Workiva Acquires Sustain.Life, Bringing Together ESG Reporting And Carbon Management Software

Workiva Acquires Sustain.Life, Bringing Together ESG Reporting And Carbon Management Software

ESG reporting software vendors are emerging as new entrants into the carbon management market. On 18^th June 2024, Workiva announced the launch of Workiva Carbon, following its acquisition of Sustain.Life, a US-based carbon management software provider that raised $19 million in seed funding in 2023. Through the integration of the Sustain.Life platform, Workiva Carbon will offer capabilities such as Scope 1-3 carbon emissions calculation, supplier engagement surveys, net zero target management and reporting.

On the flip side, traditionally ‘pure-play’ carbon management software providers are increasingly releasing ESG reporting offerings. For example, Watershed has launched a solution aimed at helping firms collect and manage ESG data for disclosure under the EU CSRD.

Over recent years, we have seen the emergence of numerous software start-ups with distinct focus on ESG reporting or on carbon management, as well as significant investment and acquisition activity in the market. In just the first half of 2024, a whopping total of $175 million has been raised by four carbon management software vendors: Watershed ($100 million); Greenly ($52 million); Carbonfact ($15 million); and cozero ($6.9 million).

With – and even without – such funding, vendors from diverse heritages continue to invest in product developments for both carbon management and ESG reporting use cases. EHS vendors have long been leveraging their environmental expertise to continually create and incorporate carbon management features into their more comprehensive suite of applications, including ESG reporting. Supply chain sustainability software vendors have equally been developing more advanced and granular functionality for carbon management, specifically – and unsurprisingly – around Scope 3, as well as – like Assent’s CSRD Materiality tool - to support ESG reporting requirements across the value chain.

The underlying rationale behind these product developments and market convergence is that vendors are seeking to enlarge the total addressable market for their sustainability offerings. Verdantix expects the combined market for carbon management and ESG reporting software to be over $5.3 billion in 2027. What's more, we’ve calculated the market for supply chain sustainability software to be $5.1 billion in 2027, according to the Verdantix forecast.

Customers with existing vendor relationships prefer to work with the same provider for other use cases to overcome implementation obstacles. For instance, Verdantix finds that 40% of firms purchase ESG reporting software from a vendor they are already working with in order to consolidate systems, maintain consistency and ease the implementation process. Indeed, results from our as yet unpublished 2024 ESG global corporate survey show that over 80% of organizations view integrating software with existing data and applications as one of their top two challenges when selecting and implementing software for sustainability.

To learn more about the ESG reporting and carbon management software market, read the following reports:

Verdantix Green Quadrant: ESG Reporting And Data Management Software

Verdantix Green Quadrant: Enterprise Carbon Management Software 2023