Rising regulatory demands and increasing stakeholder pressure are prompting a surge in demand for ESG reporting and data management software.
According to a report by Verdantix, this is leading to the creation of a multi-billion dollar market.
The report notes that vendors must strive to stay abreast of this rapidly evolving market. The research identifies a rising global recognition of the need to enhance sustainability programmes, a factor that is stimulating demand for innovative software.
Eleven vendors leading in this domain were identified, including Benchmark Gensuite, Cority, Diligent, IBM, Intelex, Nasdaq, Sphera, UL Solutions, VelocityEHS, Wolters Kluwer, and Workiva. These vendors are responding to the demands of ESG reporting and data management software, which requires aggregation of sustainability data from all departments to dismantle silos and enhance communication with stakeholders.
In the absence of a global framework, corporations are progressively aligning with various voluntary reporting standards. Companies are moving away from annual sustainability reporting, choosing instead more frequent reporting to meet stakeholder demands. Additionally, a growing number of firms are integrating sustainability data into their financial reports, creating a competitive advantage.
There is a rising demand for digital ESG reporting, prompting software vendors to scale up their offerings with fast-to-deploy, configurable solutions. Pricing models are also evolving, moving away from charging for the number of system users. Moreover, strategic partnerships are being formed with complementary vendors, enabling them to enhance their offerings without significant product development investments.
Verdantix principal analyst Jessica Pransky said, “As the ESG reporting and data management software market is projected to soar to $4.3bn by 2027, it is imperative for vendors to proactively stay ahead and remain competitive. With a widening scope of business functions engaged in ESG implementation and a continuously evolving regulatory landscape, agility and adaptability are paramount. To meet escalating demand, vendors must deliver fast-to-deploy, scalable solutions that address market trends and cater to the evolving needs of businesses.”
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