ESG Software Market - By Offering, By Deployment Model, By Organization Size, By Application, By End Use, Growth Forecast 2024 – 2032

ESG Software Market Size

The global ESG software market was valued at USD 838.6 million in 2023 and is estimated to register a CAGR of 14.3% between 2024 and 2032. The increasing focus on sustainability, regulatory compliance, and stakeholder pressure are key factors driving the demand for ESG software solutions. Companies across various industries are increasingly investing in ESG software to manage their environmental impact, social responsibilities, and governance practices more effectively.
 

The market is witnessing significant growth due to the rising awareness of climate change, social issues, and corporate governance among investors, consumers, and regulators. For instance, in September 2024, SAP and Thomson Reuters announced a product integration, combining Thomson Reuters' OneSource Statutory Reporting with SAP's Sustainability Control Tower to offer enterprises a unified ESG reporting solution. This integration highlights the growing demand for comprehensive ESG reporting tools that can handle complex regulatory requirements and stakeholder expectations.
 

Additionally, the increasing focus on green technology and sustainability is significantly driving the ESG software market. As organizations strive to minimize their environmental impact and align with global sustainability goals, the demand for robust ESG solutions is surging. The green technology and sustainability market is projected to grow from USD 14.3 billion in 2022 to over USD 80 billion by 2032, with an annual growth rate of more than 19%. This growth highlights a rising recognition of the need for sustainable practices across industries. Companies are increasingly adopting ESG software to not only comply with regulatory requirements but also to enhance their sustainability profiles.
 

ESG Software Market Trends

The incorporation of Artificial Intelligence (AI) and Machine Learning (ML) technologies is transforming the ESG software industry. Providers are leveraging these advancements to offer more sophisticated data analysis, predictive modeling, and automated reporting capabilities. This trend is evident in the strategic moves of major players in the market. For instance, in August 2024, AMCS, an Irish company, announced its AI-enabled platform for resource-intensive industries, including waste management and utilities, aimed at boosting sustainability and profitability while meeting regulatory requirements.
 

Moreover, there is an increasing focus on cloud-based ESG software solutions. The shift towards cloud deployment is driven by the need for scalability, real-time data access, and improved collaboration across global operations. Companies are increasingly recognizing the importance of integrating cloud-based solutions to streamline ESG reporting, risk management, and compliance. This trend is driving strategic investments and acquisitions in the ESG software space. For instance, in May 2024, software investor Hg acquired AuditBoard, a cloud-based audit, risk, and ESG company, highlighting the growing importance of cloud solutions in the market.
 

An emerging opportunity in the ESG software market lies in the integration of blockchain technology for enhanced data transparency and traceability. As stakeholders demand more accountability in ESG reporting, blockchain-enabled solutions could provide immutable records of ESG data, ensuring greater trust and reliability in reported metrics.
 

The ESG software market faces challenges such as the complexity of standardizing ESG data across diverse industries and the high costs associated with implementing and maintaining sophisticated ESG management systems. Many organizations struggle with the variability in ESG reporting standards and the difficulty in quantifying certain ESG metrics, particularly in the social and governance domains, thus hindering market growth.
 

ESG Software Market Analysis

Based on offering, the market is divided into environmental management software, social management software, governance management software, and others. In 2023, the environmental management software segment was valued at over USD 300 million. The increasing focus on climate change mitigation, carbon footprint reduction, and environmental compliance is driving growth in this segment. These advanced systems leverage cutting-edge technologies such as AI and ML to analyze environmental data, track emissions, and provide actionable insights for sustainability strategies. The ability of these software solutions to help companies meet stringent environmental regulations and achieve their sustainability goals makes them essential in corporate sustainability initiatives.
 

Based on deployment model, the market is categorized into cloud and on-premises. The cloud segment is anticipated to register a CAGR of over 12% from 2024 to 2032. The rapid adoption of cloud-based ESG software solutions is driven by their scalability, cost-effectiveness, and ability to provide real-time data access across global operations. Cloud deployment allows for easier integration with existing enterprise systems and enables more efficient collaboration among different departments and stakeholders. The trend towards remote work, accelerated by the COVID-19 pandemic, has further boosted the demand for cloud-based ESG solutions that can be accessed from anywhere.
 

North America dominated the global ESG software market with a major share of over 35% in 2023. The U.S. market is experiencing robust growth, driven by increasing corporate sustainability commitments and a surge in sustainable investing. As environmental, social, and governance issues gain greater prominence, major corporations across industries are actively integrating ESG factors into their core business strategies. This includes adopting sustainable practices, reducing carbon footprints, and ensuring social responsibility within their operations and supply chains.
 

In Europe, the ESG software market is significantly influenced by the European Union's Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD). These regulations are compelling companies to adopt comprehensive ESG reporting practices, thereby driving the demand for advanced ESG software solutions. The region's strong emphasis on sustainability and circular economy principles is fostering the development of innovative ESG software that caters to the evolving needs of businesses and investors.
 

Asia Pacific is rapidly emerging as a significant player in the ESG software market, driven by increasing awareness of sustainability issues and growing regulatory pressure. Countries such as Japan, Singapore, and Hong Kong are implementing ESG disclosure requirements, spurring the adoption of ESG software solutions. The rise of sustainable investing in the region, coupled with the growing focus on supply chain sustainability, is further fueling the demand for ESG software. As multinational corporations extend their ESG practices to their Asian operations, the region is witnessing a surge in demand for localized and culturally adapted ESG software solutions.
 

ESG Software Market Share

SAP SE, Workiva, and Sphera hold a significant market share of over 10% in ESG software market. These major players are focusing on product innovation and strategic partnerships to enhance their market position. They are investing heavily in research and development to introduce more comprehensive and integrated ESG software solutions that can address the complex needs of various industries.
 

Additionally, key players such as SAP SE and Workiva are prioritizing the development of AI-driven ESG analytics and predictive modelling capabilities. They are also focusing on enhancing the user experience and customization options to cater to the diverse needs of different industries and company sizes. The emphasis on cloud-based solutions and mobile accessibility is another key strategy adopted by market leaders to maintain their competitive edge.
 

ESG Software Market Companies

Major players operating in the ESG software industry include:

• Cority
• Diligent
• Goby
• Intelex
• Measurabl
• Perillon Software
• SAP SE
• Sphera
• Sustainalytics
• Workiva
   

ESG Software Industry News

• In September 2024, KPMG announced a partnership with Sweep aimed at accelerating corporate climate and ESG strategies. This collaboration combines KPMG's multi-disciplinary climate and ESG expertise with Sweep's innovative sustainability data management platform, offering companies more comprehensive tools to integrate sustainable performance into their business models.
   
• In April 2024, Ernst & Young (EY) acquired Denkstatt, a sustainability and ESG consulting firm serving customers in Austria and across Europe. This acquisition highlights the growing importance of ESG services and may lead to enhanced ESG software offerings from EY to complement their consulting services.
   

The ESG software market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) from 2021 to 2032, for the following segments:

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Market, By Offering

• Environmental management software
• Social management software
• Governance management software
• Others

Market, By Deployment Model

• Cloud
• On-premises

Market, By Organization Size

• SME
• Large enterprises

Market, By Application

• Risk management
• Compliance management
• Sustainability reporting
• Carbon & energy management
• Others

Market, By End Use

• BFSI
• Healthcare
• Retail
• Energy & utilities
• Manufacturing
• Government
• IT & telecom
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina 
• MEA
  • UAE
  • South Africa
  • Saudi Arabia