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The ESG reporting software market size is estimated to grow by USD 1.18 billion at a CAGR of 19.63% between 2023 and 2028. The market is experiencing steady growth due to the increasing volumes of corporate data and the emergence of analytics in ESG reporting. Companies are recognizing the importance of transparency and accountability in environmental, social, and governance (ESG) practices, which has led to a demand for advanced reporting solutions. Corporate management is increasingly focusing on sustainability management, driving the need for reporting tools. However, the high initial capital investments required for implementing these software solutions can be a significant challenge for smaller organizations. Despite this, the market is expected to continue its growth trajectory as more businesses seek to enhance their ESG reporting capabilities and improve their sustainability profiles.
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The ESG reporting software market is witnessing significant growth due to regulatory requirements and increasing investor demand for sustainability information. Large enterprises, public sector organizations, non-profits, and manufacturing industries are adopting ESG reporting software to manage risk, improve corporate governance, and enhance sustainability performance. These solutions offer advanced reporting capabilities, data analytics, and scenario modeling using generative AI, advanced algorithms, and deep learning techniques. Climate change, labor practices, and social inequality are key ESG issues addressed by these software. Some solutions utilize satellite imagery for deforestation monitoring, natural language processing for stakeholder engagement, and predictive analytics for identifying potential risks. The market is shifting towards cloud-based, SaaS-based AI solutions to reduce costs and improve accessibility. The Nasdaq Sustainable Lens and other similar platforms are driving transparency and standardization in ESG reporting. Further, the market is experiencing significant growth, with cloud-based solutions becoming increasingly popular among financial institutions, nonprofits, and emerging markets. These platforms offer advanced analytics and data integration for sustainability reporting, environmental reporting, climate risk assessment, and data privacy. Artificial intelligence and machine learning are used for data analysis, helping organizations make informed investment decisions based on sustainability goals, ethical practices, and regulatory risks. Additionally, these tools facilitate the reporting of key performance indicators related to environmental degradation, social issues, and governance practices. ESG reporting is essential for brand reputation management and mitigating regulatory risks, with emerging trends including the integration of green bonds and ethical investment strategies. Overall, ESG reporting software enables organizations to make more informed decisions, reduce environmental impact, and enhance their social responsibility.
The steady growth in corporate data volumes is driving market growth. Digitization offers many advantages for companies such as efficient resource planning, data-driven decision-making, innovations in products and services, and cost reduction. Moreover, there is a data boom in various industries due to the increased usage of mobile, social, and other online communication methods increasing data regarding customers, operations, suppliers, and other stakeholders. Monetization of this data will allow companies to make more informed decisions and allocate resources more efficiently.
Furthermore, this increased data necessitates storage at a low cost which often results in the adoption of a cost-effective cloud-based information management infrastructure. Minimal IT infrastructure support, rapid and predictable implementation, automatic and seamless upgrades, and the ease of leveraging cloud-based data are some of the reasons it is preferred. Hence the need to store massive volumes of data on servers at low costs and reduce corporate risks will drive the growth of the market during the forecast period.
The emergence of analytics in ESG reporting software is a key trend in the market. Companies are increasingly adopting new techniques and technologies to reduce energy costs and comply with regulations regarding energy efficiency. Governments globally are increasing their targets for energy standards and emission limits. The usage of big data and analytics technologies is helping energy sector organizations reduce their total operating expenditure by using predictive modeling techniques that are based on real-time data. Due to such benefits, analytics spending has increased in numerous industries like banking, financial and insurance, healthcare, and E&U.
Furthermore, in the solar industry, energy analytics using machine learning and predictive analytics technologies is especially gaining traction. Effective and smart energy management systems (EMS) integrate predictive analytics with IoT. Automation has helped in increasing the operational efficiency of smart grid initiatives. Real-time analytics also enhances functions such as building-energy management, energy production, weather forecasting, and predictive maintenance of EMS. Additionally, the optimal warranty period and cost of the equipment can be determined by predictive analytics. Hence such factors will boost the growth of the market during the forecast period.
High initial capital investments are challenging market growth. The integration of EHS infrastructure into existing software will make companies incur significant costs. Costs associated, such as the large initial cost, can make adoption for SMEs very challenging, resulting in limited scope for adoption. This poses a serious challenge to the integration of environmental, sustainability, and governance (ESG) reporting software with the ERP systems of enterprises.
However, despite the immense benefits of implementing EHS infrastructure at almost every operational stage, there exists another challenge for effective deployment besides high costs. There is a possibility that the existing IT infrastructure of a company may not support the ESG reporting software being deployed. Hence such challenges might affect the adoption of ESG reporting software and services and thereby hinder market growth during the forecast period.
The market share growth by the on-premises segment will be significant during the forecast period. On-premises-based ESG reporting software is preferred as they reduce energy costs by 80%-85% while also offering high system security and data and system control. With on-premises software, organizations have complete control over maintenance and updates. It is usually provided as a standard and enterprise plan wherein only one user can access the plan. Increasing investment in the energy and utilities (E&U) industry and the presence of numerous vendors such as Intelex Technologies Inc are also boosting market growth. In fact, global energy investments rose by 10% in 2021 compared with 2020, as per International Energy Agency (IEA) statistics.
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The on-premises segment showed a gradual increase in the market share of USD 288.20 million in 2018. Increasingly stringent government regulations and initiatives to improve ESG are responsible for boosting the market. The European Union mandated fund managers who market ESG reporting software to demonstrate how they satisfy particular standards in March 2021. The EUs Green Deal initiatives target stimulation of investment by forcing ESG products to disclose the impact of their products on climate change. Additionally, in APAC, China is targeting to become carbon-neutral by 2060 and according to its 14th Five-Year Plan (2021-2025), it aims to reduce its energy intensity by 13.5% and carbon emissions by 18%. Hence such factors will increase the growth of this segment during the forecast period.
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North America is estimated to contribute 41% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. In North America, the US is the largest market due to the large-scale implementation of environmental, sustainability, and governance (ESG) reporting software to minimize environmental hazards. In the US, the presence of regulatory agencies such as the Occupational Safety and Health Administration (OSHA), which promotes workplace safety standards, have compelled numerous industries, like E&U, chemicals, and materials, to adopt ESG reporting software. This helped eliminate occupational hazards.
Moreover, there are several technological advancements to guide compliance with regulations and acts such as the Clean Air Act in the US. These have resulted in reduced industrial emissions and promoted the adoption of sustainability management and environmental, sustainability, and governance (ESG) reporting software. Moreover, the Environmental Protection Agency (EPA) in the US aims to improve air quality by setting targets for air pollutant emission levels. Additionally, in Canada, the Air Quality Management System (AQMS) targets emission reduction as per the Canadian Ambient Air Quality Standards (CAAQS). Hence such factors will boost regional market growth during the forecast period.
The market report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Benchmark Digital Partners LLC - The company offers ESG reporting software such as ESG Compass, which helps companies measure, manage, and report on their ESG performance.
Brightest Inc. - The company offers ESG reporting software such as Brightest ESG, which helps companies measure and report on their ESG performance using a cloud-based platform.
ESG Enterprise - The company offers ESG reporting software such as ESG Enterprise, which helps companies measure, manage, and report on their ESG performance.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The ESG reporting software market is witnessing significant growth due to increasing investor demand for sustainability information. Large enterprises, public sector organizations, non-profits, and the manufacturing industry are adopting these solutions to manage their sustainability initiatives, corporate governance, and risk management. The software offers reporting capabilities for sustainability performance, climate change, labor practices, and corporate social responsibility. Advanced digital tools, such as oil and gas, cloud-based AI, generative AI, and satellite imagery, are being integrated into ESG reporting software for data collection, analysis, and scenario modeling. These features enable predictive analytics, natural language processing, and deforestation monitoring. ESG reporting software also offers benchmarking, scenario modeling, and storytelling functionalities for strategic decision-making and stakeholder engagement. SaaS-based AI and NASDAQ Sustainable Lens are popular choices for sustainability disclosures and GHG emissions management. Corporate sustainability is no longer just a CSR initiative but a strategic priority. ESG reporting software enables organizations to collect, analyze, and report on their sustainability data, helping them make informed decisions and enhance their sustainability performance.
Market Scope |
|
Report Coverage |
Details |
Page number |
158 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 19.63% |
Market Growth 2024-2028 |
USD 1.18 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
16.7 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 41% |
Key countries |
US, Germany, Canada, China, and Japan |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Benchmark Digital Partners LLC, Brightest Inc., Diginex, Diligent Corp., DNV Group AS, ESG Enterprise, GS Topco GP LLC, Intelex Technologies ULC, International Business Machines Corp., Metrix Software Solutions Pty Ltd., Morningstar Inc., Nasdaq Inc., Newgen Software Technologies Ltd., PricewaterhouseCoopers LLP, Salesforce Inc., Sustain.Life Inc., UL Solutions Inc., Updapt CSR Private Ltd., Wolters Kluwer NV, and Workiva Inc. |
Market dynamics |
Parent market analysis, market research and growth, market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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