5 reasons you should add carbon metrics to your software solution
Hannah Hylton
TL;DR
Carbon is emerging as a new KPI businesses of all sizes need to account for, especially companies in high-emitting industries (e.g. manufacturing, construction, or transport).
Carbon metrics need to be embedded into day-to-day decision making to effectively reduce emissions.
B2B software across the value chain - from procurement to customer management - should surface carbon as a metric to help enterprises make better decisions, at every level of the organization.
Software providers have a unique opportunity to integrate carbon management features into their solutions, meeting customer demand and unlocking new revenue streams.
Software leaders like Salesforce, Epicor, Celonis, and Kinaxis, have already launched carbon functionalities within their core software solutions. Here are 5 reasons why you should integrate carbon metrics into your offering.
1. Help your customers meet regulatory, investor, and consumer demands
The pressure on businesses to decarbonize is escalating from multiple fronts:
Regulatory Pressure: Governments are enacting stricter environmental regulations such as CBAM and CSRD, with companies facing carbon-related taxes and fines of up to 10 million euros or 5% of their annual revenue for non-compliance.
Investor Pressure: Investors are increasingly prioritizing sustainability, demanding transparency and accountability from businesses. In the past six years, global assets managed under sustainable strategies have more than doubled to $30.7 trillion, now making up one-third of all managed assets.
Consumer Pressure: Consumers are more environmentally conscious than ever, with 72% actively buying more sustainable products than they did five years ago.
2. Unlock new revenue streams
The business opportunity is vast, as 69% of CEOs agree that sustainability is a business growth opportunity for them. Gartner reports that the market for carbon management software is growing rapidly, presenting a lucrative opportunity for enterprise software providers to expand their offerings and tap into new revenue streams.
More and more software providers are recognizing the value of helping their customers measure, visualize, and report emissions, enabling them to make more informed decisions so they can take action. This trend is set to drive major growth in the software industry, particularly for providers who serve verticals with considerable scope 3 emissions.
At Climatiq, we’ve observed a potential upsell of 10-15% in the market, with even higher percentages in certain industries.
3. Outpace the competition
By staying ahead of this trend, you can position your company as a leader in sustainability and gain a strategic advantage. 71% of respondents in an SAP Insight survey see a strong or moderate positive relationship between sustainability and long-term competitiveness.
According to Gartner, demand for capabilities to plan and execute decarbonization initiatives are currently part of asignificant percentage of RFPs (Request for Proposals) – emphasizing the critical role of sustainability in business operations.
Sustainability has now transcended beyond carbon accounting software to become an essential capability within enterprise software platforms. There is a notable surge of new carbon management functionalities within core software solutions, deeming it a critical differentiator for long-term success.
Industry examples show that early adopters are not only improving their market position but also seeing enhanced customer satisfaction.
3,000 companies have pledged net zero commitments, and over 8,000 are currently taking action. Reaching these targets requires active carbon management.
Industry leadersare already making carbon tracking and reduction central to their operations, setting the standard for others to follow. In an SAP Insights survey, almost 90% of respondents said sustainability informs their business decisions. These companies are also actively building sustainability into their business processes.
Decarbonization impacts all business units within enterprises, encompassing strategy and operations. It's no longer confined to Corporate Social Responsibility (CSR) or the CFO; every division must incorporate carbon management into daily operations to drive company-wide sustainability efforts.
5. Leverage the power of (your) software
As a software provider, you offer more than just technical solutions; your in-depth industry knowledge and consolidation of extensive business data create a strategic advantage.
By enriching this data with trusted carbon metrics, you can automate complex carbon calculations for your customers and unlock unique insights and hidden opportunities tailored to their needs. These native and personalized carbon management capabilities deliver unmatched value to your enterprise clients.
"Companies now see managing emissions as critical for doing business and attracting funding. For investors and general partners (GPs), GHG emissions are one of the most important metrics. They are in almost every single data request.” - Mark Fischel, Carbon Product Lead at Novata
Given the diverse nature of businesses, there is no universal approach to managing carbon emissions. However, it is evident that for 86% of companies still relying on spreadsheets often confined to a siloed sustainability department, this approach is no longer effective in driving emission reductions. The issue is compounded by evolving regulations, the specialized expertise required for accurate emission measurements, and the challenges of operationalizing carbon metrics so they are accessible for decision-making.
This necessitates the integration of trusted carbon metrics within business software, providing real-time insights tailored to the wide range of roles and responsibilities that can take action across different business units.
Start building today
As sustainability becomes increasingly embedded in business operations, software providers who adapt and innovate will be at the forefront, driving new revenue streams and increasing customer satisfaction.
“Partnering [with Climatiq] has resulted in a suite of new innovative features and apps, garnering overwhelmingly positive feedback, and encouraging us to expand with new offerings.” - Janina Bauer, Global Head of Sustainability at Celonis
