Sustainability Atlas
Climate Finance & Markets·14 min read··...

Trend watch: corporate climate disclosures in 2026 (angle 6)

where the value pools are (and who captures them). Focus on a startup-to-enterprise scale story.

Trend Watch: Corporate Climate Disclosures in 2026

Over 22,000 companies representing more than half of global market capitalization disclosed environmental data through CDP in 2024, while 40% of the world's economy now falls under mandatory climate disclosure rules. The corporate climate disclosure market has reached an inflection point—what was once a voluntary transparency exercise is now a multi-billion dollar compliance infrastructure reshaping how capital flows through emerging markets. For engineers building sustainability systems in India, Brazil, China, and beyond, understanding where the value pools are forming and who is positioned to capture them is essential for both technical decision-making and career trajectory.

The numbers tell a story of acceleration: 82% of public companies now disclose aligned with at least one TCFD recommendation, up from 73% in 2022. India's top 1,000 listed companies face mandatory BRSR Core assurance by 2027. China released trial sustainability disclosure standards in December 2024 with first reports due by April 2026. This regulatory momentum has created a $1.8 billion valuation for climate disclosure software startup Watershed and driven $179 million in total funding to AI-powered carbon accounting platform Persefoni.

Why It Matters

For engineers in emerging markets, the climate disclosure transition represents both a technical challenge and a professional opportunity. The compliance infrastructure being built today—from carbon accounting APIs to automated Scope 3 calculators—will process trillions of dollars in climate-related financial flows over the coming decades. Understanding the architecture of this infrastructure matters for three reasons.

First, disclosure requirements are creating demand for technical talent. Companies subject to SEBI BRSR in India or China's CSDS framework need engineers who can integrate emissions data from electrolyzer facilities, track permitting timelines for renewable projects, and build circularity metrics into supply chain systems. The average EU company spends €150,000 to €1 million on CSRD compliance—a significant portion of which flows to technical implementation.

Second, disclosure mandates are driving hardware and infrastructure investments that engineers will design and operate. Scope 1 and 2 emissions from industrial facilities—whether cement plants, steel mills, or biomaterials processing—must now be measured, verified, and reported with increasing precision. This creates demand for IoT sensor networks, automated data collection pipelines, and integration between operational technology and financial reporting systems.

Third, the shift from voluntary to mandatory disclosure is opening new market opportunities. Companies that identified $5 trillion in climate opportunities through CDP disclosure in 2024—more than double from five years earlier—need technical teams to capture those opportunities. Whether developing green hydrogen infrastructure, scaling electrolyzer capacity, or designing circular economy systems, engineers who understand disclosure requirements can position their work to attract capital.

Key Concepts

Scope 1, 2, and 3 Emissions: The foundational classification for corporate carbon accounting. Scope 1 covers direct emissions from owned sources; Scope 2 covers indirect emissions from purchased energy; Scope 3 encompasses all other indirect emissions across the value chain. For emerging market engineers, Scope 3 is particularly significant: it represents approximately 75% of average company emissions but remains the most technically challenging to measure.

ISSB Standards (IFRS S1 & S2): The International Sustainability Standards Board's global baseline for climate-related disclosures. Adopted or referenced by 30+ jurisdictions including India and China, ISSB standards provide the technical specification that disclosure software must implement. Engineers building reporting systems should treat IFRS S2 as the de facto API contract for climate data.

Assurance and Verification: As disclosure moves from voluntary to mandatory, third-party assurance becomes required. India's BRSR Core mandates assurance for top 500 companies by FY 2025-26. This creates demand for auditable data architectures—systems that can demonstrate data lineage from source (electrolyzer output logs, permitting documents, biomaterials batch records) to reported figure.

Environmental Product Declarations (EPDs): Standardized documents describing the environmental impact of products throughout their lifecycle. For engineers working with low-carbon materials—whether cement alternatives, green steel, or sustainable biomaterials—EPDs provide the data format that enables disclosure at the product level.

Value Chain Mapping: Identifying and quantifying emissions across suppliers and customers. SEBI BRSR requires disclosure covering top upstream and downstream partners representing 75% of purchases and sales. This technical challenge—integrating data from dozens or hundreds of supply chain partners—is where significant engineering complexity and commercial opportunity converge.

What's Working

Persefoni's Freemium-to-Enterprise Model: Persefoni launched Persefoni Pro in March 2024—a free, self-guided platform for SMBs. Within months, over 6,000 companies signed up organically. The company then converts qualified leads to its enterprise Climate Management and Accounting Platform (CMAP), which uses generative AI for emission factor matching, anomaly detection, and utility bill analysis. This approach demonstrates how climate disclosure software can scale across the emerging market landscape where cost sensitivity is higher but volume potential is massive.

Watershed's Enterprise Integrations: Managing 1.9 gigatons of CO2e for over 500 customers including Walmart, Visa, and four of the top six US banks, Watershed has built deep integrations with enterprise systems. Their acquisition of CEDA (emissions database) in 2023 and launch of Open CEDA in 2025 as a free global emissions database shows how platform companies can create moats by controlling reference data. For engineers, Watershed's technical approach—API-first architecture, audit-ready outputs, financed emissions measurement—provides a template for disclosure system design.

India's Phased BRSR Rollout: Rather than mandating full compliance immediately, SEBI structured BRSR implementation in waves: top 1,000 companies for basic reporting, then phased assurance requirements starting with top 500. This graduated approach allows technical capacity to scale with regulatory requirements. December 2024's publication of industry-standard GHG methodology provides the technical specifications engineers need to build compliant systems.

China's ISSB Alignment: China's December 2024 trial sustainability disclosure standards (CSDS) explicitly align with ISSB frameworks while adding China-specific options. For engineers building systems that must serve multiple jurisdictions, this convergence reduces complexity: implement ISSB-compliant architecture once, then layer on jurisdiction-specific requirements.

What's Not Working

SEC Climate Rule Uncertainty: The US Securities and Exchange Commission adopted climate disclosure rules in March 2024, stayed implementation in April 2024 pending legal challenges, and voted to stop defending the rule in March 2025. For engineers building disclosure systems, this regulatory uncertainty complicates architecture decisions. California's SB 253 and SB 261—which require climate disclosure from companies doing business in the state—remain active, but the lack of federal clarity fragments the US market.

EU CSRD Omnibus Revisions: The February 2025 Omnibus proposal would exempt approximately 80% of originally covered companies by raising the employee threshold from 250 to 1,000 and pushing back deadlines for Waves 2-4. Only 42% of Wave 1 companies report being "fully confident" in meeting requirements. For emerging market companies with EU operations, this uncertainty affects when and how disclosure systems must be implemented.

Scope 3 Data Quality: While Scope 1 and 2 emissions can be measured from owned operations, Scope 3 requires data from suppliers and customers who may lack measurement capability. In emerging markets, this challenge is acute: small-scale suppliers may not have the technical infrastructure to provide auditable emissions data. Industry-average emission factors remain the default for many calculations, limiting the precision of disclosed figures.

Green Premium Economics for Disclosure Inputs: Technologies that enable low-carbon operations—electrolyzer systems for green hydrogen, advanced permitting software for renewable projects, biomaterials processing equipment—often carry 15-25% cost premiums. While disclosure requirements create demand for these technologies, the economics remain challenging for emerging market manufacturers operating on thin margins.

Key Players

Established Leaders

Watershed — Enterprise sustainability platform valued at $1.8 billion following $100 million Series C in February 2024. Managing 1.9 gigatons CO2e for Walmart, Visa, FedEx, and major banks. Their Scope 3.15 product specifically addresses financed emissions measurement for financial institutions.

Persefoni — AI-powered carbon accounting platform with $179 million total raised. Won "Climate Technology Innovation of the Year" at 2025 CleanTech Breakthrough Awards. Enterprise partnerships with Workiva, Deloitte, ERM, and Bain support implementation at scale.

CDP (formerly Carbon Disclosure Project) — The global disclosure system processing data from 23,100+ companies, cities, states, and regions in 2025. CDP's questionnaires remain the de facto standard for voluntary disclosure, and their supply chain program serves 270 corporate buyers requiring supplier transparency.

MSCI — Leading ESG ratings provider whose climate metrics influence institutional capital allocation. Their Climate Value-at-Risk (VaR) models translate physical and transition risks into financial terms that disclosure feeds into.

Emerging Startups

Novisto — Montreal-based sustainability reporting platform that raised $27 million Series C in May 2025. Focuses on making disclosure operationally efficient for mid-market companies.

Tracera — Spun out from Bain in 2023, raised $12 million Series A in April 2025. Specializes in Scope 3 emissions measurement across complex supply chains—directly relevant for emerging market manufacturers embedded in global value chains.

WeeFin — Paris-based startup that raised €25 million Series B in April 2025. Targets ESG reporting for financial institutions—relevant as banks in India, Brazil, and other emerging markets face disclosure requirements.

Plan A — Berlin-based carbon management platform serving enterprises like BMW and Deutsche Telekom. Their automated data collection approach addresses the integration challenges that make disclosure technically complex.

Key Investors & Funders

TPG Rise — Led Persefoni's Series C-1 ($50 million) and participated in March 2025 extension ($23 million). TPG's Rise fund specifically targets climate and impact investments at scale.

Greenoaks — Led Watershed's $100 million Series C, demonstrating confidence in enterprise climate software valuations despite regulatory uncertainty.

Sequoia Capital and Kleiner Perkins — Both participated in Watershed rounds, bringing Silicon Valley growth capital to climate disclosure infrastructure.

EU Innovation Fund — Public funding source supporting climate technology deployment in Europe, with spillover effects for emerging market companies operating in EU supply chains.

Action Checklist

  1. Audit your emissions data infrastructure: Map current data sources for Scope 1, 2, and 3 emissions across your operations. Identify gaps where manual processes or industry-average factors are used instead of measured values. Prioritize automation for high-volume data streams from electrolyzer systems, energy meters, and production equipment.

  2. Implement ISSB-aligned data schemas: Design your internal data architecture around IFRS S1 and S2 requirements. This creates portability across jurisdictions as India, China, and other emerging markets adopt ISSB-aligned frameworks.

  3. Establish supplier data protocols: For Scope 3 compliance, develop technical specifications and onboarding processes for supply chain data sharing. Consider tiered requirements: detailed data from major suppliers (75% of spend) and validated estimates for the long tail.

  4. Build audit trails from source: Disclosure assurance requires demonstrating data lineage. Implement logging, version control, and access controls that support third-party verification. Treat emissions data with the same rigor as financial data.

  5. Integrate disclosure into operational systems: Rather than treating disclosure as an annual reporting exercise, embed emissions calculation into production systems. Real-time carbon intensity metrics enable operational optimization beyond compliance.

  6. Monitor regulatory developments actively: Subscribe to updates from SEBI (India), Ministry of Finance (China), CVM (Brazil), and ISSB. Regulatory timelines affect build vs. buy decisions for disclosure systems.

  7. Evaluate platform partnerships: Assess whether Persefoni, Watershed, or regional alternatives fit your technical requirements. Consider API availability, jurisdiction coverage, and integration complexity. For emerging market operations, evaluate local language support and regional data center availability.

  8. Develop internal expertise: Climate disclosure is becoming a specialized engineering discipline. Invest in training for GHG Protocol methodology, lifecycle assessment for biomaterials and low-carbon products, and assurance-ready system design.

FAQ

Q: What are the most significant disclosure requirements for companies operating in India's manufacturing sector?

A: India's top 1,000 listed companies must file BRSR (Business Responsibility and Sustainability Reporting) with mandatory Scope 1 and 2 emissions disclosure. The enhanced BRSR Core framework adds assurance requirements: top 500 companies by FY 2025-26, expanding to top 1,000 by FY 2026-27. Value chain disclosures covering top suppliers and customers (75% of purchases and sales) become mandatory for assessment from FY 2026-27. For manufacturing operations involving electrolyzer systems, permitting-intensive facilities, or biomaterials production, this means implementing auditable measurement systems with 18-24 months lead time. December 2024's SEBI industry standards publication provides specific GHG methodology guidance that engineers should use as technical specifications.

Q: How do disclosure requirements differ between SEC climate rules and emerging market frameworks like India's BRSR or China's CSDS?

A: The SEC climate rule, adopted in March 2024, was stayed pending legal challenges and is not currently being defended by the Commission. In contrast, India's BRSR and China's CSDS are progressing on defined timelines. India requires mandatory disclosure for top 1,000 companies now, with phased assurance through 2027. China's trial CSDS standards released December 2024 mandate first reports by April 2026. All frameworks reference ISSB standards (IFRS S1/S2) as a baseline, but with jurisdiction-specific additions. For engineers, the practical implication is that ISSB-aligned system architecture provides the best foundation—it satisfies emerging market requirements while remaining ready for eventual US standardization.

Q: What technical capabilities differentiate leading climate disclosure software platforms?

A: The leading platforms differentiate on four dimensions. First, emission factor databases: Watershed's CEDA acquisition and Open CEDA launch give it proprietary reference data. Persefoni's AI-powered emission factor matching reduces manual classification work. Second, integration depth: Watershed's 500+ enterprise customers include deep ERP and financial system integrations; Persefoni partners with Workiva for SEC filing workflows. Third, Scope 3 capabilities: Tracera and specialized players focus on supply chain emissions where data collection is most challenging. Fourth, jurisdiction coverage: platforms must support CSRD, ISSB, BRSR, SEC, and California requirements simultaneously. For engineers evaluating platforms, API availability, audit trail capabilities, and regional data handling (important for circularity metrics and biomaterials tracking in emerging markets) should drive selection.

Q: What is the expected timeline for climate disclosure to become mandatory across all major emerging markets?

A: India leads with BRSR already mandatory for top 1,000 companies and assurance phasing in through 2027. China's CSDS trial standards require first reports by April 2026 (covering FY 2025), with progressive rollout expected. Brazil, as 2024 G20 Sustainable Finance Working Group lead, is developing national frameworks likely to formalize by 2026-2027 aligned with ISSB. The broader pattern shows 30+ jurisdictions progressing toward ISSB adoption. For engineering planning purposes, assume that any company with >$100 million revenue operating in multiple jurisdictions will face some form of mandatory disclosure by 2027.

Q: How do I build systems that can handle both current voluntary disclosure and future mandatory requirements?

A: Start with ISSB IFRS S1 and S2 as your core data model—these standards are becoming the global baseline. Implement measurement capabilities for Scope 1, 2, and 3 emissions with auditable data lineage from source systems (production equipment, energy meters, permitting databases). Design for assurance from day one: third-party verification requires demonstrable data integrity, version control, and access logging. Build modular reporting outputs that can generate CDP questionnaire responses, BRSR filings, CSRD reports, and CSDS submissions from the same underlying data. Finally, treat regulatory monitoring as an ongoing engineering requirement—disclosure standards are evolving, and your systems must evolve with them.

Sources

The corporate climate disclosure landscape is consolidating around ISSB standards while creating distinct technical and commercial opportunities for engineers who understand both the regulatory requirements and the software infrastructure being built to meet them. For those in emerging markets, the next 24 months represent a window to build expertise in disclosure systems that will process trillions in climate-related capital flows for decades to come.

Topics

electrolyzerpermittingcircularitySEC climate rulebiomaterials

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