Sustainability Atlas
Climate Tech & Data·13 min read··...

Trend analysis: Carbon accounting & MRV — where the value pools are (and who captures them)

Signals to watch, value pools, and how the landscape may shift over the next 12–24 months. Focus on implementation trade-offs, stakeholder incentives, and the hidden bottlenecks.

The carbon accounting and Measurement, Reporting, and Verification (MRV) market has undergone a dramatic transformation between 2024 and 2025. According to Mordor Intelligence, the global carbon accounting software market reached $16.98 billion in 2024 and is projected to surge to $78.75 billion by 2030, representing a compound annual growth rate of 27.33%. Meanwhile, CDR (carbon dioxide removal) credit sales hit record highs in Q1 2025, with 780,000 credits contracted—a 122% year-over-year increase. These figures underscore a fundamental shift: carbon accounting and MRV have transitioned from compliance checkboxes to strategic competitive advantages, with significant value pools emerging across the measurement, verification, and reporting value chain.

Why It Matters

The convergence of regulatory pressure, investor demands, and technological innovation has elevated carbon accounting and MRV from a back-office function to a boardroom priority. Three structural forces are reshaping the landscape:

Regulatory acceleration: The EU's Corporate Sustainability Reporting Directive (CSRD) now mandates detailed emissions disclosures for over 50,000 companies operating in Europe. The SEC's proposed climate disclosure rules, though facing legal challenges, have prompted preemptive compliance efforts among US-listed firms. The EU Carbon Border Adjustment Mechanism (CBAM) requires importers to report embedded carbon in goods, creating ripple effects across global supply chains. In the UK, the Financial Conduct Authority's enhanced climate disclosure requirements under TCFD frameworks have made carbon accounting essential for financial services firms.

Scope 3 complexity: Scope 3 emissions—those occurring across a company's value chain—typically represent 70-90% of total corporate carbon footprints. Yet a 2024 CDP analysis found that only 38% of reporting companies include comprehensive Scope 3 inventories, citing data availability and methodological challenges. This gap represents both a risk (regulatory non-compliance, greenwashing accusations) and an opportunity (competitive differentiation through supply chain transparency).

Carbon market integrity: The voluntary carbon market reached approximately $2 billion in transaction value in 2024, but concerns about credit quality have intensified. High-profile investigations revealed that some nature-based offsets delivered a fraction of their claimed emissions reductions. Digital MRV technologies—satellite monitoring, IoT sensors, and AI-powered verification—are now essential for restoring market confidence and enabling premium pricing for high-integrity credits.

Key Concepts

Understanding where value pools exist requires clarity on the carbon accounting and MRV ecosystem's core components:

Carbon accounting encompasses the systematic measurement and reporting of greenhouse gas emissions across three scopes: Scope 1 (direct emissions from owned or controlled sources), Scope 2 (indirect emissions from purchased electricity, steam, heating, and cooling), and Scope 3 (all other indirect emissions in a company's value chain). The GHG Protocol remains the dominant framework, though sector-specific methodologies continue to evolve.

MRV (Measurement, Reporting, and Verification) refers to the processes and technologies that quantify emissions or removals, document them in standardised reports, and validate their accuracy through independent verification. Traditional MRV relied heavily on manual data collection and third-party audits; digital MRV (dMRV) leverages remote sensing, automated data pipelines, and machine learning to reduce costs and increase frequency.

Value pools in this context represent areas where significant economic value accrues—whether through software licensing, professional services, data monetisation, or carbon credit premiums. The primary value pools include:

Value PoolMarket Size (2024)Growth RateKey Capture Mechanisms
Carbon accounting software$16.98–22.2B21–29% CAGRSaaS subscriptions, enterprise licenses
Professional servicesGrowing at 32.3% CAGRFaster than softwareAdvisory, implementation, audit
Carbon credit verificationPart of $2B VCM50%+ CAGRVerification fees, platform commissions
Supply chain data exchangeEmergingN/AAPI access fees, data licensing
Scope 3 solutionsFastest-growing segment>30% CAGRIntegration fees, benchmarking services

What's Working

Cloud-native platforms with automated data ingestion

The shift to cloud-based carbon accounting platforms has dramatically reduced implementation timelines and costs. Cloud deployment captured 74.8% of the 2024 market, with companies like Watershed, Persefoni, and SAP Sustainability Control Tower offering pre-built integrations with ERP systems, utility providers, and supply chain platforms. Watershed's acquisition of VitalMetrics strengthened its emissions factor database, enabling more granular calculations across complex supply chains.

Satellite-based MRV for nature-based solutions

Earth observation technologies have matured significantly. Platforms like Sylvera and Pachama now combine multispectral satellite imagery with machine learning algorithms to assess forest carbon stocks, detect deforestation, and verify afforestation project performance. This approach addresses the scalability challenges of ground-based monitoring while providing near-real-time oversight. In 2024, digital MRV adoption became standard practice for high-quality carbon projects, with over 30 startups active in this space.

Practice-based soil carbon crediting

Agricultural carbon credits have gained traction through practice-based crediting approaches. Rather than requiring expensive direct soil sampling, platforms like Agreena and Indigo Ag use verified practice changes (cover cropping, no-till agriculture, reduced fertiliser application) combined with biogeochemical models to estimate carbon sequestration. The voluntary agriculture carbon credit market grew from $36.1 million in 2024 to an estimated $53.8 million in 2025, with projections reaching $648.3 million by 2034.

Regulatory-aligned reporting frameworks

The alignment between carbon accounting platforms and regulatory requirements has improved substantially. Leading platforms now offer built-in support for CSRD, CDP, TCFD, and emerging frameworks like the International Sustainability Standards Board (ISSB) disclosures. This reduces the burden on sustainability teams and improves audit readiness.

What's Not Working

Scope 3 data quality remains inadequate

Despite advances in software capabilities, Scope 3 emissions calculations continue to rely heavily on spend-based proxies and industry-average emission factors. A 2024 analysis found that Scope 3 inventories calculated using different methodological choices can vary by 200-300% for the same company. This uncertainty undermines comparability and creates opportunities for selective methodology shopping.

Verification bottlenecks persist

The verification industry has not scaled proportionally with demand. Traditional verification bodies face capacity constraints, leading to extended timelines and increased costs. While digital MRV can automate certain monitoring functions, the "last mile" of verification—expert judgment, methodology interpretation, and assurance—remains human-intensive. The average time between funding rounds for climate tech startups extended to 26 months by mid-2024 (up from 11 months in 2021), reflecting broader capital constraints that affect verification infrastructure development.

Interoperability gaps create friction

The proliferation of carbon accounting platforms has created data silos. Companies using different software tools struggle to aggregate group-level emissions or exchange supply chain data efficiently. While initiatives like the Partnership for Carbon Accounting Financials (PCAF) and the Pathfinder Framework for product carbon footprints have established data exchange standards, adoption remains inconsistent.

Credit quality stratification challenges market growth

The voluntary carbon market faces a bifurcation between high-integrity credits (with rigorous MRV, additionality verification, and permanence guarantees) and lower-quality credits that face increasing scrutiny. While premium credits command price premiums of 3-10x, the market lacks universally accepted quality benchmarks, creating confusion for corporate buyers and dampening overall market growth.

Key Players

Established Leaders

Microsoft Cloud for Sustainability: Leverages Azure infrastructure and integrations across the Microsoft ecosystem to provide enterprise-scale carbon accounting. Notable for its Scope 3 data sharing initiatives and climate innovation fund.

SAP Sustainability Control Tower: Offers deep ERP integration through S/4HANA, enabling automated data flows from financial and operational systems. The Green Ledger feature provides audit-ready emissions reporting aligned with regulatory requirements.

Persefoni: GHGP and PCAF-aligned platform with strong traction in financial services. Its Footprint Ledger provides transaction-level emissions attribution, and the free Persefoni Pro tier has driven widespread adoption among mid-market companies.

Sphera: Comprehensive platform spanning Scope 1-3 accounting, product lifecycle assessment, and ESG performance management. Known for extensive emissions factor libraries and real-time analytics capabilities.

IBM Envizi: Enterprise sustainability suite integrating carbon accounting with broader ESG data management, featuring strong capabilities for complex organisational structures and regulatory reporting.

Emerging Startups

Sylvera: London-based carbon credit ratings and analytics platform that has become the de facto standard for assessing offset quality. Uses machine learning and satellite data to rate projects on additionality, permanence, and co-benefits.

Carbonfuture: Provides Digital Trust Infrastructure (MRV+) for durable carbon removal, serving clients including Microsoft, Swiss Re, and the World Economic Forum. Specialises in biochar, BECCS, and direct air capture verification.

Yard Stick: Boston-based company with proprietary soil probes using spectroscopy for instant field analysis without laboratory processing. Addresses the soil carbon measurement bottleneck in agricultural credits.

Greenly: Paris-based platform targeting SMEs with automated carbon accounting and supply chain engagement tools. Notable for accessible pricing and strong European market presence.

Isometric: Focuses on high-quality MRV for soil carbon and nature-based offsets, emphasising scientific rigour and transparency in carbon credit verification.

Key Investors & Funders

Lowercarbon Capital: Closed 70 deals in Q1 2024, with significant investments across carbon removal and MRV technologies. Led by Chris Sacca, the firm has become one of the most active climate tech investors.

Climate Capital: Completed 94 deals in Q1 2024, maintaining broad portfolio coverage across the carbon accounting value chain.

Goldman Sachs Alternatives: Led Osapiens' $120 million Series B in 2024, signalling institutional investor appetite for sustainability software infrastructure.

Brookfield, KKR, TPG, EQT: These infrastructure and growth equity firms deployed the majority of $45.5 billion raised for climate investments in 2024, with increasing focus on climate data and verification assets.

Examples

Microsoft's Carbon Negative Commitment

Microsoft has emerged as the largest corporate purchaser of carbon removal credits, with over $100 million committed to carbon removal purchases in 2024 alone. The company's approach demonstrates sophisticated MRV requirements: it demands third-party verification using peer-reviewed methodologies, favours suppliers with digital monitoring systems, and publishes detailed environmental criteria for its purchases. This buyer-driven quality push has cascaded through the market, establishing de facto standards for high-integrity removal credits. Microsoft's carbon negative by 2030 goal has made it a critical demand signal for the entire carbon removal ecosystem.

Watershed's Data Infrastructure Play

Watershed raised $100 million in Series C funding in 2024 and subsequently acquired VitalMetrics, a GHG emissions database company. This vertical integration strategy—combining software with proprietary emissions factor data—illustrates how value capture is shifting from pure platform plays toward data infrastructure. Watershed's 60+ integrations with accounting, ERP, and supply chain systems position it as a central hub for corporate emissions data, with potential monetisation through benchmarking services, supply chain data exchange, and carbon credit marketplace integration.

Agreena's Agricultural Carbon Model

Danish company Agreena has enrolled over 2,500 farmers across Europe, generating soil carbon credits through practice-based verification. The company's approach combines satellite monitoring of land management changes with biogeochemical models calibrated to local soil and climate conditions. This methodology addresses the cost barrier to direct measurement while providing sufficient rigour for credit issuance. Agreena's partnership with Bayer and other agricultural majors demonstrates how MRV infrastructure can enable new revenue streams for farmers while supporting corporate Scope 3 reduction targets.

Action Checklist

  • Conduct a gap analysis comparing current carbon accounting capabilities against CSRD, ISSB, and SEC disclosure requirements to identify priority investment areas
  • Evaluate Scope 3 data quality by mapping emission factor sources and methodological choices; develop a roadmap for transitioning from spend-based to activity-based calculations
  • Establish supplier engagement programmes to collect primary emissions data from high-impact value chain partners, starting with the top 20% of suppliers by emissions contribution
  • Implement digital MRV technologies for any owned or financed natural assets, including satellite monitoring subscriptions and IoT sensor deployments where appropriate
  • Develop carbon credit procurement criteria that specify MRV requirements, including verification body standards, monitoring frequency, and data transparency expectations
  • Build internal verification capabilities or strategic partnerships to reduce dependence on constrained third-party verification capacity
  • Create interoperability requirements in software procurement to ensure data exchange capabilities with supply chain partners and regulatory reporting systems

FAQ

Q: How should organisations prioritise carbon accounting investments given budget constraints?

A: Prioritisation should follow regulatory exposure, then stakeholder pressure, then voluntary ambition. Organisations subject to CSRD or SEC disclosure rules should focus first on audit-ready Scope 1-2 accounting with regulatory-aligned reporting templates. Once baseline compliance is established, investments should shift to Scope 3 capabilities—particularly supplier data collection and activity-based calculation methodologies. The services segment is growing faster than software (32.3% vs. 27% CAGR) because implementation complexity often exceeds platform licensing costs; budget accordingly for professional services support.

Q: What distinguishes high-quality MRV from basic monitoring?

A: High-quality MRV combines three elements: measurement rigour (using validated methodologies with appropriate uncertainty quantification), transparency (making underlying data and calculations available for scrutiny), and independence (verification by accredited third parties without conflicts of interest). Digital MRV adds temporal granularity (continuous rather than annual monitoring) and spatial precision (project-level rather than regional averages). Premium carbon credits increasingly require dMRV capabilities, with some buyers specifying satellite monitoring, IoT sensor data, or blockchain-based chain of custody as procurement criteria.

Q: How will AI transform carbon accounting and MRV?

A: AI applications are emerging across the value chain. In carbon accounting, machine learning models can categorise spending data, identify anomalies, and improve emission factor matching. In MRV, AI enables satellite image analysis at scale, pattern recognition in sensor data, and predictive modelling for project performance. By 2024, 14.6% of climate tech investment went to AI-related startups, up from 7.5% in 2023. However, AI introduces new risks—model opacity, training data biases, and potential for sophisticated greenwashing—that regulators and verifiers are only beginning to address.

Q: What role do standards and certifications play in MRV credibility?

A: Standards provide essential market infrastructure by establishing methodological consistency and verification requirements. The Verra Verified Carbon Standard (VCS) and Gold Standard dominate the voluntary market, while ISO 14064 provides broader GHG inventory guidance. Emerging frameworks like the Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles aim to establish quality benchmarks that transcend individual registries. However, standards proliferation creates complexity—over 200 methodologies exist across major registries—and the verification industry's capacity constraints mean that standard adherence does not guarantee rigorous oversight.

Q: How should organisations approach the build-vs-buy decision for carbon accounting?

A: The build-vs-buy calculus has shifted decisively toward "buy" for most organisations. Cloud-based platforms offer faster deployment (weeks rather than months), lower total cost of ownership, and continuous methodology updates as regulations evolve. The exception is organisations with unique emissions profiles, complex operational structures, or requirements for deep integration with proprietary systems—these may benefit from hybrid approaches combining commercial platforms with custom extensions. Given the 74.8% cloud deployment share, the market has largely validated the SaaS model for carbon accounting infrastructure.

Sources

Topics

carbonaccountingriskauditabilityremote sensingverificationLCA

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