ESG Reporting Software Market

The Growing demand for ESG reporting software to navigate and mitigate ESG risks is driving market growth

Market CAGR for ESG Reporting Software is driven by the growing demand for ESG reporting software to navigate and mitigate ESG risks. Effective ESG reporting software plays a crucial role in assisting companies in navigating and mitigating ESG risks, which are increasingly pivotal in today's business landscape. This software enables organizations to identify and monitor diverse ESG risks such as climate change impacts, supply chain disruptions, labor practices, and regulatory compliance. It achieves this through robust data analytics and reporting capabilities.

Companies can prioritize and address the most significant ESG risks by conducting comprehensive risk assessments, thereby enhancing resilience and sustainability. According to a 2021 Verdantix survey of 400 senior executives worldwide, a notable percentage highlighted GHG emissions management IT systems as their primary focus. This growing demand indicates a projected surge in the ESG software industry.

Additionally, ESG reporting software facilitates proactive risk management strategies by enabling companies to establish thresholds, benchmarks, and targets for ESG performance metrics. Real-time monitoring and alerts assist organizations in swiftly responding to emerging risks and implementing corrective measures to mitigate potential impacts. This proactive approach helps reduce operational and reputational risks while enhancing long-term business continuity and stakeholder confidence.

As a result, it is anticipated that throughout the projection period, demand for the ESG Reporting Software Market will increase due to the Growing demand for ESG reporting software to navigate and mitigate ESG risks. Thus, driving the ESG Reporting Software Market revenue.

Investor interest in sustainable and responsible investing is surging, significantly influencing the Global ESG Reporting Software Market Industry. Investors are increasingly prioritizing ESG factors in their decision-making processes, seeking transparency and accountability from companies. This shift is evident in the rise of ESG-focused investment funds, which have seen substantial inflows. As a response, organizations are adopting ESG reporting software to provide detailed insights into their sustainability practices. The market is projected to grow to 8.0 USD Billion by 2035, driven by the need for companies to meet investor expectations and enhance their reputational standing.

Public awareness regarding environmental and social issues is on the rise, influencing the Global ESG Reporting Software Market Industry. Consumers are increasingly demanding accountability from companies regarding their ESG practices, leading organizations to prioritize transparency in reporting. This heightened awareness is prompting businesses to invest in ESG reporting software to effectively communicate their sustainability efforts. As consumers become more discerning, companies recognize that robust ESG reporting can enhance brand loyalty and trust. This trend is likely to drive market growth as organizations seek to meet the expectations of socially conscious consumers.

The Global ESG Reporting Software Market Industry is projected to experience substantial growth over the coming years. With a market size of 1.2 USD Billion in 2024, the industry is expected to expand significantly, reaching 8.0 USD Billion by 2035. This growth trajectory indicates a compound annual growth rate (CAGR) of 18.83% from 2025 to 2035. Such projections underscore the increasing importance of ESG reporting in corporate strategies and the growing demand for software solutions that facilitate comprehensive and transparent reporting.

Technological innovations are reshaping the Global ESG Reporting Software Market Industry, enabling organizations to enhance their reporting capabilities. Advanced analytics, artificial intelligence, and blockchain technology are being integrated into ESG reporting solutions, allowing for more accurate data collection and analysis. These technologies facilitate real-time reporting and improve data integrity, which is crucial for stakeholders. As organizations seek to leverage these advancements, the demand for sophisticated ESG reporting software is expected to rise. This trend aligns with the projected CAGR of 18.83% for the period from 2025 to 2035, indicating a robust growth trajectory driven by technological enhancements.

The Global ESG Reporting Software Market Industry is experiencing heightened regulatory scrutiny as governments worldwide implement stricter environmental, social, and governance regulations. This trend compels organizations to adopt robust reporting frameworks to ensure compliance. For instance, the European Union's Corporate Sustainability Reporting Directive mandates comprehensive disclosures on sustainability practices. As a result, companies are increasingly investing in ESG reporting software to streamline their compliance processes. This regulatory environment is expected to drive the market, with projections indicating a market size of 1.2 USD Billion in 2024, reflecting the urgency for organizations to align with evolving regulations.

The increasing emphasis on corporate sustainability initiatives is a significant driver of the Global ESG Reporting Software Market Industry. Companies are recognizing the importance of integrating sustainability into their core business strategies to enhance long-term viability. This shift is prompting organizations to adopt ESG reporting software to effectively communicate their sustainability efforts to stakeholders. By providing transparent and comprehensive reports, companies can demonstrate their commitment to sustainable practices. As a result, the market is poised for substantial growth, with a projected increase in demand as businesses strive to align their operations with global sustainability goals.

By region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The anticipated expansion of the ESG Reporting Software market in North America can be attributed to several key factors. North America's ESG reporting software market is experiencing significant growth due to regulatory requirements, investor pressure, and stakeholder expectations. Businesses across Canada are increasing their investment in sustainability initiatives, with average annual budget growth expected to rise from 5.6% (2018-2020) to 11.9% (2025-2030).

The top two sustainability initiatives pursued by Canadian businesses are energy-oriented and technology-enabled: 77% are using digital tools to enhance operational efficiency, and 62% are generating energy through sustainable means such as solar panels. Companies recognize the importance of ESG reporting for compliance, reputation management, attracting investors, and risk mitigation. Consequently, there is a growing adoption of ESG reporting software across various industries.

The market is becoming increasingly competitive, with established software providers and new entrants vying for market share by offering innovative features, user-friendly interfaces, and customizable solutions to meet the diverse needs of companies aiming to enhance their ESG performance and reporting capabilities.

Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: ESG REPORTING SOFTWARE MARKET SHARE BY REGION 2023 (USD Billion)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe ESG Reporting Software Market accounts for the second-largest market share as the European companies, especially those listed on major stock exchanges, place a strong emphasis on robust corporate governance practices. According to Vena's Industry Benchmark Report, Europe leads in ESG adoption, with 93% of organizations identifying themselves as users, compared to 79% in North America and 88% in Asia-Pacific. ESG considerations are now pivotal in shaping corporate governance, influencing high-level board decisions and strategic planning. ESG reporting software is essential for companies, enabling them to transparently and effectively measure, manage, and report their ESG performance.

Further, the German ESG Reporting Software Market held the largest market share, and the UK ESG Reporting Software Market was the fastest-growing market in the European region.

The Asia-Pacific ESG Reporting Software Market is expected to grow at the fastest CAGR from 2024 to 2032. Governments throughout the Asia-Pacific region are increasingly enacting regulations and policies aimed at promoting sustainability and encouraging ESG practices. For example, Japan and South Korea have implemented frameworks to encourage corporate transparency regarding ESG issues. In India, the Securities and Exchange Board of India (SEBI) has mandated that the top 1000 listed entities must disclose ESG information under the Business Responsibility and Sustainability Reporting framework starting from the financial year 2022-23.

Recent reports indicate a significant increase in ESG investments in India, rising from USD 330 million in 2019 to USD 1.3 billion by 2023, underscoring the growing importance of ESG considerations. Moreover, initiatives such as China's Green Finance policies and India's Corporate Social Responsibility (CSR) regulations are compelling companies to adopt ESG reporting software to meet these requirements and enhance transparency. Moreover, China’s ESG Reporting Software Market held the largest market share, and the Indian ESG Reporting Software Market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the ESG Reporting Software market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the ESG Reporting Software industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global ESG Reporting Software industry to benefit clients and increase the market sector. In recent years, the ESG Reporting Software industry has offered some of the most significant advantages to the global corporate landscape. Major players in the ESG Reporting Software Market, including Wolters Kluwer (Netherlands), Nasdaq (US), PWC (UK), Workiva (US), LSEG(UK), Greenstone (UK), Diligent (US), Sphera (US), Cority (Canada), and Intelex (Canada) are attempting to increase market demand by investing in research and development operations.

Wolters Kluwer NV is a company specializing in information services and publishing. It provides a range of services, including education, research, practice management, transactional support, risk management, and compliance. Its solutions assist customers in making crucial daily decisions across diverse sectors such as healthcare, tax, accounting, audit, risk, compliance, corporate services, financial services, legal, and regulatory affairs. Headquartered in Alphen aan den Rijn, the Netherlands, Wolters Kluwer operates globally, serving markets in North America, Europe, Asia Pacific, and Latin America. In December 2022, Wolters Kluwer collaborated with Caixa Geral de Depósitos (CGD), a Portuguese state-owned banking corporation.

This partnership led to CGD adopting Wolters Kluwer's OneSumX software for regulatory reporting, ensuring compliance with directives for central registration depository and capital requirements.

Nasdaq Inc (Nasdaq) is a global technology company specializing in capital markets, offering platforms and services essential for financial operations. The company provides a comprehensive range of solutions, including data, analytics, software, exchange services, and client-centric offerings to support business strategies. Its portfolio encompasses trade management, data products, trading, and clearing services across various asset classes and financial indexes. Nasdaq also delivers corporate solutions, capital formation services, and market technology solutions. The company enhances trading efficiencies with market-agnostic smart routing and improved connectivity to dark pools, ensuring optimal execution for clients.

Operating in North America, Asia-Pacific, Europe, and the Middle East, Nasdaq is headquartered in New York City, New York, USA. In February 2022, Nasdaq expanded its collaboration with Notified, a business segment of Intrado Corporation specializing in technology-enabled services. This partnership empowers Notified customers to streamline the management and reporting of Environmental, Social, and Governance (ESG) efforts, simplifying processes for tracking, gathering, approving, and disclosing ESG data.