Myth-busting Carbon Accounting & MRV — Separating Hype from Reality

The carbon accounting software market has exploded to $22 billion in 2025, with projections reaching $100 billion by 2032. Amid this growth, procurement teams across Asia-Pacific face a critical challenge: distinguishing genuinely transformative MRV (Measurement, Reporting, Verification) solutions from vendor hype. As mandatory climate disclosures take effect across Singapore, Hong Kong, and Australia in 2025-2026, understanding what works—and what doesn't—has never been more urgent.

Why It Matters

For procurement leaders, carbon accounting isn't just a compliance checkbox. Scope 3 emissions—those embedded in your supply chain—represent 70-95% of most companies' total carbon footprint, yet fewer than 30% of companies track them comprehensively. According to recent surveys, 70% of companies cite lack of supplier data as their primary barrier, while 53% struggle with inconsistent methodologies. This gap creates both risk and opportunity.

Asia-Pacific is the fastest-growing carbon accounting market globally, expanding at 30.7% CAGR through 2030. Stock exchanges from Singapore to Japan now require ISSB-aligned climate disclosures, transforming carbon data from "nice to have" into a prerequisite for market access. Companies that master carbon accounting will secure better financing terms, avoid regulatory penalties, and build supply chain resilience.

Key Concepts

MRV (Measurement, Reporting, Verification) forms the backbone of credible carbon claims. Traditional MRV relied on annual audits, spreadsheet calculations, and sampling—consuming 30-40% of project budgets. Digital MRV (DMRV) now combines satellite imagery, IoT sensors, AI, and blockchain for continuous, automated monitoring, cutting verification costs to 10-15% while enabling real-time tracking rather than periodic snapshots.

Scope 1, 2, and 3 Emissions categorize where carbon comes from:

• Scope 1: Direct emissions from owned sources (your factories, fleet)
• Scope 2: Indirect emissions from purchased energy (electricity, heating)
• Scope 3: Everything else in your value chain (suppliers, logistics, product use, disposal)

Scope 1 and 2 are relatively straightforward to measure. Scope 3 is where complexity—and controversy—lives.

Automation vs. Manual Approaches: Spend-based calculations multiply purchase amounts by industry-average emission factors. They're quick but can't track actual reduction efforts. Supplier-specific data provides accuracy but requires significant engagement. The most effective strategies use hybrid approaches—automate where possible, engage suppliers where it matters.

What's Working

Enterprise Platforms Delivering Results: Watershed, valued at $1.8 billion after its 2024 Series C, serves clients including Walmart, Airbnb, Shopify, and FedEx. The platform combines comprehensive Scope 1-3 measurement with carbon removal marketplaces via Frontier. Their acquisition of VitalMetrics strengthened their emissions database, while European expansion now drives over 20% of revenue—demonstrating genuine cross-border scaling.

SMB-Accessible Solutions: Greenly, based in Paris with $78 million in funding, starts at $5,000/year—democratizing access for mid-market companies previously priced out. Their automated data collection and industry-specific benchmarks allow smaller firms to begin carbon accounting without dedicated sustainability teams.

Digital MRV Innovation: Pachama leads forest carbon verification, combining satellite imagery, LiDAR, and machine learning to validate (or flag) carbon credit claims. Verra's DMRV initiative is standardizing technology pathways for remote sensing and IoT sensors, building credibility across voluntary carbon markets.

Financial Sector Specialization: Persefoni, which raised $23 million in March 2025 to expand its product suite, has become the go-to platform for financial institutions tracking financed emissions. Their Persefoni Pro free tier attracted over 6,000 SMB sign-ups in its first year, while enterprise clients like Singapore Exchange rely on their PCAF-aligned methodology for portfolio-level carbon requirements. The platform's AI copilot now handles anomaly detection across millions of data points.

What Isn't Working

The Scope 3 Data Gap: Despite representing the bulk of emissions, Scope 3 measurement remains problematic. Recent surveys show 66% of companies still rely on spreadsheets as their primary tool, while 52% cite calculation complexity as a major challenge. Companies face thousands of suppliers across multiple tiers—many of whom don't track carbon at all. Spend-based estimates provide rough baselines but, as experts note, "cannot measure or inform real emissions reduction efforts on the ground beyond reducing spend."

Regulatory Fragmentation: CSRD, TCFD, ISSB, SEC, and GHG Protocol each have different requirements and timelines. Companies operating across jurisdictions face complex multi-standard reporting. The lack of global harmonization increases compliance costs and creates confusion about what "good" looks like.

Technology Accessibility Concerns: Advanced AI, blockchain, and satellite verification tools risk excluding smaller projects and developing-nation suppliers. High implementation costs remain a barrier—enterprise platforms can run $50,000-250,000 annually. There's a real risk of creating a two-tier system where only well-resourced organizations can provide verified data.

Accuracy Myths Persist: Many procurement teams believe Scope 3 is "too inaccurate to be useful" or that they "need complete supplier data to start." Both are false. The 80/20 rule applies—typically 20% of suppliers account for 80% of supply chain emissions. One public agency found just 20 suppliers represented 94% of their Scope 3 footprint.

Real-World Examples

1. Startup to Scale: A Regional Manufacturer's Journey: A mid-sized electronics manufacturer in Southeast Asia began with Greenly's entry-level platform in 2024. Starting with Scope 1-2 and spend-based Scope 3 estimates, they identified their top 15 suppliers as emission hotspots. By 2025, they had engaged these suppliers directly, replacing estimates with actual data for 78% of their footprint—sufficient to meet buyer requirements from European customers facing CSRD obligations.

2. Enterprise Integration: Financial Services Transformation: A Hong Kong-based asset manager implemented Persefoni to track financed emissions across their $40 billion portfolio. Within 18 months, they moved from manual spreadsheet reporting to automated, audit-grade calculations—reducing reporting time by 60% while meeting Hong Kong Stock Exchange disclosure requirements effective January 2025.

3. Cross-Border Supply Chain: Apparel Traceability: A Thai textile exporter partnered with Watershed to map emissions across cotton sourcing, dyeing, and manufacturing. The platform's supplier engagement tools helped onboard 200+ upstream partners, creating verifiable carbon data that satisfied brand partners' Scope 3 requirements and secured continued business with European fashion retailers.

Action Checklist

• Map your emission hotspots: Identify the 20% of suppliers likely driving 80% of your Scope 3 footprint—focus engagement there first
• Start with what you have: Use spend-based calculations as baselines, then progressively improve with supplier-specific data
• Align platform choice with scale: Evaluate Greenly for mid-market ($5K/year entry), Watershed for enterprise supply chains, Persefoni for financial portfolios
• Prepare for regional mandates: Review Singapore, Hong Kong, Japan, and Australia disclosure timelines relevant to your operations
• Build supplier engagement capacity: Develop standardized data requests and training to help key suppliers improve their carbon tracking
• Establish data quality processes: Create clear hierarchies for when to use actual data vs. proxies, and document your methodology for auditors
• Plan for continuous improvement: Set annual targets for replacing estimated data with measured data across your supply chain

FAQ

Q: Can we trust carbon accounting software accuracy? A: Platform accuracy depends on input data quality. For Scope 1-2, automated calculations are highly reliable when connected to utility and fuel data. For Scope 3, expect 20-40% uncertainty with spend-based methods, improving to 10-15% with supplier-specific data. The key is transparency—understanding your methodology's limitations and communicating them to stakeholders.

Q: How do Asia-Pacific disclosure requirements differ from EU or US? A: Singapore and Hong Kong have moved faster than the US SEC, requiring ISSB-aligned disclosures from FY2025 for listed companies. Singapore mandates Scope 1-2 for all SGX-listed firms starting FY2025, with Scope 3 following in FY2026 and external assurance required by FY2027. Hong Kong requires all listed issuers to report Scope 1-2 from January 2025, with Large Cap issuers facing mandatory Scope 3 from FY2026. Australia began mandatory climate reporting January 2025. Unlike the EU's CSRD, which applies to a broader range of companies, APAC requirements currently focus on listed entities—but supply chain pressure means private companies increasingly need verified carbon data to maintain customer relationships.

Q: Should we wait for better Scope 3 solutions before starting? A: No. Companies that begin now—even with imperfect data—are better positioned when regulations tighten. The learning curve for carbon accounting is significant; organizations need 2-3 years to build internal capability, supplier relationships, and data infrastructure. Starting with available tools and improving iteratively outperforms waiting for perfect solutions.

Sources

• Fortune Business Insights. (2024). "Carbon Accounting Software Market Size, Share & Growth Analysis 2032."
• Grand View Research. (2025). "Asia Pacific Carbon Accounting Software Market Size & Outlook, 2030."
• MIT Center for Transportation & Logistics. (2024). "State of Supply Chain Sustainability 2024."
• PwC. (2025). "Tackling the Scope 3 Challenge."
• Verra. (2025). "Digital MRV (DMRV) Initiative Overview."
• Science Based Targets Initiative. (2025). "Measurement, Reporting and Verification (MRV) Framework."
• Hong Kong Stock Exchange. (2024). "Climate-Related Disclosures Implementation Guide."
• Singapore Exchange. (2024). "Sustainability Reporting Requirements."

The carbon accounting landscape is maturing rapidly—but the gap between marketing claims and operational reality remains significant. For procurement teams navigating this space, success comes from matching platform capabilities to organizational needs, focusing supplier engagement on high-impact relationships, and building data quality incrementally rather than pursuing perfection from day one.