Investor ESG Software Market by Component, Deployment, and Geography - Forecast and Analysis 2023-2027

Investor ESG Software Market Forecast 2023-2027

The Investor ESG Software Market size is forecast to increase by USD 616.29 million at a CAGR of 13.3% between 2022 and 2027. The growth of the market depends on several factors, including steady growth in corporate data volumes, a shift toward green initiatives, and increased demand for across enterprises. is becoming increasingly important in investment decisions and portfolio management techniques. ESG performance and engagement are factored into investors' long-term investment decisions and portfolio management techniques. ESG software is a multi-module system used for EHS, risk management, regulatory compliance, and sustainability management.

What will be the size of the  Investor ESG Software Market During the Forecast Period?

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Market Segmentation 

This market report extensively covers market segmentation by component (software and services) and deployment (on-premises and cloud based solutions). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

By Component Insights

The market share growth by the software segment will be significant during the forecast period. Software solutions make it easier to collect, analyze, and publish ESG measurement data as sustainability and responsible investing grow in popularity. By helping investors evaluate companies' ESG performance, smarter investment decisions that adhere to ethical and environmental standards are made possible.

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The software segment showed a gradual increase in the market share of USD 273.48 million in 2017 and continued to grow by 2021. The software industry offers the most advanced ESG software, including data collection and integration, predictive analytics, and visualization. The software market continues to grow, becoming an important channel for integrating ESG concerns into investment strategies across the globe as the rules and investor requirements for ESG transparency grow. This will drive the growth of the investor environmental, social, and governance (ESG) software market during the forecast period. 

By Deployment

The growth of the on-premises ESG investor software segment is expected to outpace the cloud-based ESG investor software segment during the forecast period. The Energy and Utilities (E&U) industry is one of the key end users of ESG software and services. Furthermore, China is one of the top investment destinations for smart grid solutions. China is expected to reduce energy intensity by 13.5% (ratio of total annual energy consumption to annual GDP) and reduce carbon emissions by 18% between 2012 and 2022 under the new five-year plan. announced in March 2021. Therefore, end-users operating in the E&U industry are subject to such standards, which will boost the demand for various investor ESG services and software during the forecast period.

Market Dynamic and Customer Landscape

Key Driver

The shift toward green initiatives has been a major driver of the significant growth of the global market. Investors are starting to put more emphasis on ESG considerations in their decision-making due to a growing awareness of concerns including corporate governance, social challenges, and climate change. The demand for ESG reporting software has been further strengthened as governments and regulators across the globe have introduced rules to encourage companies to adopt sustainable practices.

Furthermore, prominent examples, such as the Paris Agreement, have highlighted the importance of environmental stewardship and encouraged investors to seek in-depth ESG data and analysis. Major asset management firms, such as BlackRock and Vanguard, have incorporated ESG criteria into their investment strategies, setting outstanding examples for other institutional investors. Hence, these factors will drive the market growth during the forecast period. 

Key Trends

Regulatory and reporting compliance is the primary trend in the global market. Enterprises are looking for ESG reporting software to help them to manage reporting challenges across a variety of frameworks and standards, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD) as sustainability becomes more crucial in investment decisions. By streamlining data collection, analysis, and reporting, these software solutions ensure the accuracy and transparency of ESG information.

For example, a global company can track TCFD requirements by using ESG software to track and report on its carbon footprint across multiple facilities. Investor demand for comprehensive ESG data to make informed decisions is driving this trend and encouraging a sustainable approach to corporate governance and investment. Due to these factors, the market is expected to grow significantly during the forecast period. 

Major Restrain

High initial capital investments is a challenge that affects the growth of the market. Replacing existing infrastructure with EHS infrastructure is costly. SMEs and industries face a significant challenge in adopting such infrastructure due to high upfront costs that limit market growth. As a result, the substantial capital required for infrastructure investments in EHS solutions has limited the growth of the global ESG software market for investors.

Furthermore, the difficulty in integrating ESG software with corporate ERP systems is another important investor market challenge. ESG integration is quite challenging because the company's IT infrastructure may not support the ESG investor software that the company deploys. This challenge is therefore likely to affect the adoption of ESG reporting software and services and thus impede the growth of the global market during the forecast period. 

Regional Overview

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North America is estimated to contribute 42% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The US is the leading country in implementing ESG software and services for investors. Due to the increasing attention of governments toward good workplace health and safety practices in the region, the regional investor environmental, social, and governance (ESG) software market has gained tremendous popularity and prominence in various industries including E&U, as well as chemicals and materials.

Moreover, factors such as the presence of a strong economy, the enforcement of the Clean Air Act, clean air technology advances, and the presence of several industrial clean air technology companies make North America the leading regional segment for global ESG software for marketplace investors. The significant reduction in industrial emissions can also be attributed to the country's strict regulations aimed at reducing industrial emissions, which will also increase the need for sustainability management and ESG software for investors during the forecast period. 

Market Customer Landscape

The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Investor ESG Software Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• Diligent Corp.: The company offers namely Diginex ESG an intuitive and exceptional software tool to work with clients on their ESG requirements.
• Emex Software Ltd.: The company offers for implementing, facilitating, and measuring responsible investing programs.
• Fincite GmbH: The company offers to manage environmental, social, and economic impacts at a local, regional, and corporate level ensuring alignment with relevant stakeholder expectations, digitally collect information from source and create customized questionnaires to support the data.
  

The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• Anthesis Consulting Group
• Conservice
• Diginex Solutions HK Ltd.
• Dynamo Software Inc.
• Fortive Corp.
• International Business Machines Corp.
• Locus Technologies
• Metrix Software Solutions Pty Ltd.
• Nasdaq Inc.
• Novisto Inc.
• PricewaterhouseCoopers LLP
• Refinitiv
• Sphera Solutions Inc.
• Wolters Kluwer NV
• Workiva Inc.
• Vervantis Inc.
• Cority Software Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Analyst Overview

The climate stress, financial services organizations are increasingly scrutinizing their operations for resilience against climate risks. As guardians of financial stability, they play a pivotal role in financing the low-carbon transformation imperative for climate resiliency.  Central banks are intensifying climate stress testing to assess the vulnerability of financial systems to climate-related shocks. Such evaluations factor in the net-zero pledges made by institutions, aiming to align financing activities with climate objectives.

In this paradigm shift, supply chains are under scrutiny for their climate risk and return exposure, with shareholders urging transparency and accountability in climate-related disclosures. Small and Medium Enterprises (SMEs) face particular scrutiny, with pressure to adopt low-carbon practices. Financial institutions must proactively manage climate risks, ensuring the long-term viability of investments while supporting the transition to a low-carbon economy. Through collaboration and innovative financing mechanisms, they can foster climate resilience and contribute to global sustainability efforts.

 

The market also caters to corporate firms, government entities, financiers, and stakeholders seeking ESG investing solutions. Leveraging sophisticated technologies like advanced analytics, Internet of Things (IoT), and SaaS, it addresses mobility and sensor systems' business integration demand. With a focus on environmental, social, and governance considerations, it facilitates stock market investing transactions, economic development, and risk reduction. Advanced ESG software applications ensure environmental, social, and governance (ESG) considerations for future financial performance evaluation, making it a cost-effective and reliable method for collecting, validating, and aggregating data and assets. This market also aids in corporate social responsibility monitoring and performance enhancements, particularly in banking and financial sectors, aligning with the preferences of millennials and Gen Z in the workforce amid technological advancements.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Component Outlook (USD Million, 2017 - 2027)
  • Software
  • Services

• Deployment Outlook (USD Million, 2017 - 2027)
  • On-premises
  • Cloud

• Region Outlook (USD Million, 2017 - 2027)
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile 
    • Brazil 
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Investor ESG Software  Market Scope
Report Coverage	Details
Page number	157
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 13.3%
Market growth 2023-2027	USD 616.29 million
Market structure	Fragmented
YoY growth 2022-2023(%)	12.71
Regional analysis	North America, APAC, Europe, South America, and Middle East and Africa
Performing market contribution	North America at 42%
Key countries	US, China, Germany, UK, and France
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Anthesis Consulting Group, Conservice, Diginex Solutions HK Ltd., Diligent Corp., Dynamo Software Inc., Emex Software Ltd., Fincite GmbH, Fortive Corp., International Business Machines Corp., Locus Technologies, Metrix Software Solutions Pty Ltd., Nasdaq Inc., Novisto Inc., PricewaterhouseCoopers LLP, Refinitiv, Sphera Solutions Inc., Wolters Kluwer NV, Workiva Inc., Vervantis Inc., and Cority Software Inc.
Market dynamics	Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period
Customization purview	If our market growth analysis report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2023 and 2027
• Precise estimation of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market trends and changes in consumer behavior
• Growth of the market across North America, APAC, Europe, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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