The global ESG Reporting Software Market to grow from USD 0.7 billion in 2022 to USD 1.5 billion by 2027, at a Compound Annual Growth Rate (CAGR) of 15.9% during the forecast period, according to a new report by MarketsandMarkets™. The major factors driving the growth of the ESG Reporting Software Market include surge in adoption of cloud-based solutions and services across verticals, higher investment by government as well in this market across regions, spike in corporate data volume, and credible corporate disclosures.
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Large Enterprises segment forecasted to have multiplied growth in market size during the forecast period
Organizations with more than 1,000 employees are categorized as large enterprises. With large enterprises, under ESG, “Environmental” refers to how a company is exposed to and manages risks and opportunities to solve problems associated with climate, natural resource scarcity, pollution, waste, and other environmental factors, as well as its own environmental impact. The term “social” refers to the examination of a companys values and business relationships through issues such as supply chain, product quality and safety, employee health and safety, diversity and inclusion policies, worker welfare, and slave labour concerns. “Governance” considers a companys corporate structure, board diversity, executive compensation, corporate resilience and event responsiveness, and policies and practices on lobbying, political contributions, bribery, and corruption. The world’s largest shareholder, the American multinational investment management corporation Blackrock, has informed the market that it believes sustainability risk, particularly climate risk, is an investment risk. As a result, where corporate disclosures are insufficient to make a thorough assessment, or a company has not provided a credible plan to transition its business model to a low-carbon economy, including short, medium, and long-term targets, sustainability is a key component of the investment approach.
See related article: Bridge House Advisors and Novata Partner to Accelerate ESG Adoption in Private Markets
Government and public sector to record significant growth during the forecast period
Governments can help with the management and transition costs of ESG risks and exert significant influence over outcomes through their policy and regulatory functions, but initial measurement and attribution of ESG risks appears to be best captured by assigning them to each sector. SASB, TCFD, or GRI uniform ESG standards and regulatory frameworks for the public sector, as for the private sector. Because the objectives of the public sector are linked to public interest and benefit, public bodies have strong incentives to be more transparent about their impact. Climate change has sparked unprecedented public interest, and sustainability reports enable governments to demonstrate their progress in reducing emissions. The public sector is the largest economic sector in most countries, which means it has a significant impact on the environment. It serves two functions: it provides essential services such as the armed forces, healthcare, public transportation, and waste collection, all of which contribute to climate change.
Asia Pacific is projected to record the highest market size during the forecast period
Asia Pacific is one of the fast-growing markets for ESG Reporting software, and its growth is driven by the presence of many SMEs in different countries. Major factors for technological advancements in the region are the rising levels of urbanization, technological innovation, and government support for the digital economy. The region is expected to experience fast growth during the forecast period. Additionally, the Asia Pacific region is expected to experience extensive growth opportunities during the forecast period majorly due to the presence of manufacturing units in this region. South Korea, Japan, Singapore, India, Australia, and China emerged as undisputed leaders in Asia Pacific with regards to cloud adoption. Australia with its trade-friendly policy environment is another potential market in Asia Pacific for ESG Reporting software. The increasing adoption of ESG Reporting software solutions in this region is due to the improving economic outlook of Asia which seems to be positive for enterprises. Moreover, ESG Reporting software enables enterprises to improve the operational issues, increase customer satisfaction, and assign jobs instantly. Furthermore, the increasing trend toward SaaS would give rise to the growth of ESG Reporting Software Market in this region.
Market Players
Some prominent players across all service types profiled in the ESG Reporting Software Market study include Wolters Kluwer (Netherlands), Nasdaq (US), PwC (UK), Workiva (US), Refinitiv (UK), Diligent (US), Sphera (US), Cority (Canada), Intelex (Canada), Greenstone (UK), Novisto (Canada), Emex (Ireland), Enhelix (US), Anthesis (UK), Diginex (Hong Kong), Bain & Co. (US), Keramida (US), Isometrix (US), Accuvio (acquired by Diligent) (US).