Climate Credit Analytics Market

Climate Credit Analytics Market Outlook (2023 to 2033)

According to Future Market Insights, the global Climate Credit Analytics Market size has reached USD 0.12 Billion in 2018. Demand for climate credit analytics recorded Y-o-Y growth of 12.7% in 2022, and thus, the global market is expected to reach USD 0.26 Billion in 2023.

Over the projection period 2023-2033, climate credit analytics solutions sales in the region are projected to exhibit 18.4% CAGR and total a market size of USD 1.4 Billion by 2033-end.

The climate credit analytics market refers to the industry involved in analyzing and assessing the climate-related risks and opportunities associated with financial investments.

The market growth is being driven by the application of climate credit analytics to evaluate the climate risk sectors with granular and reliable data for organizations.

Rising carbon emittance factors and associated environmental changes have propelled the exploration of new innovative solutions, including climate credit analytics, to mitigate the climate risk exposure for industries to better their strategic planning.

As climate credit analytics solutions continue to advance and demonstrate their scope of evaluating the analytical data across industries, the market is expected to grow further, with new trends and use cases emerging in the future.

Other Drivers Propelling the Demand for Climate Credit Analytics include:

• Organizations are inclined to measure, monitor, and manage their emissions to meet regulatory requirements and contribute to climate change mitigation goals.
• The rising need for accurate carbon credit or offset measurement, verification, and reporting of emissions is driving the demand for climate credit analytics.
• Climate credit analytics helps organizations track and assess the impact of initiatives such as, emission reduction targets and implementing renewable energy projects.
• Investors and stakeholders are increasingly incorporating environmental, social, and governance (ESG) criteria into their investment decisions.

Challenges for Companies /Manufacturers in the Climate Credit Analytics Market:

• Accessing reliable and consistent data on carbon emissions, offsets, and sustainability metrics can be difficult, particularly when dealing with complex supply chains and multiple stakeholders.
• Inconsistencies and discrepancies in emission calculations and carbon credits can arise due to a lack of universally accepted standards, which limits the transparency and comparability of climate credit analytics.
• Volatility of carbon market such as changes in policy, market demand, and carbon pricing mechanisms can affect the value and liquidity of carbon credits and offsets.
• Lack of knowledge about available tools, methodologies, and best practices can hinder adoption and implementation of climate credit analytics solutions.

Opportunities in the Climate Credit Analytics Industry:

• Climate credit analytics provides organizations with the opportunity to improve their environmental performance by measuring, monitoring, and managing their carbon emissions and sustainability efforts.
• Organizations that proactively adopt climate credit analytics can gain a competitive edge by demonstrating their commitment to risk management and sustainability.
• By utilizing climate credit analytics, organizations can gain valuable insights into strategies for reducing carbon emissions, and exploring potential opportunities to adopt renewable energy sources enabling organizations to take advantage of the ongoing transition towards sustainability.
• Service providers can offer consulting and advisory services to organizations seeking assistance in implementing climate credit analytics.

Latest Trends in the Climate Credit Analytics Market:

• Organizations are increasingly focusing on analyzing and managing Scope 3 emissions (emissions generated by sources not owned or controlled by the organization), which encompass indirect emissions from their value chains to evaluate and reduce the footprints and services.
• Establishment of consistent guidelines and metrics for measuring emissions and calculating carbon credits, enhancing transparency, credibility, and comparability in the carbon market.
• Comprehensive climate analytics platforms are emerging, offering end-to-end solutions for organizations to manage their carbon emissions and sustainability performance.
• Evaluating physical risks associated with climate change impacts, such as extreme weather events, as well as transitioning risks related to policy changes and market shifts.

Attributes	Details
Climate Credit Analytics Market Size (2023)	USD 0.26 Billion
Climate Credit Analytics Market Projected Size (2033)	USD 1.4 Billion
Value CAGR (2023 to 2033)	18.4%

2018 to 2022 Climate Credit Analytics Demand Outlook Compared to 2023 to 2033 Forecast

From 2018 to 2022, the global climate credit analytics market experienced a CAGR of 18.4%, reaching a market size of USD 0.26 Billion in 2023.

From 2018 to 2022, the global climate credit analytics industry witnessed a notable growth due to the rising awareness of mitigating the impact of climate change. The need to consider environmental factors to mitigate the physical risks to the organizational property and other aspects related to climate risks, led to the rise of climate credit analytics.

These analytical data provide organization the insights, by which the major decisions are to be taken, related to their environmental and sustainability strategies, financial investments, and risk management.

Future Forecast for Climate Credit Analytics Industry

Looking ahead, the global climate credit analytics industry is expected to rise at a CAGR of 18.4% from 2023 to 2033. During the forecast period, the market size is expected to reach USD 1.4 Billion.

The climate credit analytics industry is expected to continue its growth course from 2023 to 2033, driven by increasing demand for climate risk analysis and technologies that will help industries such as manufacturing, energy and utility and transportation.

The growth of the climate tech market and continuous research and development in the advancement of technology to help industries to make decisions that are more informed is expected to drive the demand for climate credit analytics during the forecast period.

The market has potential for a significant growth in the East Asia region due to the massive adoption of climate credit analytics in countries such as China and Japan. However, the uncertainty of the climate change and uninformed circumstances may hinder the growth associated with climate credit analytics.

Country-Wise Insights

Climate Credit Analytics Market to Grow in the United States amid Government's Proposal for Climate Risk Management

Country	The United States
Market Size (USD billion) by End of Forecast Period (2033)	USD 0.17 Billion
CAGR % 2023 to End of Forecast (2033)	17.9%

The climate credit analytics in the United States is expected to reach a market share of USD 0.17 Billion by 2033, expanding at a CAGR of 17.9%.

The climate credit analytics in the United States is likely to witness notable growth due to the latest government’s proposal for climate risk management to assist investors to make better investments to improve their portfolio. Moreover, there are detailed factors expected to drive the growth for climate credit analytics in the country are:

• Climate credit analytics has the competence to help organizations for capital modelling and eliminating the impacts of climate change on the physical property.
• The country has the capacity and expertise to conduct advanced research and experiments in the field of climate credit analytics.

Climate Risk Stress Test on Various Institutions for Research Is Propelling the Market for Climate Credit Analytics

Country	The United Kingdom
Market Size (USD billion) by End of Forecast Period (2033)	USD 0.16 Billion
CAGR % 2023 to End of Forecast (2033)	17.7%

The climate credit analytics industry in the United Kingdom is expected to reach a market share of USD 0.16 Billion, expanding at a CAGR of 17.7% during the forecast period. The United Kingdom market is projected to experience growth due to United Kingdom government has been conducting climate risk stress test on various financial institutions.

The objectives of the climate risk stress test is to gain understanding and build a level of preparedness. The European Central Bank (ECB) is working on identifying the possible climate change impact on the banking sector. Resulting, these assessments and stress test are backed by climate credit analytics tools and, is likely to grow in United Kingdom and the rest of the Europe.

Notable Growth Expected in China's Climate Credit Analytics Market Due to Adaptation Plans for Climate Change

Country	China
Market Size (USD billion) by End of Forecast Period (2033)	USD 0.15 Billion
CAGR % 2023 to End of Forecast (2033)	20.3%

The climate credit analytics industry in China is anticipated to reach a market share of USD 0.15 Billion, moving at a CAGR of 20.3% during the forecast period.

The climate credit analytics industry in China is expected to grow remarkably due to its adaptions plans to reduce the factors which are adding up to the excessive carbon emissions, rising sea levels. As the country has suffered from consequences of peaking carbon dioxide emission,

China has made a successive growth in bringing down the carbon emission. China presents a significant opportunity for the exploration, development, and establishment of a comprehensive system centered on the concept of Climate Credit Analytics, catering to the specific needs of industries.

Germany’s Ambitious Goals to bring Carbon Neutrality is driving the Market Growth

Country	Germany
Market Size (USD billion) by End of Forecast Period (2033)	USD 0.13 Billion
CAGR % 2023 to End of Forecast (2033)	12.2%

The climate credit analytics market in Germany is estimated to reach a market share of USD 0.13 Billion by 2033, thriving at a CAGR of 12.2%. Germany has set ambitious climate change mitigation goals, including the target of becoming carbon-neutral in the following decade.

To achieve these goals, there is a growing recognition of the need to integrate climate risk analysis and sustainability considerations into financial decision-making. Therefore, there in an expected growth of climate credit analytics market in Germany.

Demand for Climate Credit Analytics Due to Extensive Policies and Research is driving the Market Growth in India

Country	India
Market Size (USD billion) by End of Forecast Period (2033)	USD 0.10 Billion
CAGR % 2023 to End of Forecast (2033)	13.1%

The climate credit analytics industry in India is expected to reach a market share of USD 0.10 Billion, expanding at a CAGR of 13.1% during the forecast period.

The market in India is likely to witness growth due to its pioneering targets for renewable energy adoption, aiming to increase the share of renewable energy in its overall energy mix. Climate credit analytics can help assess the financial viability and risk profile of renewable energy projects, enabling informed investment decisions.

Category-Wise Insights

Carbon Footprint Management Segment to Dominate Climate Credit Analytics Industry with 18.6% CAGR through 2033

The carbon footprint management segment is expected to dominate the climate credit analytics market with a CAGR of 18.6% from 2023 to 2033. This segment captures a significant market share in 2023 due to its prominent measuring and tracking emissions.

The driving factor for carbon footprint management is it focuses on quantifying and managing the greenhouse gas emissions associated with an organization's activities or products. It involves measuring emissions, identifying reduction opportunities, and implementing strategies to minimize environmental impact.

How the Emission Tracking and Reporting is driving the Climate Credit Analytics Market?

The emission tracking and reporting segment is expected to dominate the Climate credit analytics market with a CAGR of 20.5% from 2023 to 2033. This segment captures a significant market share in 2023 due to its significance in monitoring the harmful emissions.

Emission tracking and reporting involve monitoring and reporting greenhouse gas emissions to comply with regulatory requirements or voluntary initiatives. Climate credit analytics can play a vital role in accurately measuring and reporting emissions, ensuring transparency, and providing data-driven insights for emissions reduction strategies.

How Key Players Stay Competitive in the Climate Credit Analytics Industry?

The Climate Credit Analytics industry is highly competitive, with numerous players vying for market share. In such a scenario, key players must adopt effective strategies to stay ahead of the competition.

Key Strategies Adopted by the Players

Product Innovation

Companies focus on continuous product innovation to enhance their climate credit analytics offerings. Organizations invest in research and development to develop advanced analytical tools, models, and software solutions that can provide more accurate and comprehensive assessments of climate-related risks. Innovation also involves incorporating emerging technologies such as big data analytics to improve data processing, visualization.

Strategic Partnerships and Collaborations

Collaborations and partnerships with other companies, research institutions, and industry experts are crucial for expanding the reach and capabilities of climate credit analytics. Companies form strategic alliances to access complementary expertise, data sources, or technology platforms.

Expansion into Emerging Markets

Companies in the climate credit analytics sector seek opportunities in emerging markets where the demand for sustainable finance and climate risk analysis is growing. Companies establish a presence in these markets by expanding their operations, establishing local partnerships, or acquiring regional companies. This strategy allows companies to cater to the unique needs of emerging markets and capture new business opportunities.

Mergers and Acquisitions

Mergers and acquisitions (M&A) are common strategies employed by companies to strengthen their position in the climate credit analytics market. Companies may acquire or merge with other firms to gain access to new technologies, intellectual property, client bases, or market expertise.

Key Players in the Climate Credit Analytics Industry

• S&P Global
• Oliver Wyman
• Moody's Analytics
• MSCI Inc.
• Dynamhex

Key Developments in the Climate Credit Analytics Market:

• Citi has selected the climate credit analytics transition risk model for its risk teams and institutional clients group divisions, including, research, corporate banking and, markets, in collaboration with Oliver Wyman and S&P Global Market Intelligence. Citi identified that climate credit analytics meets the firm's critical needs after a thorough evaluation process.
• McKinsey Sustainability and Moody's Analytics have joined forces to assist banks in developing climate resilience. McKinsey Sustainability in association with Moody's will collaborate to help clients handle climate risk effectively. This involves physical risk, which is simulated using catastrophe-based models, transition risk, which is simulated using frameworks which will project the effects of the shift to a low-carbon economy, and credit risk.
• Bank of America announced its 2030 objectives to decrease emissions associated with financing activities in three key sectors: automotive manufacturing, energy, and power generation. The targets are outlined in Bank of America's Approach to ZeroTM, which details the company's net zero greenhouse gas emissions tackle and target setting process.

Segmentation Analysis of the Climate Credit Analytics Market

By Solution Type:

• Carbon Footprint Management
• Emission Tracking and Reporting
• Renewable Energy Certificates (RECs) Analytics
• Carbon Offsetting Analytics

By Industry:

• IT& Telecommunications
• BFSI
• Energy and Utilities
• Manufacturing
• Transportation
• Others

By Region:

• North America
• Latin America
• Europe
• East Asia
• South Asia
• Middle East & Africa

Frequently Asked Questions

Which are the Key Asian Countries in the Climate Credit Analytics Market?

China, India, and Japan are the three major Asian nations in the market for climate credit analytics.

Which Industry is the Key Consumer of Climate Credit Analytics Market?

The financial sector is the main industry consuming climate credit analytics.

How much can the Climate Credit Analytics Market grow by 2033 in United States?

From 2023 to 2033, the climate credit analytics market is anticipated to expand at a CAGR of 15%, 12%, and 10% in the United States, the United Kingdom, and Germany, respectively.

What is Current Market Valuation of Climate Credit Analytics Market?

The market for climate credit analytics is currently valued at USD 0.26 billion.

How Big will be the Climate Credit Analytics Market by 2033?

The climate credit analytics industry is anticipated to reach USD 1.4 billion by 2033.