Investor ESG Software Market Size, Share, Trends Report 2031

Report Description

The global investor ESG software market size was valued at nearly USD 620.1 Million in 2022 and is anticipated to reach USD 2094.2 Million by 2031, expanding at a CAGR of 14.9% during the forecast period, 2023–2031. The growth of the market is attributed to growing government initiatives worldwide for promoting ESG investments.

Investor ESG software provides comparable Key Performance Indicators (KPIs) that present significant pointers in complex investment decision-making. Ecological footprints complied by businesses are analyzed by investor ESG software. Green House Gas Protocol (GHGP), LGBTQ rights, gender equality, carbon footprints, and supply chain ethics adhered to by corporate are evaluated by Investor ESG software. The findings of these evaluations provide investors with accurate matrices that back their investment decisions.

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Leading service providers of ESG reporting software make use of artificial intelligence for identifying high-risk areas for investors. Specific actions are suggested for precise investment decisions. ESG software is automated, which reduces the risk of human errors in accurate analytical findings. ESG software findings provide comprehensive solutions composed of several modules used for EHS (Environment, Health, and Safety), risk management, sustainability consulting and management, and regulatory compliance.

The market report finds that the COVID-19 pandemic adversely affected the investor ESG software market growth with the abrupt closing of businesses after the government-imposed lockdowns around the world. Halting of business processes affected the overall turnover of businesses which resulted in the shift of focus from environmental concerns to sustaining the businesses in an unpredictable calamity such as COVID-19.

ESG software help investors in the measurement and tracking of environmental, social and governance of organizations and industry domains. According to surveys conducted by Benchmark ESG, about 85% investors, that included 91% institutional investors, consider investment-grade ESG data as concrete information for investment decision making.

Investor ESG Software Market Dynamics

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Major Drivers

Digitization coupled with leveraging of cloud-based data across organizations are expected to be major drivers for market growth in the forecast period. Effective storage and analysis of data through the application of investor ESG software for backing investment decision making is expected to boost the investor ESG software market in the upcoming years.

Existing Restraints

High investments for replacing existing EHS infrastructure may restrain the market growth in the coming years. System integration with ERM management systems poses challenges for widespread expansion of investor ESG software market across large and small enterprises.

Emerging Opportunities

Transitions and transformations in asset management industry resources from product business types to service business types are providing growth opportunities for market expansion. Growing adoption of ESG software solutions by investors for decision making is increasing market development opportunities for the investor ESG software market.

Scope of Investor ESG Software Market Report

The report on the global investor ESG software market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Investor ESG Software Market Segment Insights

Component Segment Analysis

Based on the component segment, the investor ESG software market is divided into software and services. The software as a product segment is expected to expand at a significant growth rate during the projection period, due to the access and availability of data from any device and browser than locally run software installed on networks and PCs.

Software as products is licensed through subscription models of defined intervals that are delivered and maintained by the software providers and client hosting liabilities are eliminated which is expected to drive the segment growth in the forecast period.

The services segment is further classified into managed and professional. Investor ESG software services segment is anticipated to hold a key share of the market, owing to the software distribution model used for delivering end-to-end applications over the internet. Allowing data access from any device connected to the internet is a major advantage of services which is expected to boost segment growth in the forecast period.

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Organization Size Segment Analysis

On the basis of the organization size segment, the market is subdivided into large enterprises and small & medium enterprises (SMEs). The large enterprise segment is projected to hold a considerable CAGR during the forecast timeframe owing to the engagement in cutting-edge technologies such as investor ESG software for overseeing organizational processes, the gathering of process data, and auto assessments and publishing results.

Concrete data is made available by ESG software to investors related to the volume of carbon emissions, human rights compliances, and natural resource usage of sectors and organizations in specific.

The small & medium enterprises (SMEs) segment is anticipated to register a robust growth rate during the forecast period owing to the application of the Global Reporting Initiative (GRI) inputs provided by ESG reporting software for backing investor decision-making. Data-backed decision-making is a major advantage for comparative analysis of sectors useful for investors which are likely to boost the segment growth in the forecast period.

Deployment Mode Segment Analysis

Based on the deployment mode segment, the market is divided into on-premise and cloud-based modes of deployment. The cloud-based segment is anticipated to rise significantly in the market in the upcoming years of the forecast period with significant developments in the structuring of organizational finances around the globe.

Financial institutions make use of private cloud services to gain profits from commercial and financial transactions which is expected to propel the cloud-based software segment.

The on-premise segment is projected to expand at a significant growth rate during the projection period, owing to enhanced system security in comparison to public cloud systems. Internal network accessibility without internet connectivity is a major advantage of on-premise data validation and storage which is likely to boost the market growth in the years to come.

Industry Segment Analysis

On the basis of industry segment, the investor ESG software market is divided into healthcare, manufacturing, retail & consumer goods, BFSI, IT & telecommunications, and others. The BFSI segment is expected to lead the investor ESG software owing to the increased focus by investors in assessing the lending and operational policies of organizations.

Credit and viability scores fetched from ESG software data are utilized by investors for effective decision making for investments which is likely to boost the segment growth in upcoming years.

The manufacturing segment is anticipated to account for a major market share in the coming years owing to varied investor clientele across industries who rely on investor ESG software for investment decision making and financial planning. Effective business tactics with marketing skills are expected to attract investments in the manufacturing sector which is likely to boost the segment growth in the forecast period.

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Regional Analysis

In terms of region, the global investor ESG 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 owing to a well-established financial sector and BFSI establishments the growth of process industries such as power generation and petroleum refining.

The market growth of North America is attributed to the increasingly strict government policies for implementation of green initiatives for corporates which has boosted the market growth in the region.

Asia Pacific is projected to grow at a rapid pace in the market of investor ESG software, owing to rapid urbanization, increasing disposable incomes of consumers and a well-established and healthy BFSI industry. Controlling greenhouse gas emissions, water wastage, and waste production management is likely to boost market growth in the region.

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