Watershed: Carbon accounting and climate disclosure software for large enterprises

Overview

Watershed Technology, Inc. was founded in San Francisco in 2019 and grew quickly on venture money: a $70 million Series B in February 2022 made it a unicorn at a $1 billion valuation, and a $100 million Series C in February 2024 valued it at $1.8 billion, which ESG Today described at the time as the highest valuation of any climate software company. Early customers were technology companies with mature climate programmes; Verdantix noted in 2022 that industrials and banks were not then its focus. That has changed. By 2026 the company reports that a majority of the six largest US banks and six of the ten largest private equity firms use its Watershed Finance product, alongside multinational industrial and logistics groups such as DP World and Smiths Group for CSRD reporting.

Two things set it apart in a crowded carbon accounting market. The first is data. In April 2023 it bought VitalMetrics, developer of the CEDA multi-regional input-output database, which it now publishes in a free Open CEDA edition under a Creative Commons licence alongside a paid edition. The second is breadth: measurement, disclosure for several regimes, reduction planning and a marketplace for carbon removal and clean power sit on one data set, so a figure calculated once can be reused in each report.

Analysts rate it highly. Verdantix named it a leader in its 2023 Green Quadrant for enterprise carbon management software, and the company reports leader placements from Verdantix and Forrester in 2025 and 2026. TIME included it among the ten most influential sustainability companies of 2026, citing the Cornerstone open data initiative it launched with Stanford.

Offering

Watershed sells one cloud platform, organised around three jobs it calls Measure, Report and Act, with services from its own climate and policy staff on top. Prices are not published.

Measure

The measurement module builds corporate Scope 1, 2 and 3 inventories, with methodologies for all 15 Scope 3 categories. It supports both spend-based calculations from financial data and activity-based calculations from quantities, material types and mass, and customers can bring their own emissions factors or adjust the defaults. Scope 1 and 2 results can be broken down by the seven Kyoto gases, and water and waste data can be collected alongside emissions. The company reports more than 2.3 million built-in emissions factors and peer benchmarks covering more than 13,000 companies.

Report

The reporting module reuses the same governed data across frameworks. Watershed documents workflows for CSRD and the ESRS, including mapping a double materiality assessment to ESRS requirements and exporting data lineage for limited assurance; California SB 253 and SB 261; ISSB IFRS S2; and CDP, where responses can be submitted by API. Its finance pages also name OSFI, SFDR, TCFD and SECR. An AI assistant prepares first versions of disclosure text from the customer's own data, and nothing is submitted without a person signing it off.

Act and the Marketplace

The Act module covers targets, hotspot and scenario analysis, supplier engagement and progress tracking. Through the Marketplace, customers buy carbon removal from more than 30 projects, sustainable aviation fuel certificates, energy attribute certificates and virtual power purchase agreements, with Watershed aggregating demand across buyers. Only customers can use it.

Other products

• Watershed Finance measures PCAF-aligned financed and insurance-associated emissions across listed equity, corporate bonds, business loans, commercial real estate and sovereign debt.
• Product Footprints calculates product-level carbon footprints from bills of materials.
• CEDA: 60,000 spend-based emissions factors for 400 industries in 148 countries and regions, updated annually.
• Watershed Energy Management, announced in September 2026, combines utility data, weather-normalised use and equipment condition into retrofit and solar plans. It is in use with early customers and goes on general sale in 2027.

Technology

Watershed is multi-tenant software that the company says has been built on Google Cloud since 2019, using BigQuery to turn business records into carbon data; it joined the Google Cloud Ready Sustainability programme in March 2023. The Trust Center lists Google Cloud Platform as its infrastructure subprocessor in the US and EU, and states that customer data is stored in US or EU data centres according to the customer's choice. Cloudflare provides traffic filtering and a web application firewall.

Data in

• Business systems. The company reports more than 60 pre-built integrations with business systems, but publishes no list of named connectors and no public API reference. Its subprocessor list names Merge, a unified API vendor, as the provider of API integrations, and OneSchema for file upload and validation.
• Files and documents. Spreadsheets in several formats, and PDFs such as utility bills read by AI; the Trust Center publishes model cards for utility bill scanning and financial mapping.
• Spend and activity data. General ledger and procurement spend feeds spend-based factors; quantities, materials and mass feed activity-based factors.
• Suppliers and portfolios. Supplier surveys collect primary data, and Watershed Finance matches holdings to public footprints from CDP and annual reports.

Calculation and audit trail

Each figure keeps its calculation lineage, and the company reports more than 150 automated error checks on every footprint. Methodologies are assured by a third party each year, and the company states that every customer footprint that has been audited has passed. For SB 253 it offers a Guaranteed Assurance programme: customers using its standard methodologies and verification support package who fail limited assurance get the next year's fees waived, up to $250,000. Access uses role-based and discretionary access control that can restrict data by geography or site category.

Security

The Trust Center lists SOC 1 Type 2 and SOC 2 Type 2 reports dated 2026, an ISO 27001:2022 certificate with a statement of applicability, and GDPR and CCPA compliance; the reports are available on request. It also publishes an EU AI Act summary. The security page sets out a responsible disclosure policy. None of the audit reports is public.

Customers

Watershed shows Walmart, Wayfair, FedEx, Dell, Shopify, Johnson & Johnson, BlackRock, Verizon and Canva among its customers on its home page. Independent coverage of the 2024 round named General Mills, Suncorp, Medline, BBVA, Paramount, Spotify and Klarna (ESG Today) and Walmart, BlackRock, Stripe and Bain Capital (Trellis). The company reports that its customers' emissions under management grew from 20 million tonnes CO₂e in early 2022 to 479 million tonnes by February 2024, and to more than 4 Gt CO₂e in 2026.

DP World

The ports and logistics group put its European business on Watershed for CSRD, consolidating emissions across dozens of legal entities that had previously been reported through an internal health and safety tool. It started on the web platform without integrating systems first, and DP World reports saving hundreds of thousands in consultant and contractor fees.

Smiths Group

The engineering group, with four subsidiaries in 50 countries, chose Watershed for CSRD after evaluating legacy platforms and start-ups, citing audit readiness, lower total cost of ownership and supply chain emissions analysis.

Energy and clean power

In September 2026 the company reported that it had ingested energy data for more than 324,000 facilities covering nearly 1,400 TWh of annual use, and that its customers had funded $500 million of new clean energy with nearly 400 MW of capacity. Albany International is an early user of Watershed Energy Management.

Markets

Watershed sells to large enterprises in technology, retail, logistics, manufacturing, healthcare and professional services, and to banks, asset managers, private equity firms and insurers. It has offices in San Francisco, New York, London, Paris, Berlin, Sydney and Mexico City, its first Latin American office, and its site is published in US, UK and Australian English, German and French.

Demand follows regulation. The company reports more than 200 customers reporting under California's climate laws, and it has built EU and UK workflows around CSRD, the ESRS and SECR.

Partners and channels

• Consulting: Deloitte, KPMG, EY, Accenture, Capgemini, ERM, BSR and Applied Value Group (partners), which provide programme design, data work and assurance preparation around the software.
• Technology and data: Workiva, Google, How Good and ecoinvent.
• Standards bodies: CDP lists Watershed as a Gold accredited software solutions provider for climate change, and PCAF lists it among its global accredited partners; Watershed customers that are PCAF signatories can use the PCAF emissions factor database in the platform.
• Clean power and removals: more than 45 Marketplace partners, including Frontier's advance market commitment for permanent carbon removal.

The analyst evaluations it cites compared it with Persefoni, Sweep, Sphera, Workiva, Salesforce and Microsoft, among others.

Company

Watershed Technology, Inc. is a privately held company headquartered in San Francisco. Co-founder Taylor Francis speaks for it in its announcements, and its investors include Sequoia Capital, Kleiner Perkins and Greenoaks.

Funding

The Series C also drew Kleiner Perkins, Sequoia Capital, Elad Gil, Emerson Collective, Galvanize Climate Solutions and Neo, and Verdantix calculated that it brought total funding to $239 million. No later round has been announced.

Acquisitions and initiatives

In April 2023 Watershed acquired VitalMetrics, whose founder had developed CEDA from work begun at Leiden University in 2001. In 2025 it launched the Cornerstone Sustainability Data Initiative with ERG and the Stanford Doerr School of Sustainability to keep a free, updated alternative to the US EPA's supply chain emissions factors, and in July 2026 it published an open framework for estimating corporate AI emissions, covered by Heatmap.

People

The company described itself as nearly 400 people on its about page; LinkedIn company data showed 638 employees in July 2026. Its stated 2030 goal is to help reduce or remove 500 Mt CO₂e, which it equates to about 1% of annual global emissions.