ESG Reporting Software Market Size, Share, and Growth Forecast for 2024 - 2031

ESG Reporting Software Market Size and Share Analysis

The global ESG reporting software market is estimated to reach a size of US$ 978.6 Mn in 2024. It is predicted to rise at a CAGR of 15.4% through the assessment period to attain a value of US$ 2,667.1 Mn by 2031.

The ESG industry is growing due to increasing regulatory requirements, investor scrutiny, and a rising corporate focus on sustainability and ethical governance. Companies are required to disclose their ESG metrics and demonstrate transparency. It is further leading to the adoption of specialized software for data collection, reporting, and analysis.

Demand for comprehensive ESG solutions is driven by climate change, social justice issues, and the need for robust corporate governance frameworks. For instance, the temperature of the Earth's surface peaked in 2023 and is predicted to rise again in 2024. Around the world, hurricanes, wildfires, and floods are getting worse due to rising temperatures.

An estimated 14.5 million people may die owing to climate change by 2050, primarily from heat waves, harsh weather, and air pollution. Furthermore, as the range of disease-carrying insects increases due to global warming, nearly 500 million people can be at danger of contracting vector-borne illnesses.

Governments and regulatory bodies worldwide are implementing strict regulations, such as the Corporate Sustainability Reporting Directive (CSRD). These norms ensure investors can access crucial information to evaluate companies' impact on people and the environment.

Key Highlights of the Market

• Governments and regulatory bodies are increasing the demand for detailed and frequent sustainability reporting, prompting organizations to adopt ESG reporting software.
• Increasing demand for transparency and accountability from investors and stakeholders is pushing companies to provide comprehensive ESG data.
• Companies are prioritizing sustainability in their strategies, making ESG reporting software crucial for tracking and reporting their sustainability performance.
• Big data analytics and AI are transforming ESG reporting by improving accuracy and efficiency as well as empowering businesses to efficiently manage and report on their ESG operations.
• In 2024, cloud-based deployment is estimated to attain a share of 54.3% due to superior scalability.
• Based on organization size, the large enterprise segment is projected to account for a market share of 62.4% in 2024 backed by rising need for risk assessment.
• Owing to surging research and development investments, North America is estimated to attain a market share of 45% in 2024. 
• Europe is anticipated to hold a market share of 32.8% in 2024 due to strict sustainability laws.

Market Attributes	Key Insights
ESG Reporting Software Market Size (2024E)	US$ 978.6 Mn
Projected Market Value (2031F)	US$ 2,667.1 Mn
Global Market Growth Rate (CAGR 2024 to 2031)	15.4%
Historical Market Growth Rate (CAGR 2019 to 2023)	9.8%

Growing Tech Investments in North America to Surge Demand for ESG Services

In 2024, North America is likely to hold around 45% of the global ESG reporting software market share. It is attributed to rising sustainable investments and corporate sustainability pledges. With an emphasis on lowering carbon footprints, increasing social responsibility, and implementing sustainable practices, key businesses are incorporating ESG considerations into their basic objectives. For instance,

• Microsoft and Salesforce have both enhanced their Sustainability Cloud capabilities in January 2024. They are offering real-time ESG data tracking and reporting tools, as well as updating their Net Zero Cloud to meet evolving ESG standards.
• As of 2023, there will be over US$ 8 trillion assets in the U.S. that would be managed according to ESG standards, making sustainable investment even more important.
• According to a 2024 poll, nearly 84% of North America’s businesses have used ESG software to increase transparency and adhere to rules.

Stringent Corporate Regulations to Push Adoption across Europe

Europe is anticipated to hold a share of 32.8% in the ESG software industry in 2024 because of strict sustainability laws and a rising focus on corporate social responsibility.

• Important regulations such as the Sustainable Finance Disclosure Regulation and the EU Taxonomy Regulation require thorough ESG reporting, which compel businesses to use cutting-edge technologies.
• More than 75% of businesses in Europe stated in 2023 that they needed strong ESG software.
• The market's growth is also demonstrated by recent innovations like SAP Europe's cloud-based ESG solution and Wolters Kluwer's upgraded ESG platform.
• ESG compliance is given top priority in strategic planning by 82% of local businesses.

Europe continues to be at the forefront of ESG adoption because of a mix of sophisticated technological solutions and legislative frameworks. It has significantly accelerated development across industries. 

Cloud-based Deployment is Favored by Companies due to High Scalability

Category	Value Share in 2024
Deployment- Cloud	54.3%

In 2024, the cloud-based deployment segment emerged as the preeminent force in the market, representing a substantial 54.3% share. Companies may increase their capabilities as their demands change due to the scalability and flexibility that cloud deployment offers.

As cloud solutions provide on-demand resources without requiring huge upfront expenditures in hardware or infrastructure, it is especially advantageous for firms handling massive amounts of ESG data. For example,

• To help with tracking and overseeing sustainability initiatives, in March 2024, Oracle introduced Oracle Cloud EPM for Sustainability. It is a new component of Fusion Cloud Organization Performance Management.

Large Enterprises Seek ESG Solutions to Enhance Risk Assessment

Category	Value Share in 2024
Organization Size- Large Enterprises	62.4%

In 2024, the large enterprises segment dominated the global ESG software industry, accounting for 62.4% of share. This was due to the integration of unique technologies like AI, machine learning, and big data analytics. These technologies enable predictive modeling, scenario planning, and risk assessment for proactive environmental impact management.

Several large enterprises are estimated to dominate the global market by associating with other big players by forming strategic alliances. For instance,

• In September 2023, KPMG partnered with Microsoft to launch new ESG digital solutions, including Circularity Tracker and Project ESG Reporting. These tools automate data collection, calculate circularity performance, and integrate with Microsoft's Sustainability Manager data intelligence solution.

Market Introduction and Trend Analysis

The ESG reporting software market is experiencing significant growth due to increasing regulatory requirements, investor scrutiny, and a growing corporate focus on sustainability and ethical governance. Rising awareness of climate change, social justice issues, and the need for robust corporate governance frameworks further propels demand for comprehensive ESG solutions that help businesses mitigate risks.

• In July 2024, Vodafone Business Germany and Envoria launched ESG Navigator, a comprehensive solution for collecting and analyzing ESG data.

Governments and regulatory bodies worldwide are implementing strict regulations that mandate more detailed and frequent ESG reporting by companies. The Corporate Sustainability Reporting Directive (CSRD) became effective in January 2023, ensuring investors and stakeholders can access crucial information to evaluate the impact of companies on people and the environment. It also aims to identify financial risks and opportunities related to climate change and other sustainability issues.

ESG software platforms streamline the process by offering integrated solutions that automate data collection, ensure accuracy, and provide real-time analytics. Integration of AI and big data is transforming the way companies manage and report their ESG metrics, reducing manual effort in gathering data from diverse sources.

Historical Growth and Course Ahead

The global ESG reporting software market recorded a CAGR of 9.8% in the historical period from 2019 to 2023. Due to public concerns about pollution, climate change, and violations of human rights, the market for social responsibility reporting software is booming.

Companies are under constant pressure to show that they are dedicated to ethical and sustainable business practices. The software’s uptake in developed and emerging countries has been aided by foreign investments, stringent environmental regulations, and public awareness.

Rising emphasis on governance and social issues is enabling market players to develop creative ways to cater to commercial goals and budgets. These software applications produce reports on human capital management, diversity, equality, inclusion, and corporate governance measures. Demand for ESG reporting software is estimated to record a considerable CAGR of 15.4% during the forecast period between 2024 and 2031.

Market Growth Drivers

Integration of AI Platforms into ESG Practices to Push Demand

The Environmental, Social, and Governance (ESG) software business is set to shift due to the integration of AI and ML technologies. These offer sophisticated data analysis tools, predictive modeling for risk assessment, and automated reporting capabilities for compliance and performance tracking.

A clear illustration of this trend can be seen in the strategic initiatives undertaken by key players in the market. For example,

• AMCS, an Ireland-based company, introduced an AI-enabled platform in August 2024. It aims to enhance sustainability practices, profitability, and regulatory compliance in resource-intensive sectors like waste management and utility services.

Businesses can adjust to market demands for sustainable growth and legal changes by using AI and ML in ESG software. It offers insights into environmental impact and operational savings.

Rising Use of Open-source Data Drives Innovation in ESG Management

The adoption of cloud-based software solutions for ESG management is on the rise due to scalability, real-time data access, and improved collaboration across global operations. Businesses are recognizing the importance of integrating cloud-based solutions. They aim to streamline ESG reporting processes, strengthen risk management, and ensure compliance with evolving regulations, as they navigate a complex regulatory landscape and public scrutiny.

ESG software purchases and strategic investments are being fueled by the growth of cloud solutions. For instance,

• In May 2024, Hg purchased AuditBoard, a cloud-based audit, risk, and ESG services provider. This demonstrates how cloud-based solutions are increasingly being seen as essential instruments for firms looking to improve operational effectiveness and ESG objectives.

To accomplish their ESG objectives and encourage improved corporate governance and sustainable business practices, firms are constantly looking for cutting-edge cloud technology.

Market Restraining Factors

Complexity of Standardizing ESG Data Limits Market Growth

Organizations find it challenging to adopt a unified strategy due to distinct needs, reporting procedures, and legal frameworks. These make it tough for ESG reporting software market players to standardize significant data across industries.

Small-scale businesses' ability to successfully participate in ESG activities is frequently restricted by the high costs of establishing and maintaining sophisticated systems. These include software procurement, integration, and training. It has an impact on the financial condition of these businesses.

Organizations also face challenges in ESG reporting standards due to variability. It leads to confusion and uncertainty, especially in social and governance domains, where subjective metrics make measurement difficult. Organizations often face difficulties due to the intricacies of ESG reporting and reporting regulations. It can turn off potential investors and impede expansion of the industry.

Key Market Opportunities

Integration of Blockchain Technology in ESG Software to Create Avenues

The ESG software industry is leveraging opportunities due to the integration of blockchain technology. It promises to improve data transparency and traceability, offering a significant advantage in meeting stakeholder demands for accountability and accuracy in ESG reporting.

By preventing information from being altered or deleted, blockchain technology can produce unchangeable records of ESG-related data. It can also assure its integrity and credibility, thereby improving the dependability of firms' KPIs.

For investors, customers, and regulatory agencies, ESG standards are essential. Businesses may stand out in a crowded market by clearly documenting their social governance and sustainability initiatives. Blockchain can exhibit transparency, improve stakeholder interactions and reputation, and increase compliance with reporting criteria.

Companies to Fuse ESG with Risk Management and EHS Solutions

By streamlining compliance monitoring, increasing data accuracy, and strengthening risk detection and mitigation, ESG reporting software is being linked with Environment, Health, and Safety (EHS). It is also being integrated into risk management systems to improve sustainable management. For example,

• In July 2023, Sphera released an enhanced ESG platform that integrates with EHS and risk management tools. It allows companies to streamline reporting processes and align sustainability goals with operational priorities.

Demand for integrated solutions is rising as businesses face increasing pressure to meet ESG standards.

• In 2024, a survey by the World Business Council for Sustainable Development found that 76% of companies view integrated ESG and EHS systems as critical for future growth, particularly in industries like manufacturing and energy.

Regulation changes, such as the Corporate Sustainability Reporting Directive, are pushing companies to adopt robust ESG reporting mechanisms.

Competitive Landscape for the ESG Reporting Software Market

In the sustainability reporting software business, key industry players are prioritizing the development of innovative software solutions. These are aimed at assisting organizations in meeting environmental regulations and standards.

A few companies are actively seeking collaborations and partnerships. They are hence teaming up with both emerging start-ups and established firms to co-create unique investor-focused ESG software.

Several of these leading players are pursuing strategic mergers and acquisitions, a tactic designed to enhance their market presence and penetrate previously untapped regions across the globe. This dynamic approach not only strengthens their offerings but also fosters a collaborative environment that drives progress in sustainability reporting.

Recent Industry Developments

• In November 2024, Deloitte, based in London, introduced four new ESG accelerators on the Workiva platform. These would assist companies in complying with the EU's Corporate Sustainability Reporting Directive, including double materiality, financed emissions calculation, regulatory gap assessments, and workflow tracking.
• In September 2024, Oracle, based in Texas, introduced Oracle Fusion Cloud Sustainability. It is a comprehensive application for companies to manage and report on sustainability initiatives, integrating data from ERP and SCM applications.
• In July 2024, Schneider Electric, headquartered in France, introduced the EcoStruxure Resource Advisor platform for sustainability data management. It aims to streamline ESG reporting, manage renewable energy projects, reduce carbon footprints, optimize energy procurement, and enhance operational efficiency.
• In July 2024, U.S.-based IBM and JLL integrated the former’s Envizi ESG Suite into JLL's Sustainability Program Management. They aim to enhance ESG reporting and data management for commercial real estate properties.

ESG Reporting Software Market Report Scope

Attributes	Details
Forecast Period	2024 to 2031
Historical Data Available for	2019 to 2023
Market Analysis	US$ Million for Value
Key Regions Covered	North America Europe East Asia South Asia and Oceania The Middle East and Africa Latin America
Key Market Segments Covered	Type Deployment Organization Size Vertical Region
Key Companies Profiled in the Report	Datamaran EcoVadis NAVEX Global, Inc. OneTrust, LLC Refinitiv SAS Institute Inc. Sustainalytics TruValue Labs Verisk 3E Wolters Kluwer N.V. Nasdaq PWC Diligent Sphera Accuvio
Report Coverage	Market Forecast and Trends Company Share Analysis Competitive Intelligence DROT Analysis Market Dynamics and Challenges Strategic Growth Initiatives
Customization and Pricing	Available upon request

ESG Reporting Software Market Segmentation

By Type

• Environmental Management Software
• Social Management Software
• Governance Management Software
• Others

By Deployment

• On-premise
• Cloud

By Organization Size  

• SMEs
• Large Enterprises

By Vertical

• BFSI
• Energy and Utilities
• Manufacturing
• Healthcare
• Retail
• IT and Telecommunications
• Government and Public Sector
• Others

By Region

• North America
• Europe
• East Asia
• South Asia and Oceania
• Latin America
• The Middle East and Africa

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