Accounting for your company's carbon footprint, at least in the short term, might not be driven by cap-and-trade regulation as much as it will be by public opinion – especially when that public happens to be a multi-billion dollar pension fund or a brilliant engineer looking to work for the greenest company out there.

That's one of the outtakes of a report on enterprise carbon accounting software released Tuesday by Groom Energy Solutions and Greentech Media.

The report found that the market for carbon accounting software in the United States today is a relatively paltry $10 million or so, although it's expected to double annually over the coming years, said Paul Baier, vice president of consulting for Groom Energy.

That may not sound very promising at first for the raft of carbon accounting software startups like CarbonFlow, Planet Metrics and CSRWare looking to carbon cap-and-trade legislation now being debated in Congress to jump-start the market (see Come Get 'Em: Gov't Plans to Give Freebies Under Cap-and-Trade).

But cap-and-trade regimes are far from the only reason for companies to engage in more accurate carbon reporting, Baier said. After all, of the companies the report tracked that are calculating their carbon footprints, only 300 or so have installed software to do so – though that number is expected to quadruple over the next two years.

The more than 3,000 remaining companies calculating their carbon footprints are doing it the old-fashioned way, he said – by spreadsheet. That includes companies in Europe, which has had a cap-and-trade system in place since 2005.

While that will undoubtedly change as the size and complexity of the task grows beyond a spreadsheet's comfort zone, it won't necessarily be mandatory reporting that will make it happen, he said.

That's because the cap-and-trade system in place in Europe – as well as the most recent version of a cap-and-trade bill introduced by Reps. Henry Waxman, D-Calif., and Edward Markey, D-Mass. – monitors greenhouse-gas emissions by individual facility, not across a company's entire operations, he said.

In Europe, most companies among the 14,000 or so regulated under cap-and-trade have opted to use consultants to develop spreadsheets to handle that relatively simple task, he said.

The cap-and-trade bill making its way through Congress would require monitoring and reporting at facilities that produce more than 25,000 metric tons of carbon dioxide per year, Baier said (see House Energy Bill Draft: Cap-and-Trade Included).

That will cover only the largest power plants and industrial facilities – and that's only if the legislation is passed into law, of course, which is an uncertain prospect (see Australia Delays Cap-and-Trade Program, No Surprise There!).

Some states are considering legislation that would require monitoring for those emitting 10,000 or more metric tons a year, but "that's still a pretty big factory," he said.

Still, that doesn't matter when it comes to the growth of the carbon accounting software market, he said. In fact, he predicted that more than half the companies he expects to see buying such software in the coming years won't have any facilities big enough to face mandatory reporting.

Instead, it's public opinion that's driving the adoption, he said – most specifically, the opinion of investors, although that of customers and prospective employees will also play a part.

Groups like Ceres, Trucost  and the Carbon Disclosure Project that represent investors on environmental and social responsibility issues "are all backed by trillions of dollars of pension fund money, and those investors want good solid reporting with good data," he said (see Green Light post).

That's the gist of a report released Tuesday by Trucost and nonprofit Investor Responsibility Research Center Institute, which found that two-thirds of the companies listed on the S&P 500 index had what the report called "inadequate" disclosure of greenhouse-gas emissions.

Companies that are promoting their greenhouse gas reduction efforts "want to do well on those reports," he said.

Then there's the opinion of prospective employees to consider, he added.

"If you're in a hypercompetitive market for Berkeley engineers, you'd better be pretty green," he said, relating the story of one Boston company he spoke with that lost two prospective employees to other firms because the two were dissatisfied with the company's carbon accounting practices.

"Many companies will do the bare minimum" to face mandatory reporting requirements that may come, he said. "But there are many companies that are doing a lot more because they see a competitive advantage to it."

So who are today's leaders in enterprise carbon accounting software?

While there were many startups among the 51 software vendors the report tracked, only one was among those that held top market share in the field – and it has just been acquired, Baier said.

That's Clear Standards, which was acquired by enterprise software giant SAP last month (see Carbon Consolidation Begins With SAP's Latest Buy).

It isn't likely to be the last, however. Enterprise software rivals like Microsoft, CA and IBM are entering the field, Baier noted (see IBM Focuses Supply Chain Heft on Green).

Acquisition remains a likely exit strategy for many startups in the field, given that bringing such products to the world's corporations will take a lot of sales and marketing heft.

Germany's PE International, a software company on the report's top market share list that's specialized in carbon accounting for such customers as Kraft Foods and Carnival Cruise Lines, may be an acquisition target itself soon enough, Baier said.

Industrial conglomerate Johnson Controls is another market share leader in the field through its acquisition last year of Global WorkPlace, which has companies including Dell, Xerox and Pfizer as clients, he added.

The remaining market share leaders – Enviance, ESS, IHS, and ProcessMAP – are in the so-called environmental, health and safety business, helping companies with such tasks as monitoring pollution to meet air and water quality and human health standards, Baier said. They've gotten there by adding carbon accounting to their already extensive list of offerings, he said.

The slew of startups and established companies offering energy management software are likely to find similar opportunities to add carbon tracking as a service, since most companies' carbon footprints are closely tied to the power they consume (see Energy Management Startup Hara Nabs Coke as Client, $6M From Kleiner).

Tags: carbonflow, clear standards, enterprise carbon management software, groom energy solutions, hara, johnson controls, planet metrics, sap