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As the world intensifies its efforts to combat climate change, businesses are increasingly looking for ways to reduce their environmental impact and meet sustainability targets. SaaS platforms are emerging as powerful tools to help organizations track, manage, and reduce their carbon footprints. The SaaS market for sustainability and carbon tracking is growing rapidly, with a projected CAGR of 20% over the next five years.
These solutions are proving to be highly effective, with companies able to reduce their carbon footprint by up to 30% through streamlined tracking and management. In the U.S., the number of businesses using SaaS for sustainability has doubled in just the past two years, reflecting the growing importance of these tools. Meanwhile, European companies are leading the way, with 60% of large enterprises already using SaaS solutions to support their sustainability goals.
In this blog, we’ll look at how SaaS applications are transforming carbon tracking, helping companies meet their environmental goals while boosting efficiency and sustainability. Whether you’re thinking about building or adopting a platform, understanding the potential of SaaS in this space is key to success.
Key Market Takeaways for SaaS Solutions for Carbon Tracking
According to GrandViewResearch, the market for carbon accounting software is growing fast, with an estimated value of $16.92 billion in 2023 and a projected growth rate of 22.1% annually from 2024 to 2030. This growth is driven by tighter regulations and businesses increasingly committing to sustainability.
Source: GrandViewResearch
As governments worldwide introduce stricter emissions reporting standards, companies are adopting software solutions to track their carbon footprints accurately. Plus, advancements in AI and machine learning are improving how carbon data is managed, creating new opportunities for businesses in this space.
Major companies like IBM, SAP, and Salesforce are already using advanced platforms to help businesses measure and manage their emissions. These tools not only ensure compliance but also support sustainability goals by offering real-time insights into emissions across operations. In Europe, the European Green Deal’s goal of achieving climate neutrality by 2050 is pushing more organizations to adopt carbon-tracking solutions.
One great example of carbon accounting software is….
Persefoni. Known for its accuracy and transparency, the platform uses a robust Calculation Engine to help businesses track emissions across all three scopes (Scope 1, 2, and 3). This makes it ideal for both companies and financial institutions, showing just how important carbon-tracking tools are becoming for long-term sustainability.
developers, with combined 50000+ coding hours experience
Understanding Carbon Footprints and Emission Scopes
A carbon footprint measures the total greenhouse gas emissions—both direct and indirect—that come from a company’s operations. It’s important for businesses to understand the three different scopes of emissions:
- Scope 1: These are direct emissions from sources that a company owns or controls, like company vehicles or facilities.
- Scope 2: These are indirect emissions from the energy the company buys, such as electricity, heating, or cooling.
- Scope 3: This includes all other indirect emissions across the company’s entire value chain, including those from suppliers and product use by customers.
By tracking and measuring these emissions, companies can pinpoint the biggest sources of their carbon output and focus their efforts where they’ll make the most impact. This understanding is the first step toward setting actionable sustainability goals.
Why Carbon Management Matters?
Managing carbon emissions isn’t just an environmental responsibility—it’s a smart business strategy. Companies that track and reduce their carbon emissions often see better Environmental, Social, and Governance ratings, which are becoming more important to both investors and consumers who prioritize sustainability.
Take Microsoft and Unilever as examples. Microsoft has set an internal carbon price of $15 per ton, while Unilever has set €40 per ton. Both have seen significant reductions in emissions thanks to these carbon pricing programs.
In fact, over one-third of the world’s largest publicly traded companies now have net-zero targets, showing that more and more businesses are committing to sustainability and holding themselves accountable.
Why Now is the Perfect Time to Invest in SaaS for Carbon Tracking?
As businesses face increasing pressure to reduce their environmental impact, the demand for tools that help track, report, and cut carbon emissions has surged. SaaS platforms focused on corporate carbon tracking are in a prime position for growth, driven by stricter regulations, consumer expectations for sustainability, and a growing sense of corporate responsibility. This trend makes the market ripe for investment, with several companies already showing strong growth.
These platforms typically generate revenue through subscription models, charging businesses based on their size, carbon footprint complexity, and the services they require. Extra revenue often comes from premium features like advanced reporting, analytics, and carbon offset programs.
Take, for instance, Persefoni, a leading AI-powered platform for enterprise-level carbon measurement and reporting, which raised $70 million in Series C funding in 2022, bringing its valuation to over $500 million.
Another prime example is Watershed, which offers robust tools for measuring, reporting, and reducing emissions across all scopes. Watershed secured $100 million in funding in 2021, focusing on large enterprises.
As regulations tighten and businesses seek to stay compliant, the SaaS carbon tracking market is set to grow even faster—making now an ideal time to invest.
Did you know?
H&M has successfully integrated sustainability into its business using SaaS platforms. They’ve managed to offset 100% of their emissions through renewable energy and reforestation efforts. Plus, by using self-service carbon calculators, they’ve reduced supply chain emissions by an average of 20% each year!
Key Features of Popular SaaS Platforms Used in Carbon Tracking
Here are some key features of popular SaaS platforms used in carbon tracking, along with examples of platforms that offer these features:
1. Data Collection & Analysis
These platforms easily connect with various data sources, like energy meters, supplier invoices, and internal systems, to gather data and calculate emissions across different scopes (Scope 1, 2, and 3). For example, PlanA.Earth is great at integrating data and providing advanced analytics, giving businesses a clear view of their carbon footprint.
2. Emission Calculation & Reporting
These platforms use smart algorithms to accurately measure greenhouse gas (GHG) emissions and generate detailed reports with visual breakdowns. This helps organizations understand their emissions and pinpoint areas for improvement. Carbon Black is an example, offering precise emissions calculations and reports that guide decision-making.
3. Goal Setting & Tracking
With these platforms, businesses can set ambitious emissions reduction targets and track their progress in real-time. They provide actionable insights to help companies make informed decisions. For example, Persefoni offers a goal-setting tool that allows companies to set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) targets and track their progress toward achieving them.
4. Scenario Modeling & Risk Assessment
These platforms help model different carbon reduction scenarios and assess the potential impact of various strategies. This enables businesses to make data-driven choices about the best actions to take. For instance, Scope3 provides powerful scenario modeling features to evaluate different methods and their impact.
5. Regulatory Compliance & Reporting
Staying compliant with sustainability regulations is a breeze with these platforms, as they offer automated data collection, easy reporting templates, and integration with external databases. Circulytics is one example, offering a range of tools to help businesses stay compliant with key sustainability regulations like CDP, TCFD, and SEC.
Development Steps for a SaaS Platform for Carbon Tracking
Developing a SaaS platform for carbon tracking involves a systematic approach to ensure the solution is robust, scalable, and user-friendly. Below are the nine unique developmental steps to create such a platform:
1. Define Business Objectives and User Needs
The development process begins with identifying the core objectives of the platform. This includes understanding user needs, such as tracking carbon emissions, generating compliance reports, and setting sustainability goals. Businesses should prioritize features that align with regulatory standards and provide value to users.
2. Design the Architecture and Tech Stack
A scalable and secure architecture is essential for SaaS platforms. Developers should focus on cloud-based infrastructure, APIs, and microservices to enable real-time data processing and integrations. Popular cloud providers like AWS, Google Cloud, or Microsoft Azure can ensure reliability and scalability.
3. Develop a Data Integration Framework
Build mechanisms to collect and integrate data from diverse sources, such as energy meters, transportation systems, and supply chain platforms. Use APIs to connect with third-party systems and ensure compatibility with IoT devices for real-time data gathering.
4. Design an Intuitive User Interface
Develop a user-friendly and visually appealing interface that simplifies navigation and data visualization. The UI should include dashboards with real-time analytics, charts, and progress trackers to enhance user experience.
5. Implement Emission Calculation Algorithms
Develop algorithms to calculate emissions across Scope 1, Scope 2, and Scope 3 categories. Incorporate methodologies aligned with globally recognized standards, such as the Greenhouse Gas Protocol, to ensure accuracy.
6. Build Reporting and Compliance Features
Integrate robust reporting tools to generate detailed reports in compliance with frameworks like CDP, GRI, or ISO 14064. Ensure the platform can export reports in various formats to meet regulatory and stakeholder requirements.
7. Add Real-Time Monitoring and Goal Tracking
Enable real-time monitoring of carbon emissions and progress tracking toward reduction goals. Include features to set targets, monitor KPIs, and provide actionable insights to users for strategy adjustments.
8. Ensure Data Security and Scalability
Implement advanced security measures to protect sensitive business data, such as encryption and secure authentication protocols. Ensure the platform is scalable to handle increasing data volumes and accommodate additional features as the user base grows.
9. Test, Deploy, and Maintain
Conduct rigorous testing to identify and fix bugs, optimize performance, and ensure compliance. Deploy the platform on a reliable cloud hosting service. Post-deployment, provide ongoing maintenance and updates to address user feedback and stay ahead of evolving standards.
Cost of Developing a SaaS Platform for Carbon Tracking
| Development Phase | Key Activities | Cost Range (USD) |
| 1. Research and Planning | – Market research and feature prioritization.- Selection of a basic technology stack. | $2,000 – $8,000 |
| 2. Frontend Development | – Simplified UI/UX design for core functionality.- Basic frontend development with limited scope. | $3,000 – $12,000 |
| 3. Backend Development | – API integration for essential data exchange.- Basic database setup and backend implementation. | $5,000 – $20,000 |
| 4. Core Features Development | – Minimalistic features like data collection, emission calculation, and basic reporting.- Limited scenario modeling. | $5,000 – $25,000 |
| 5. Testing and Quality Assurance | – Essential unit and integration testing.- Minimal user acceptance testing. | $1,000 – $5,000 |
| 6. Deployment and Maintenance | – Cloud deployment on a budget-friendly provider.- Initial maintenance for the first year. | $1,000 – $5,000 |
Total Estimated Cost – $10,000 – $100,000
Variable Factors Affecting the Development Cost of a Carbon Tracking SaaS Platform
Several variable factors can significantly impact the overall development cost of a carbon tracking SaaS platform. These factors are influenced by the specific needs and goals of the business or company, as well as the complexity of the desired features.
- Platform Complexity: The number and complexity of features, such as data visualization, scenario modeling, and advanced analytics, directly impact development time and cost.
- Technology Stack: The choice of technology stack, including programming languages, frameworks, and cloud platforms, can influence both development costs and ongoing maintenance expenses.
- Team Size and Expertise: The size and experience of the development team are crucial factors. A larger, more experienced team can accelerate development but also increase labor costs.
- Third-Party Integrations: Integrating with third-party tools and services, such as payment gateways, CRM systems, or data analytics platforms, can add to the development effort and cost.
Successful Business Models for SaaS Platforms in Carbon Tracking
With growing environmental awareness and stricter regulations, more businesses are turning to SaaS platforms to track and manage their carbon emissions. Here are some effective business models these platforms use, each offering unique benefits to help companies reduce their carbon footprint.
1. Subscription-Based Model
In the subscription model, customers pay a recurring fee—monthly or annually—to access carbon tracking software. This provides stable revenue and fosters long-term customer relationships.
- Predictable Revenue: Helps businesses forecast income based on subscription numbers.
- Customer Retention: Regular updates and customer support build loyalty.
For instance, EcoHedge offers businesses a subscription service that tracks emissions across all scopes (1, 2, and 3) using real-time data. This model is scalable as companies grow and their tracking needs evolve.
2. Pay-Per-Use Model
The pay-per-use model charges customers based on their actual software usage, which is perfect for businesses with fluctuating needs. This model often leads to higher adoption rates, as users are more willing to try services without committing to large upfront costs, increasing engagement by 30%.
Key Features:
- Flexibility: Customers only pay for what they use, making it cost-effective.
- Scalability: Companies can scale usage without committing to higher fixed costs.
For example, Plan A allows businesses to pay based on the volume of emissions tracked, which is especially beneficial for smaller companies or those just beginning their sustainability efforts.
3. Tiered Pricing Model
The tiered pricing model offers different pricing levels, each with a set of features, allowing businesses to select the plan that fits their size and budget. Tiered pricing can boost revenue by up to 20% by catering to a wider customer base and encouraging customers to upgrade for additional features.
- Customization: Offers plans suited to different business needs.
- Upselling Opportunities: Encourages customers to upgrade as their needs grow.
For example, Emitwise uses tiered pricing, with basic plans for startups and more comprehensive packages for larger enterprises requiring detailed analytics and reporting.
Top 5 SaaS Tools for Sustainability and Carbon Tracking
As companies prioritize sustainability, a variety of SaaS tools have emerged to help track and manage carbon emissions. These platforms make carbon accounting simpler and more accurate and ensure compliance with environmental regulations. Here are five top tools that are making a real impact in the world of carbon management:
1. Salesforce Net Zero Cloud
Salesforce Net Zero Cloud is a powerful carbon accounting tool built on the Salesforce platform, offering companies a seamless way to manage and track carbon emissions across various operations.
- Automated Reporting: This makes it easier for companies to automate their reporting processes and stay compliant.
- Scenario Modeling: Run “what-if” scenarios to assess the impact of operational changes on your carbon footprint.
- Integration Capabilities: Works smoothly with other Salesforce products like CRM and ERP, providing a unified solution.
With updates powered by Salesforce Einstein, the platform now delivers better data quality and pattern recognition, making it ideal for both small and large businesses.
2. IBM Envizi ESG Suite
IBM’s Envizi ESG Suite is a comprehensive tool designed to streamline environmental performance management and integrate seamlessly with other IBM tools for a holistic carbon accounting approach.
- Data Consolidation: Collects and consolidates over 500 types of environmental data to provide a complete view of your carbon footprint.
- Custom Recommendations: Offers tailored suggestions to improve data quality, essential for accurate carbon assessments.
- Consulting Services: IBM Consulting helps businesses customize implementations for their specific needs.
After IBM acquired Envizi in 2022, the suite was integrated into the IBM Environmental Intelligence Suite, expanding its capabilities in climate risk analysis and carbon management.
3. Watershed
Watershed is a climate platform designed for enterprises. It provides tools for measuring, reporting, and reducing emissions. The platform is known for its integration with decarbonization projects and sustainability management.
- Marketplace Integration: Businesses can fund verified decarbonization projects to offset their emissions.
- Data Management Tools: Custom dashboards, vendor data management, and benchmarking tools to track sustainability progress.
- Best Practices Library: Resources to help businesses prioritize the most impactful sustainability actions based on industry needs.
Watershed acquired VitalMetrics, improving its data ingestion and supplier survey features to make emissions tracking more automated and accurate.
4. Normative
Normative is a cloud-based carbon accounting engine that simplifies the process of carbon tracking for businesses with complex supply chains.
- Carbon Accounting Software: Helps companies capture, model, and report carbon data effectively.
- Supplier Engagement Tools: The Carbon Network feature enables businesses to engage with suppliers about their emissions, improving transparency.
- Free Carbon Calculator: Offers a free tool for smaller suppliers to assess their emissions without committing to full software.
Normative has become more popular in Europe by focusing on Scope 3 emissions—the tricky emissions generated by a company’s supply chain.
5. Sphera
Sphera offers a platform designed to automate data capture and reporting for carbon emissions. Combining its expertise in health and safety management with advanced sustainability tools, Sphera helps companies streamline their environmental impact tracking.
- Hotspot Identification Tools: Helps businesses identify areas where their carbon performance needs improvement.
- Industry-Specific Modules: Tailors solutions to different industries, supported by a massive database of over 15,000 datasets from diverse sources.
- Benchmarking Capabilities: Let companies compare their carbon performance against industry peers to understand where they stand.
As a spinout from S&P Global, Sphera brings decades of financial analytics experience to its sustainability platform, strengthening its carbon management and reporting capabilities.
Conclusion
What I think is that developing a SaaS solution for corporate sustainability and carbon tracking is crucial in today’s environmentally-conscious business world. These platforms allow businesses to measure, manage, and reduce their carbon footprint more effectively. By automating processes, providing insights, and ensuring compliance with sustainability regulations, they can greatly improve a company’s environmental impact.
I also believe there’s a growing opportunity for businesses to create and offer similar SaaS platforms. With features like carbon footprint assessments, emissions reduction strategies, and sustainability reporting, these platforms can attract a wide range of clients, from small businesses to large corporations, all looking to enhance their sustainability efforts.
Looking to Develop a SaaS for Corporate Sustainability and Carbon Tracking?
At Idea Usher, with over 500,000 hours of coding experience, we’re the perfect partner to help you develop a top-notch SaaS solution for corporate sustainability and carbon tracking. Our team of experts can work with you to create a platform that helps businesses measure, track, and reduce their environmental impact. From carbon footprint assessments to strategies for cutting emissions, we’ll provide all the tools and insights you need to reach your sustainability goals. Let’s team up and build a greener future together!
FAQs
Q1: How can SaaS help in carbon tracking?
A1: SaaS solutions can make carbon tracking easier and more accurate by automating the collection and analysis of emissions data. These platforms provide real-time insights, track progress toward sustainability goals, and streamline the reporting process, helping businesses stay on top of their environmental impact without the manual hassle.
Q2: What are the features of a SaaS used in carbon management?
A2: SaaS platforms for carbon management come with features like carbon footprint assessments, emissions reduction strategies, real-time data analytics, and customizable dashboards. They also offer automated reporting, helping businesses comply with regulations and make informed decisions to meet their sustainability targets.
Q3: How do SaaS carbon tracking platforms make money?
A3: SaaS platforms for carbon tracking typically make money through subscription fees, where businesses pay for access to the platform’s tools and features. Some platforms may also generate revenue from additional services like consulting, carbon offset purchases, or transaction fees related to carbon credit trading.
Q4: How to make a SaaS solution for carbon tracking?
A4: To create a SaaS solution for carbon tracking, you need a skilled development team that can design a user-friendly platform. Focus on features like accurate emissions data collection, real-time analytics, and seamless reporting. Make sure your platform is scalable and compliant with environmental regulations to appeal to businesses of all sizes looking to reduce their carbon footprints.
