ESG Reporting Software Market

ESG Reporting Software Market Outlook 2031

The global ESG reporting software market size was valued at USD 600 Million in 2022 and is likely to reach USD 2,229 Million by 2031, expanding at a CAGR of 15.7% during the forecast period, 2023–2031. The market growth is attributed to the growth in sustainable ESG investments by corporates and an increase in credible disclosures by corporates.

ESG (Environmental, Social, and Governance) reporting software are end-to-end solutions that facilitate the provision of ESG reports for organizations. ESG reporting software aid businesses, NGOs, and governments in assessing the environmental risks and impacts through the auto-collection of data. Organizations are keen on identifying their ESG performances to verify if the sustainability and social responsibility principles are effectively met.

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ESG software provides in-depth solutions comprising several modules. The applications of the modules in risk management, regulatory compliance, EHS (environment, health, and safety), and sustainability management are bolstering the market. ESG software measure and track the social performance of an organization through passive environmental monitoring.

Improving efficiency along with bettering the corporate social responsibility standards are major applications of ESG reporting software. As per the survey findings by NAVEX Global, a compliance software company, 88 percent of public companies worldwide have ESG initiatives in place.

The market report finds that the COVID-19 pandemic negatively affected the ESG reporting software market, due to the abrupt shutting down of businesses. Government-imposed lockdowns around the world led to a shift of focus from environmental and climate changes to the efficient running of businesses during the pandemic.

ESG Reporting Software Market Dynamics

The global ESG reporting software market report has up-to-date insights that help formulate a strategic roadmap about the estimated market scenario and performance from 2023 to 2031.

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What Drives the ESG Reporting Software Market?

The growing use of ESG software for investment decision-making is expected to propel market growth in the forecast period. Growing adoption of investor ESG software by investors across the globe as it provides key perform indicators for complex investment decisions.

As per the findings by Diligent, the use of ESG software reduced auditing costs by 50%, emission data collection time reduced by 60-80%, and emissions report filing time reduced by 20-40%.

What are the Restraints of the ESG Reporting Software Market?

Replacing the existing infrastructure for storing data requires heavy capital funding which may hamper market development. Difficulties in the integration of ERP systems with ESG software are major challenges to the rapid growth of the market.

What are the Opportunities in the ESG Reporting Software Market?

The study of the implications of climate change risks on financial services systems and institutions is a major market investment opportunity. Assessments of measures for financial stress testing to tackle climate change is posing a significant opportunity for market expansion.

Scope of ESG Reporting Software Market Report                        

The market research report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

ESG Reporting Software Market Segment Insights

Component Segment Analysis

Based on the component, the ESG reporting software market is bifurcated into services and solutions. The services segment is anticipated to grow at a rapid pace during the projected period, due to several functions provided by service providers that are beneficial to businesses.

ESG-as-a-Service API library and cloud hosting of accumulated data are widely used functions that are expected to further boost the segment. Professional service providers are expected to dominate the segment growth with detailed ESG reports covering sustainalytics provided to organizations.

Deployment Mode Segment Analysis

On the basis of deployment mode, the market is subdivided into cloud-based and on-premise. The cloud-based segment is anticipated to grow at a rapid pace during the forecast period, due to several cloud services the ESG reporting software provides. Data collection and management, metrics and KPI tracking, report creation, report audit, and other regulatory & compliance reporting are some of the services the software provides.

The minimal use of IT infrastructure through the efficient use of cloud-based information management infrastructure is a major advantage expected to drive the segment.

Organization Size Segment Analysis

In terms of organization size, the ESG reporting software market is bifurcated into small & medium enterprises and large enterprises. The small & medium enterprises (SMEs) segment is expected to emerge as the largest market contributor during the forecasted period, owing to the growing applications of the Global Reporting Initiative (GRI) functions provided by ESG reporting software.

Small & Medium Enterprises (SMEs) can measure several ESG issues such as the regeneration of natural resources, the volume of carbon emissions, and human rights compliance with complete transparency which is expected to propel the segment.

Industry Segment Analysis

Based on industry, the global market is divided into retail & consumer goods, BFSI, IT & telecommunications, healthcare, manufacturing, and others. The BFSI segment is expected to lead the market, due to the high level of assessments of lending, investments, and operational policies.

ESG scores are used by financial institutions to assess if an investment is sustainable for its investors, shareholders, and the financial environment. The performances of companies are measured through ESG criteria.

Assessments of performance criteria by financial institutions provide company ethics and sustainability of investment and loan portfolios. The provision of ESG criteria by ESG reporting software is expected to propel the segment growth in the forecast period.

Regional Analysis

In terms of region, the global ESG reporting software market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market during the projection period, due to rapid industrialization.

The growing number of organizations incorporating software into business systems has increased in the region. Enhancement of sustainability performances of businesses is expected to boost the ESG reporting software market in the region.

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Segments

The global ESG reporting software market has been segmented on the basis of

Component

• Services
  • Managed
  • Professional
• Solutions

Deployment Mode

• Cloud-based
• On-premise

Organization Size

• Small & Medium Enterprises
• Large Enterprises

Industry

• Retail & Consumer Goods
• BFSI
• IT & Telecommunications
• Healthcare
• Manufacturing
• Others

Region

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

Key Players

• Workiva Inc.
• Nasdaq, Inc.
• Emex Software Ltd
• Vervantis Inc.
• Sphera Solutions, Inc.
• Locus Technologies
• Novisto Inc.
• Dynamo Software, Inc.
• Keramida
• Isometrix
• Wolters Kluwer
• Diligent
• Enhelix Inc

Competitive Landscape

Key players competing in the global ESG reporting software market are Workiva Inc., Nasdaq, Inc., Emex Software Ltd., Vervantis Inc., Sphera Solutions, Inc., Locus Technologies, Novisto Inc., Dynamo Software, Inc., Keramida, Isometrix, Wolters Kluwer, Diligent, and Enhelix Inc.

These companies adopted development strategies including mergers, acquisitions, partnerships, collaboration, product launches, and production expansion to expand their consumer base worldwide.

• In June 2022, Nasdaq acquired Metrio, an ESG data collection provider for analytics software and reporting. Software as a service (SaaS) platforms of Metrio were integrated into its ESG solutions portfolio through the acquisition which has strengthened IR & ESG Services.

• In January 2022, Diligent announced the acquisition of a SaaS provider of intelligent analytics and expert insights, Insightia, that integrated public company data with Diligent’s leading governance, analytics, and ESG solutions.