Top 10 ESG Startups to Watch in 2026

Executive Summary

LONDON, February 20, 2026 — The environmental, social, and governance (ESG) startup ecosystem has matured into a multi-billion-dollar sector, driven by mandatory disclosure requirements, surging investor demand, and the rapid integration of artificial intelligence into sustainability management. According to Fortune Business Insights, the ESG reporting software market was valued at $1.32 billion in 2025 and is expected to grow at a CAGR of 21.02 percent, reaching $7.36 billion by 2034. Meanwhile, Grand View Research projects the global sustainable finance market will reach $2,589.90 billion by 2030, indicating the immense capital flowing towards ESG-oriented ventures.

• EcoVadis leads the field as the only ESG unicorn preparing for a potential Nasdaq IPO, with $732 million raised and 55,000+ corporate customers
• Watershed achieved a $1.8 billion valuation in 2024, securing major US banking and private equity clients for its carbon accounting platform
• Osapiens became Europe's newest ESG unicorn in January 2026 with a $100 million Series C led by BlackRock and Temasek
• Persefoni raised $194 million across five rounds and is targeting profitability in 2026 with AI-powered carbon management
• Clarity AI manages sustainability data covering 70,000+ companies with backing from SoftBank and BlackRock
• Carbon accounting, supply chain transparency, and AI-driven compliance automation are the three dominant themes among funded ESG startups
• Total early and growth-stage climate investment reached $13.2 billion in H1 2025, with ESG compliance platforms attracting significant capital

These developments underscore a pivotal moment for ESG technology, as regulatory frameworks including the EU Corporate Sustainability Reporting Directive (CSRD), California's climate disclosure laws (SB 253 and SB 261), and ISSB Standards adopted by 36 jurisdictions create urgent demand for compliance infrastructure. As we explored in our coverage of ESG professional education, the market is rapidly professionalising across all dimensions.

Top 10 ESG Startups – 2026 Ranking by Total Funding

Rank	Company	HQ	Founded	Total Funding	Focus Area
1	EcoVadis	Paris, France	2007	$732M	Supply Chain ESG Ratings
2	Watershed	San Francisco, USA	2019	$185M	Enterprise Carbon Accounting
3	Persefoni	Tempe, USA	2020	$194M	AI Carbon Management
4	Clarity AI	Madrid / New York	2017	$117M+	ESG Data Analytics
5	Sweep	Paris, France	2020	~$100M	Carbon & ESG Management
6	Osapiens	Mannheim, Germany	2018	$100M+	ESG Compliance & Supply Chain
7	CO280	USA	2022	$117M	Mobile Carbon Capture
8	Heart Aerospace	Gothenburg, Sweden	2018	$107M+	Electric Aviation
9	Redwoods.ai	USA	2021	Funded	AI ESG Compliance
10	Fortifai	Norway	2023	€1.7M	SME ESG Platform

1. EcoVadis — Supply Chain Sustainability Ratings

Headquarters: Paris, France
Founded: 2007
Total Funding: $732 million across 4 rounds
Valuation: $1 billion+ (unicorn)
Employees: ~1,786
Key Investors: General Atlantic, Astorg, BeyondNetZero (BlackRock), GIC
Website: ecovadis.com

EcoVadis is the undisputed global leader in business sustainability ratings and intelligence for supply chains, assessing companies across four ESG themes: Environment, Labour and Human Rights, Ethics, and Sustainable Procurement. The platform now covers over 150,000 businesses across 220 industry categories in 180 countries, with 55,000+ corporate customers including Johnson and Johnson, L'Oreal, Unilever, BASF, JPMorgan, and Pfizer relying on its ratings for supplier due diligence and procurement decisions.

The company raised its landmark $500 million Series D in June 2022, led by General Atlantic and Astorg, propelling it to unicorn status. With estimated 2024 revenue of $162.2 million according to Getlatka, EcoVadis is preparing for a potential Nasdaq IPO in 2025-2026, working with EightAdvisory on financial structuring and compliance readiness. In January 2026, EcoVadis sustainability assessments became a key search criterion on Amazon Business Stores, significantly expanding the platform's reach. The company also launched Worker Voice Connect in October 2025 to strengthen human rights accountability across supply chains, and won the Microsoft Local Partner Award FY25 in AI Transformation. Its medal-based scoring system — Bronze, Silver, Gold, and Platinum (top 1 percent) — has become an industry standard that procurement departments worldwide now require from their suppliers.

2. Watershed — Enterprise Carbon Accounting Platform

Headquarters: San Francisco, California
Founded: 2019
Total Funding: $185 million across 4 rounds
Valuation: $1.8 billion (unicorn)
Employees: ~400
Key Investors: Greenoaks (lead), Sequoia Capital, Kleiner Perkins, Galvanize Climate Solutions
Website: watershed.com

Watershed has established itself as the premier enterprise sustainability platform, achieving unicorn status in 2022 — just three years after its founding — and securing a $1.8 billion valuation with its $100 million Series C in February 2024 led by Greenoaks. The platform serves four of the top six US banks and four of the top ten private equity firms, alongside clients including General Mills, Carlyle, BBVA, Paramount, and Block.

Watershed's 2025-2026 trajectory has been marked by strategic expansion and product innovation. In September 2025, the company launched Product Footprints AI, enabling granular product-level emissions measurement using machine learning. In February 2026, Watershed partnered with Lumen Technologies for renewable energy solutions, demonstrating its expanding scope beyond pure carbon accounting into actionable decarbonisation. The company also acquired VitalMetrics to strengthen its environmental impact assessment capabilities and signed a 15,000-square-foot lease at 440 Lafayette Street in New York City in January 2026, signalling continued growth. Recognised as a Leader in the Verdantix Green Quadrant for ESG and Sustainability Reporting Software 2025, Watershed raised an additional $14.5 million Series C extension in December 2025 to fuel its enterprise expansion.

3. Persefoni — AI-Powered Carbon Management

Headquarters: Tempe, Arizona
Founded: 2020
Total Funding: $194 million across 5 rounds
Employees: ~295
Key Investors: TPG Rise (lead), Sumitomo Mitsui Banking Corporation, Prelude Ventures
Website: persefoni.com

Persefoni has emerged as a leading AI-powered climate management and accounting platform, raising $194 million across five funding rounds including a $23 million Series C extension in April 2025 led by TPG Rise, and a prior $50 million Series C-1 in August 2023. The platform enables organisations to measure, manage, and report their carbon footprints across Scope 1, 2, and 3 emissions with enterprise-grade audit and compliance capabilities aligned with the GHG Protocol, ISSB Standards, and CSRD requirements.

Persefoni's 2025-2026 product roadmap demonstrates its AI-first strategy, featuring smart emission factor matching, PersefoniGPT for natural language sustainability queries, energy and utility bill AI processing, product carbon footprint and life cycle assessment capabilities, and enhanced audit controls. The company launched Persefoni Pro as a free tier in March 2024, attracting over 6,000 organic sign-ups and establishing a significant pipeline for enterprise conversion. Targeting profitability in H2 2025, Persefoni represents the intersection of deep climate science expertise and enterprise AI, positioning it as a critical infrastructure provider for the estimated 50,000 companies expected to fall under mandatory emissions reporting requirements by 2027.

4. Clarity AI — ESG Data and Analytics Intelligence

Headquarters: Madrid, Spain / New York, USA
Founded: 2017
Total Funding: $117 million+
Valuation: $450 million (August 2021)
Employees: ~350
Key Investors: Prosus (lead, Series B 2025), SoftBank Vision Fund 2, BlackRock, Deutsche Borse
Website: clarity.ai

Clarity AI is a sustainability technology platform that uses machine learning and big data to deliver ESG analytics covering 70,000+ companies, 450,000+ funds, and 400+ countries and governments. With $55 million in 2023 revenue and 70,000+ clients managing trillions in assets under management, the company has become the institutional investor's platform of choice for ESG portfolio analysis and impact measurement.

The company's 2025 activity was substantial. In September 2025, Clarity AI raised its Series B round led by Prosus, adding to its investor roster that includes former Apple Chief Design Officer Jony Ive, Balderton Capital, and Fifth Wall ClimateTech. In March 2025, the platform launched an AI-powered sustainability research tool for financial analysts, and in July 2025, it acquired ecolytiq, a Berlin-based startup that embeds sustainability insights into consumer banking applications, expanding Clarity AI's reach from institutional to retail finance. The acquisition strategy positions Clarity AI to capture the growing demand for sustainability transparency across the entire financial services value chain, from asset management to everyday banking.

5. Sweep — Enterprise Carbon and ESG Management

Headquarters: Paris, France
Founded: 2020
Total Funding: ~$100 million across 3 rounds
Key Investors: Coatue (lead, Series B), Tony Fadell's Future Shape, Balderton Capital
Website: sweep.net

Sweep is a cloud-based carbon and ESG management platform that enables large enterprises to measure greenhouse gas emissions across Scope 1, 2, and 3, set science-based reduction targets, model decarbonisation scenarios, and generate audit-ready reports for CSRD, CDP, GRI, and ISSB compliance. Founded by serial entrepreneur Rachel Delacour, the company raised $73 million in its Series B in April 2022 led by Coatue, with participation from Tony Fadell's Future Shape and existing investors Balderton Capital, New Wave, La Famiglia, and 2050.

Sweep's distinctive network approach engages employees, suppliers, and business partners directly in emissions data collection, enabling granular supply chain carbon measurement that competing platforms struggle to match. Enterprise clients including JCDecaux, Saint-Gobain, and Orange use the platform's intuitive "Sweep trees" for supply chain modelling and its integrated carbon marketplace for climate project investment. In January 2026, Sweep opened a new office in Denver, Colorado to support North American expansion as California's climate disclosure laws SB 253 and SB 261 take effect. The company is B Corp certified, publicly discloses its own climate journey, and holds the distinction of raising the highest disclosed Series A for any carbon management platform at the time of its $22 million round in December 2021.

6. Osapiens — ESG Compliance and Supply Chain Intelligence

Headquarters: Mannheim, Germany
Founded: 2018
Total Funding: $100 million+ (Series C)
Valuation: $1.1 billion+ (unicorn)
Employees: 2,400+ customers
Key Investors: Decarbonization Partners (BlackRock and Temasek joint venture)
Website: osapiens.com

Osapiens became one of five European startups to achieve unicorn status in January 2026, raising $100 million in a Series C round led by Decarbonization Partners — a joint venture between BlackRock and Temasek — at a valuation exceeding $1.1 billion. The platform provides comprehensive ESG reporting, data compliance, and supply chain risk management solutions specifically designed for the European regulatory environment.

With over 2,400 enterprise customers, Osapiens has built its business on addressing the compliance demands created by the EU's CSRD, the German Supply Chain Due Diligence Act, and forthcoming European sustainability legislation. The platform combines automated data collection across complex supply chains with AI-driven risk assessment and regulatory reporting capabilities. Its rapid ascent to unicorn status reflects the enormous enterprise demand for compliance infrastructure as CSRD Wave 2 reporting deadlines approach — originally set for financial year 2026 but recently delayed to 2027. The BlackRock-Temasek investment vehicle specifically targets companies enabling the transition to a net-zero economy, and Osapiens' selection validates its position at the intersection of regulatory compliance and sustainability transformation across European and global supply chains.

7. CO280 — Mobile Carbon Capture Technology

Headquarters: United States
Founded: 2022
Total Funding: $117 million
Key Investors: Lowercarbon Capital, Valor Equity Partners, Union Square Ventures, Y Combinator
Website: co280.com

CO280 represents the hardware side of the ESG startup ecosystem, developing breakthrough carbon capture technology designed to retrofit onto trains and trucks — two of the hardest-to-abate segments in global transportation. Backed by Y Combinator and having raised $117 million from leading climate investors including Lowercarbon Capital, Valor Equity Partners, and Union Square Ventures, the company claims its technology can capture 90 percent of CO2 emissions from diesel-powered vehicles during operation.

CO280's business model extends beyond capture technology: the company sells extracted CO2 to industrial buyers, creating a revenue stream that offsets deployment costs and makes carbon capture economically viable for fleet operators. This dual-revenue approach — technology licensing plus CO2 commodity sales — distinguishes CO280 from direct air capture competitors like Climeworks that rely primarily on carbon credit revenue. The company's focus on mobile point-source capture addresses a $500 billion+ market opportunity in freight transportation emissions, where electrification timelines extend decades into the future. As corporations face mounting pressure to decarbonise Scope 3 transportation emissions under ISSB Standards and CSRD requirements, CO280 provides an immediate, deployable solution that bridges the gap until zero-emission vehicles achieve widespread commercial viability.

8. Heart Aerospace — Electric Aviation Pioneer

Headquarters: Gothenburg, Sweden
Founded: 2018
Total Funding: $107 million+
Key Investors: Breakthrough Energy Ventures, United Airlines, Mesa Air Group, Saab
Website: heartaerospace.com

Heart Aerospace is developing the ES-30, a 30-seat hybrid-electric regional aircraft designed to revolutionise short-haul aviation with zero direct emissions on flights under 200 kilometres and significantly reduced emissions on longer regional routes using its hybrid-electric range extender. The company has secured orders and letters of intent from major airlines including United Airlines, Mesa Air Group, and Scandinavian carrier SAS, validating market demand for sustainable regional aviation.

Backed by Bill Gates' Breakthrough Energy Ventures and strategic investors including Swedish aerospace manufacturer Saab, Heart Aerospace addresses aviation's sustainability challenge — an industry responsible for approximately 2.5 percent of global CO2 emissions with limited near-term alternatives to jet fuel. The ES-30's hybrid-electric architecture represents a pragmatic approach: fully electric operation on short routes where battery energy density is sufficient, with a turbogenerator extending range for longer regional services. Heart Aerospace operates from facilities in Gothenburg with a growing engineering team focused on achieving European Union Aviation Safety Agency certification. The company's position in the ESG startup landscape reflects the broader trend of climate technology moving beyond software and carbon accounting into hardware solutions that directly decarbonise industrial operations.

9. Redwoods.ai — AI-Driven ESG Compliance Platform

Headquarters: United States
Founded: 2021
Total Funding: Funded (amount undisclosed)
Focus: AI-powered ESG compliance and climate monitoring
Website: redwoods.ai

Redwoods.ai utilises artificial intelligence to streamline ESG compliance and climate monitoring, providing businesses with agile reporting solutions that address the growing complexity of multi-framework sustainability disclosure. The platform automates data collection, validation, and reporting across CSRD, TCFD, CDP, GRI, and ISSB frameworks, reducing the manual effort typically required to navigate overlapping and evolving regulatory requirements.

The company's AI-driven approach reflects the broader transformation occurring across ESG technology, where machine learning is replacing manual data entry and spreadsheet-based compliance processes. "AI technologies are enhancing the way companies approach ESG metrics, providing insights that were previously unattainable," noted Michael Jacobson, AI Analyst at Tech For Good. Redwoods.ai's platform integrates real-time climate monitoring data with corporate emissions tracking, enabling companies to assess physical climate risks alongside their reporting obligations. As the regulatory landscape fragments — with the EU, US, and Asia-Pacific jurisdictions adopting different but overlapping disclosure standards — AI-powered platforms that can simultaneously manage compliance across multiple frameworks provide significant competitive advantage for multinational enterprises. The company is positioned to benefit from MarketsandMarkets projections showing accelerating enterprise adoption of AI in ESG reporting through 2026-2028.

10. Fortifai — ESG Compliance for Small and Medium Enterprises

Headquarters: Norway
Founded: 2023
Total Funding: €1.7 million
Key Investors: Sure Valley Ventures, Midwich Ignite, Focal
Website: fortifai.com

Fortifai addresses a critical gap in the ESG technology landscape: affordable, accessible compliance solutions designed specifically for small and medium enterprises. While platforms like EcoVadis, Watershed, and Persefoni serve large enterprises with dedicated sustainability teams and substantial budgets, Fortifai targets the 99 percent of European businesses classified as SMEs that face cascading sustainability disclosure requirements through their supply chain relationships with larger companies.

The platform automates CSRD disclosure preparation, materiality assessments, and sustainability data collection for organisations that lack the resources to hire dedicated ESG teams or engage expensive consultants. Backed by €1.7 million in funding led by Sure Valley Ventures with participation from Midwich Ignite and Focal, Fortifai represents the early-stage segment of the ESG startup ecosystem where enormous market opportunity meets unmet demand. As CSRD reporting cascades down through supply chains — large enterprises requiring their SME suppliers to report emissions data, governance practices, and social metrics — the addressable market for SME-focused ESG platforms is projected to expand dramatically. Fortifai's early-mover advantage in this segment, combined with its purpose-built design for organisations with limited sustainability expertise, positions it for significant growth as European regulatory requirements intensify through 2027 and beyond.

Technologies Driving the ESG Startup Ecosystem

The ESG sector is propelled by converging technological and regulatory forces that create sustained demand for innovation. Artificial intelligence is the most transformative element, with AI integration in ESG reporting fundamentally changing how sustainability data is collected, validated, and analysed. Machine learning algorithms now process satellite imagery for deforestation monitoring, natural language processing extracts ESG signals from corporate filings and news sources, and generative AI tools like PersefoniGPT enable non-technical users to query complex emissions datasets in plain language.

Blockchain and smart contract technology is emerging as a second critical infrastructure layer, with startups like Safeflows in Romania deploying ESG copilots that use smart contracts for supply chain transparency and CSRD alignment. Cloud computing and API-first architectures enable the interoperability that enterprises require, connecting ESG platforms with existing ERP, procurement, and financial systems. The rise of product-level carbon footprinting — exemplified by Watershed's Product Footprints AI — represents the next frontier, enabling companies to measure and communicate the environmental impact of individual products rather than aggregate corporate emissions.

ESG Startup Funding and Market Statistics – 2024–2030

Category	Metric	Value	Source
ESG Reporting Software	Market Size (2025)	$1.32 billion	Fortune Business Insights
ESG Reporting Software	Market Size (2034 Projected)	$7.36 billion	Fortune Business Insights
Global Impact Investing	Market Size (2030)	$253.95 billion	Grand View Research
Sustainable Finance	Market Size (2030)	$2,589.90 billion	Grand View Research
Climate Tech Early-Stage Investment	H1 2025 Total	$13.2 billion	SVB Future of Climate Tech
ESG Investing Startups	Total Tracked Globally	367 (137 funded)	Tracxn
Climate-Focused PE Funds	Capital Raised (2020-Q1 2025)	$62.6 billion	Industry Reports
Enterprise Risk Management	Market Size (2027)	$6.38 billion	MarketsandMarkets

Why This Matters

The ESG startup ecosystem in 2026 has evolved from a niche sustainability segment into a critical infrastructure layer for global business operations. Regulatory mandates across the EU, United States, and Asia-Pacific create non-discretionary demand for compliance platforms, while investor requirements — 79 percent of institutional investors now consider ESG factors material to investment decisions according to PwC — ensure sustained capital flows into the sector. "Businesses that embrace ESG innovation position themselves as leaders in a rapidly changing market landscape," stated Lara Thompson, Sustainability Consultant at GreenEdge Advisors.

For investors, the ESG startup landscape offers exposure to companies addressing regulatory-driven demand with strong retention characteristics — once enterprises integrate ESG compliance platforms into their reporting workflows, switching costs are substantial. For corporations, these startups provide the technology infrastructure necessary to meet disclosure obligations, manage supply chain sustainability risks, and communicate environmental performance to stakeholders. As we explored in our ESG investment opportunities analysis, the sector's growth trajectory remains robust despite broader venture capital market fluctuations.

What Comes Next (12–36 Months Outlook)

Over the next 12 to 36 months, consolidation is expected to accelerate across the ESG startup ecosystem. EcoVadis's potential Nasdaq IPO would represent a landmark moment for the sector, establishing public market comparables for ESG technology companies and potentially catalysing a wave of follow-on IPOs. Acquisition activity is already intensifying, as demonstrated by Watershed's VitalMetrics acquisition and Clarity AI's ecolytiq purchase, with larger enterprise software companies likely to acquire specialised ESG platforms to expand their compliance capabilities.

Product-level carbon footprinting, real-time supply chain ESG monitoring, and AI-automated regulatory reporting across multiple jurisdictions will be the primary innovation vectors. The median early-stage climate investment has climbed from $766,000 to $2.1 million, reflecting growing investor confidence in ESG technology business models. However, projections carry uncertainty dependent on the pace of regulatory implementation, particularly the delayed CSRD Wave 2 timeline, and the evolving political landscape around ESG mandates in the United States. Stakeholders should prepare for potential challenges associated with platform interoperability and data standardisation as the market matures from fragmented point solutions towards integrated sustainability management ecosystems.

References

1. Fortune Business Insights – ESG Reporting Software Market
2. Grand View Research – Global Impact Investing Market
3. Grand View Research – Sustainable Finance Market
4. EcoVadis
5. Watershed
6. Persefoni
7. Clarity AI
8. Sweep
9. Osapiens
10. CO280
11. Heart Aerospace
12. Tracxn – ESG Investing Startups Database
13. SVB – Future of Climate Tech 2025
14. Getlatka – EcoVadis Revenue Data
15. PwC – ESG Investor Survey