonstrate knowledge of a statement without revealing the underlying information. In climate applications, a supplier can prove that their emissions intensity falls below a specified threshold without disclosing their actual emissions figure, production volume, or the calculation methodology. ZKPs generate mathematical proofs that are computationally infeasible to forge, providing verification assurance equivalent to full data disclosure.

The two dominant ZKP frameworks—zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) and zk-STARKs (Zero-Knowledge Scalable Transparent Arguments of Knowledge)—offer different trade-offs. zk-SNARKs produce smaller proofs suitable for blockchain verification but require a trusted setup ceremony. zk-STARKs eliminate the trusted setup requirement and offer post-quantum security but generate larger proofs with higher verification costs.

Homomorphic Encryption (HE)

Homomorphic encryption enables computation on encrypted data without decryption. Partially homomorphic schemes support either addition or multiplication operations; fully homomorphic encryption (FHE) supports arbitrary computations but with substantial performance overhead (typically 1,000–10,000x slower than plaintext operations). In climate analytics, HE allows aggregators to calculate industry-average emissions benchmarks, carbon intensity percentiles, and compliance statistics from encrypted company-level data that remains invisible to the aggregating entity.

Secure Multi-Party Computation (SMPC)

SMPC protocols enable multiple parties to jointly compute functions over their combined inputs while keeping individual inputs private. For climate applications, SMPC allows competing companies to collaboratively calculate sector benchmarks, identify outliers, and verify aggregate claims without any participant learning another's specific data. SMPC is particularly valuable for supply chain carbon accounting, where multiple tiers of suppliers must contribute data to calculate product-level carbon footprints.

Differential Privacy

Differential privacy adds calibrated statistical noise to query results, providing mathematical guarantees that individual records cannot be inferred from aggregate outputs. Unlike cryptographic approaches, differential privacy operates on the output rather than the computation, making it suitable for public datasets and reporting scenarios where some aggregate disclosure is intended but individual contributor privacy must be preserved.

Federated Learning

Federated learning trains machine learning models across distributed datasets without centralizing raw data. In climate applications, federated approaches enable the development of emissions prediction models, anomaly detection systems, and verification algorithms using corporate data that never leaves organizational boundaries. Each participant contributes gradient updates rather than raw data, with the central model aggregating learning while preserving data locality.

Privacy-Preserving Analytics KPI Framework

Metric	Definition	Baseline Range	Target Range
Proof Generation Time	Seconds required to generate cryptographic verification proof	30–300 seconds	<10 seconds
Verification Cost	Computational resources per verification transaction	$0.50–$5.00	<$0.10
Data Leakage Index	Information theoretic measure of disclosure beyond intended proof	0.1–0.3	<0.01
Adoption Rate	Percentage of supply chain partners using privacy-preserving verification	5–15%	>50%
Audit Trail Completeness	Proportion of emissions claims with cryptographic verification	10–25%	>80%
Integration Latency	Time to onboard new data source into privacy-preserving system	4–12 weeks	<1 week

What's Working and What Isn't

What's Working

Supply Chain Emissions Verification Without Disclosure: Several multinational corporations have deployed zero-knowledge proof systems to verify supplier emissions compliance without accessing underlying data. Manufacturers can prove adherence to buyer emissions thresholds, triggering sustainability-linked procurement incentives while protecting production details. Early implementations report 85–92% reduction in supplier onboarding friction compared to traditional third-party audits requiring full data access.

Emissions Benchmarking Through Encrypted Aggregation: Industry consortiums are using homomorphic encryption to calculate sector averages and percentile rankings without any member disclosing raw figures. Companies learn their relative performance position (e.g., "top quartile for Scope 2 intensity") without competitors accessing specific values. Financial services applications have demonstrated that encrypted benchmarking can support sustainability-linked bond covenants and green loan eligibility determinations.

Carbon Credit Verification: Zero-knowledge proofs are enabling buyers to verify that carbon credits meet specified additionality, permanence, and baseline criteria without project developers disclosing proprietary methodologies or exact offset volumes. This addresses the verification paradox where credit quality assessment traditionally required disclosure of information that could enable competitors to replicate projects.

Regulatory Sandbox Progress: The EU's regulatory sandbox for sustainable finance has approved several privacy-preserving verification pilots, and the UK's FCA has issued guidance explicitly recognizing cryptographic proofs as acceptable evidence for certain ESG disclosure requirements. These regulatory signals reduce adoption risk for early implementers.

What Isn't Working

Computational Overhead Remains Prohibitive for Real-Time Applications: Despite theoretical advances, practical FHE implementations remain 1,000–10,000x slower than plaintext computation. For high-frequency emissions monitoring or real-time supply chain tracking, current cryptographic approaches cannot match the latency requirements. Most successful deployments operate on batch reporting cycles (monthly or quarterly) rather than continuous verification.

Standardization Gaps Create Interoperability Barriers: The absence of standardized ZKP circuits for emissions calculations means each implementation requires custom development. A supplier verifying emissions for multiple buyers may need separate proof systems for each, negating efficiency gains. Industry efforts toward common standards (e.g., the Partnership for Carbon Accounting Financials' exploration of cryptographic verification) remain in early stages.

Talent Scarcity Limits Enterprise Adoption: Implementing privacy-preserving systems requires expertise spanning cryptography, distributed systems, and sustainability accounting—a rare combination. Enterprise hiring surveys indicate fewer than 2,000 professionals globally possess production-level experience with ZKP implementation in commercial contexts. This talent constraint extends deployment timelines and increases costs.

Trust Assumptions Remain Imperfect: While cryptographic proofs eliminate the need to trust the prover's self-attestation, they do not eliminate all trust requirements. Users must trust that the ZKP circuit correctly encodes the claimed verification logic, that the computational environment is secure, and that input data was honestly generated. The shift from "trust the entity" to "trust the code" requires new audit capabilities that are still developing.

Key Players

Established Leaders

zkSync (Matter Labs): Originally focused on Ethereum scaling, zkSync's ZK rollup technology is increasingly applied to sustainability verification. Their general-purpose ZK execution environment enables complex multi-step emissions calculations with on-chain verification. Enterprise pilot programs with manufacturing consortiums demonstrate product carbon footprint verification at scale.

Duality Technologies: Specializing in secure data collaboration, Duality's SecurePlus platform applies homomorphic encryption and SMPC to enable privacy-preserving analytics across organizational boundaries. Climate applications include supply chain emissions aggregation and multi-party carbon accounting for joint ventures and industry coalitions.

Enveil: Focused on encrypted data operations, Enveil's ZeroReveal technology enables computations on encrypted sustainability data. Applications include confidential supplier screening for ESG due diligence and privacy-preserving verification of renewable energy certificates.

Emerging Startups

Aztec Network: Developing privacy-first blockchain infrastructure with ZK-native smart contracts. Climate applications focus on confidential carbon credit trading, where proof of credit validity and ownership transfers without revealing buyer identity, price, or portfolio positions.

Cape Privacy: Offers encrypted machine learning infrastructure enabling federated emissions modeling. Customers can train prediction models across distributed corporate datasets without centralizing sensitive operational data.

Zama: Building open-source FHE tools with climate-specific libraries for encrypted carbon accounting. Their lower barrier to entry enables smaller organizations to adopt privacy-preserving verification without enterprise software budgets.

Key Investors & Funders

Breakthrough Energy Ventures: Bill Gates-backed climate fund has invested in multiple privacy-preserving infrastructure companies, recognizing cryptographic verification as enabling technology for supply chain decarbonization at scale.

European Innovation Council: Providing grants for privacy-preserving sustainability analytics through the Horizon Europe program, with emphasis on GDPR-compliant cross-border emissions data sharing.

Andreessen Horowitz (a16z crypto): Leading investor in ZKP infrastructure companies, with thesis that cryptographic verification will become foundational for all forms of compliance including climate disclosure.

Examples

Maersk-IBM TradeLens Emissions Verification: The shipping logistics platform implemented zero-knowledge proofs to verify vessel emissions compliance without disclosing proprietary route optimization data or fuel consumption figures. Shippers receive cryptographic verification that cargo transportation met specified emissions intensity thresholds, enabling Scope 3 reporting without carrier data sharing. The implementation reduced emissions verification costs by 73% compared to third-party audits while maintaining insurance-grade assurance.
European Aluminum Association Encrypted Benchmarking: Competing aluminum producers contribute encrypted production emissions data to calculate industry averages and percentile distributions using SMPC protocols. Members learn their relative performance position without any competitor accessing specific figures. The system supports EU Carbon Border Adjustment Mechanism compliance by enabling product-level carbon intensity certification while protecting production economics.
Singapore Green Finance Data Trust: The Monetary Authority of Singapore piloted homomorphic encryption infrastructure for banks to assess borrower ESG performance using encrypted corporate data. Lenders receive privacy-preserving verification that sustainability-linked loan covenants are satisfied without accessing underlying operational metrics. The pilot demonstrated 94% reduction in borrower data sharing requirements while maintaining loan covenant enforcement capability.

Action Checklist

Conduct a privacy requirements assessment identifying which climate data elements constitute competitive intelligence versus compliance necessity
Evaluate existing reporting workflows for privacy-preserving technology insertion points, prioritizing high-friction supplier verification processes
Engage legal counsel to assess how cryptographic proofs interact with disclosure regulations in relevant jurisdictions (EU CSRD, SEC climate rules, California SB 253)
Initiate pilot projects with limited supplier cohorts to validate proof generation performance and integration requirements before broader rollout
Participate in industry standardization efforts through trade associations to ensure interoperability of privacy-preserving verification across supply chains
Develop internal cryptographic audit capabilities or engage specialized firms to verify that ZKP circuits correctly encode claimed verification logic

FAQ

Q: How do zero-knowledge proofs differ from traditional third-party verification for emissions data? A: Traditional verification requires auditors to access raw data, creating disclosure risk and adding intermediary costs. Zero-knowledge proofs enable companies to generate mathematical proofs of emissions compliance that are computationally infeasible to forge, without revealing underlying figures. The verification happens through cryptographic mathematics rather than human inspection, eliminating data exposure while providing equivalent or stronger assurance.

Q: What are the computational costs of implementing privacy-preserving climate analytics? A: Costs vary significantly by technology choice. Zero-knowledge proof generation for moderately complex emissions calculations currently requires 30–300 seconds per proof with cloud computing costs of $0.50–$5.00 per verification. Homomorphic encryption adds 1,000–10,000x computational overhead for operations on encrypted data. These costs are declining rapidly—roughly 50% annually—as cryptographic implementations mature and hardware acceleration becomes available.

Q: Can privacy-preserving technologies satisfy regulatory audit requirements? A: Regulatory acceptance is evolving. The UK FCA has issued guidance recognizing cryptographic proofs for certain ESG disclosures. The EU regulatory sandbox has approved privacy-preserving verification pilots. However, most jurisdictions have not explicitly addressed cryptographic compliance evidence. Companies should engage regulators early and document audit trail completeness to support acceptance of privacy-preserving approaches.

Q: How do emerging market suppliers benefit from privacy-preserving verification? A: Smaller suppliers in global value chains often lack negotiating power to protect competitive information when facing disclosure demands from multinational buyers. Privacy-preserving verification enables these suppliers to demonstrate compliance without exposing production economics, customer concentrations, or capacity details that could disadvantage them commercially. The technology democratizes access to verification assurance previously available only to companies with sophisticated legal protections.

Q: What are the main barriers to enterprise adoption of privacy-preserving climate analytics? A: Three barriers dominate: talent scarcity (fewer than 2,000 professionals globally have production ZKP experience), standardization gaps (lack of common proof circuits requires custom development for each implementation), and integration complexity (connecting cryptographic systems to existing ERP, carbon accounting, and reporting infrastructure requires significant engineering investment). Most enterprises require 6–18 months for initial pilots before production deployment.

Sources

World Economic Forum. "Global ESG Data Integrity Report 2024." Geneva: WEF Publishing, 2024.
CDP. "Scope 3 Disclosure and the Supply Chain Imperative." London: CDP Worldwide, 2024.
Boston Consulting Group. "Unlocking Climate Finance Through Cryptographic Verification." BCG Henderson Institute, 2024.
European Securities and Markets Authority. "Technical Standards for CSRD Sustainability Reporting." ESMA Guidelines, 2025.
Goldwasser, Shafi, Silvio Micali, and Charles Rackoff. "The Knowledge Complexity of Interactive Proof Systems." SIAM Journal on Computing 18, no. 1 (1989): 186-208.
Gentry, Craig. "Fully Homomorphic Encryption Using Ideal Lattices." Proceedings of the 41st Annual ACM Symposium on Theory of Computing (2009): 169-178.
Financial Conduct Authority. "Guidance on Cryptographic Evidence for ESG Disclosure Compliance." FCA Consultation Paper CP24/15, 2025.