The market for ESG reporting software is set to ‘skyrocket’ in the coming years, growing at a compound annual growth rate (CAGR) of 26% from 2023 to 2029, a new report by Verdantix has found.
According to the report, the global ESG reporting software market is set to grow from over $1.3 billion in 2023 to over $5.6 billion in 2029, with Europe leading the way with 29% growth. The market in North America is set to grow by 25%, while Asia will grow by 24%.
The surge in interest in ESG reporting software is set to be fuelled by tightening regulations, such as the EU’s Corporate Sustainability Reporting Directive (CSRD), as well as increased investor and stakeholder demands for auditable, sustainable business data.
Sustanability reporting
“Global ESG reporting software spend is projected to surge, peaking between 2026 and 2028, before stabilising,” commented Kim Knickle, research director of the ESG & Sustainability practice at Verdantix.
“Over 50,000 firms globally are facing imminent sustainability reporting deadlines such as the CSRD, with significant risks of non-compliance driving demand.”
Manufacturing and retail
In terms of the sectors in which ESG reporting software is set to see the most growth, manufacturing will see a CAGR of 29%, with retail seeing a CAGR of 29%.
Both sectors have ‘highly complex supply chain networks’ and are facing ‘increasing pressure to provide holistic and high-quality, auditable data’, prompting an uptick in investment.
In addition, legislation such as the EU Corporate Sustainability Due Diligence Directive (CSDDD), the US Uyghur Forced Labor Prevention Act (UFLPA) and the Australian Modern Slavery Act are likely to prompt rapid action.
“As businesses face ever-evolving complexities, robust, adaptable reporting technologies are critical to ensure transparency, build stakeholder trust and maintain a competitive edge,” Knickle added. “Beyond compliance, firms are using ESG reporting and data management tools to enhance decision-making, improve efficiency, and manage risks – which is driving the involvement of a more diverse set of stakeholders, like finance and compliance teams.” Read more here.
