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ESG Software Market Trends

Report ID: GMI11847
Published Date: Oct 2024
Report Format: PDF

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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.

Authors: Preeti Wadhwani, Satyam Jaiswal

Frequently Asked Questions (FAQ) :

The global ESG software industry was valued at USD 838.6 million in 2023 and is estimated to grow at a 14.3% CAGR from 2024 to 2032, driven by an increasing focus on sustainability, regulatory compliance, and stakeholder pressure.

The environmental management software segment was valued at over USD 300 million in 2023, fueled by the growing emphasis on climate change mitigation, carbon footprint reduction, and environmental compliance.

North America dominated the global ESG software industry with a major share of over 35% in 2023, driven by increasing corporate sustainability commitments and a surge in sustainable investing.

Key players in the ESG software industry include Cority, Diligent, Goby, Intelex, Measurabl, Perillon Software, SAP SE, Sphera, Sustainalytics, and Workiva.