ESG Reporting Software Market Size, Share, and Industry Analysis, By Component (Software and Services); By Deployment (Cloud and On-premise) By Enterprise Type (Large Enterprises and Small and Medium Enterprises (SMEs)); By End-user (BFSI, IT and Telecom, Government, Manufacturing, Retail and Consumer Goods, Healthcare, and Others), and Regional Forecast, 2024-2032

ESG reporting software is a digital tool designed to facilitate the collection, analysis, and reporting of Environmental, Social, and Governance (ESG) data within organizations. It incorporates features such as data aggregation, metric tracking, stakeholder engagement, and reporting functionalities to help companies measure and disclose their sustainability performance in accordance with regulatory requirements and stakeholder expectations. The ESG reporting software market has experienced significant growth due to increased corporate focus on sustainability and responsible business practices. For instance,

• According to the International Energy Agency (IEA), a Paris-based organization providing analysis, policy recommendations, and data on the global energy industry, energy investments rose to USD 1.9 trillion, 10% higher in 2021 compared to 2020.


• Furthermore, industry experts project a growth rate of 13%, highlighting the adoption of the software throughout the analysis period.

Key players in the market offer software solutions to help companies track, manage, and report on their ESG performance metrics. These solutions include features for data collection, analysis, reporting, and stakeholder engagement. As regulations around ESG disclosure continue to evolve and investor interest in ESG factors grows, the demand for ESG reporting software is expected to increase further.

Impact of Generative AI on the ESG Reporting Software Market

Generative AI transforms the market by empowering more comprehensive and sophisticated sustainability management. By leveraging advanced algorithms and deep learning techniques, generative AI enables ESG software platforms to process vast volumes of varied data, including textual, numerical, and multimedia sources. This capability facilitates more accurate and granular analysis of environmental impacts, social initiatives, and governance practices, thereby enhancing organizations' ability to assess and improve their sustainability performance. For instance,

• Generative AI algorithms can analyze satellite imagery to monitor deforestation rates, analyze the sentiment of social media posts to gauge public perception of a company's social responsibility efforts and process natural language to extract insights from regulatory filings related to corporate governance practices.

Furthermore, generative AI enables these software platforms to conduct scenario modelling and predictive analytics, allowing organizations to anticipate and mitigate potential risks while identifying opportunities for sustainable growth. Through sophisticated simulations based on historical data and future projections, generative AI algorithms can assess the potential impact of various ESG initiatives, regulatory changes, and market trends on a company's financial performance and reputation. For instance,

• In November 2023,  Nasdaq unveiled Nasdaq Sustainable Lens, a SaaS-based AI platform designed to help companies and investors leverage ESG data from thousands of companies. The platform grants access to sustainability-related disclosures from over 9,000 companies, facilitating the summarization of data and addressing stakeholder inquiries. It also enables users to benchmark disclosures against reporting standards and other companies, functioning as an AI-driven ESG assistant, streamlining manual research processes.

Overall, generative AI enhances the efficacy and agility of ESG management by providing organizations with actionable insights and foresight to navigate the complexities of sustainability in today's dynamic business landscape.

Key Insights

The report covers the following key insights:

• Micro Macro Economic Indicators


• Drivers, Restraints, Trends, and Opportunities


• Business Strategies Adopted by Key Players


• Impact of Generative AI on the Global ESG Reporting Software Market


• Consolidated SWOT Analysis of Key Players

Segmentation

Analysis By End-user

ESG reporting software has a broad range of applications in various industries such as BFSI, IT and telecom, government, manufacturing, retail and consumer goods, healthcare, and others. The BFSI segment holds the highest share in the market due to stringent regulatory mandates, such as the EU Sustainable Finance Disclosure Regulation (SFDR) and Basel III framework, requiring comprehensive ESG disclosure. Additionally, the sector faces heightened investor scrutiny and ESG-related risks, stimulating the adoption of ESG reporting software for robust risk management, transparency, and strategic decision-making.

Furthermore, the government sector is projected to depict the highest CAGR in the market due to mounting regulatory pressures, mandates for transparent governance, and the need to monitor and mitigate environmental impacts, necessitating advanced software solutions to streamline data collection, analysis, and reporting processes efficiently. Such applications are boosting the use of ESG reporting software in multiple industries.

Regional Analysis

The global ESG reporting software market is segmented into five regions: North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

North America captures the highest share in the ESG software market due to its advanced regulatory environment, including SEC requirements, fostering widespread adoption of ESG reporting solutions.

• According to Standford University’s research, approximately two-thirds of Gen Z and millennial investors were anxious about environmental and social issues. Furthermore, young investors with over USD 250,000 of capital stated that they would give up 14% of their capital to address advanced ESG concerns.

Moreover, the region's mature corporate governance practices and the presence of established players further contribute to its dominance in the market.

The Asia Pacific region demonstrates the highest CAGR in the ESG software market owing to its rapidly evolving regulatory landscape and the increasing adoption of sustainable business practices. Furthermore, the growing investor demand for ESG integration, driving the need for advanced ESG software solutions.

Distribution of the Global ESG Reporting Software Market, By Region

• North America – 32%


• South America – 7%


• Europe – 24%


• Middle East and Africa – 12%


• Asia Pacific – 25%

Key Players Covered

The report provides the profiles of key players such as Wolters Kluwer, Benchmark Digital Partners LLC, Brightest Inc., Nasdaq, Workiva, Diligent, Cortify, Intelex, Salesforce, Inc., UL Solutions, Greenstone, Novisto, Emex, Anthesis, Diginex Solutions HK Ltd., and Keramida.

Key Industry Developments

• September 2023: Salesforce introduced new Einstein features for Net Zero Cloud to simplify ESG reporting for companies amidst evolving regulations. Starting in 2024, about 50,000 firms, including numerous U.S.-based multinationals, must adhere to the Corporate Sustainability Reporting Directive (CSRD), disclosing climate-related financial risks, societal impact, and scope of three emissions from their supply chains.


• May 2023: KPMG firms partnered with Microsoft to introduce innovative solutions supporting businesses in their ESG journey. Leveraging KPMG's significant investment in technology and global digital solutions for ESG, they aim to offer clients data-driven insights and assistance, ranging from environmental impact tracking to sustainable growth strategy implementation.


• May 2023: UL Solutions unveiled its ESG management portfolio, aimed at facilitating comprehensive enterprise sustainability data management programs, with a specific emphasis on carbon and scope three emissions. This portfolio integrates established advisory practices, software, and verification services to cater to various levels of ESG reporting maturity. By leveraging this portfolio, sustainability and ESG professionals can expedite their programs and meet regulatory and voluntary reporting obligations in a dynamic regulatory environment.