The global ESG reporting software market is projected to expand from $1.3 billion in 2023 to over $5.6 billion by 2029, representing a compound annual growth rate (CAGR) of 26%, research has shown.
The growth is driven by regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and demands from investors for “auditable sustainability data that minimises ESG-related risks”, according to the research by Verdantix, a research and advisory firm.
Europe is expected to lead the charge, with the region projected to grow at a CAGR of 29%. The CSRD, requiring companies to report on the impact of corporate activities on the environment and society, and complementary regulations like the Corporate Sustainability Due Diligence Directive (CSDDD), which mandate reporting and due diligence on environmental and social impacts, are driving adoption among 50,000+ EU firms and 1,000+ non-EU organisations, according to research.
North America and Asia are also poised for growth, with CAGRs of 25% and 24%, respectively. US firms are grappling with evolving federal, state, and international ESG reporting obligations, while in Asia, the adoption of International Sustainability Standards Board frameworks is gaining momentum.
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Manufacturing and wholesale and retail trade industries are expected to lead adoption, with growth rates of 28% and 29%, respectively. Complex supply chain networks and rising pressure from regulations, including the CSDDD, the US Uyghur Forced Labour Prevention Act, and Australia’s Modern Slavery Act, are driving demand in these sectors for holistic and auditable ESG data.
Kim Knickle, research director of the ESG & sustainability practice at Verdantix, said: “Global ESG reporting software spend is projected to surge, peaking between 2026 and 2028, before stabilising. Over 50,000 firms globally are facing imminent sustainability reporting deadlines such as the CSRD, with significant risks of non-compliance, driving demand.”
Knickle emphasised that businesses are turning to “robust, adaptable reporting technologies” to navigate growing complexities. These tools not only ensure transparency and build stakeholder trust but also help maintain a competitive edge. “Beyond compliance, firms are using ESG reporting and data management tools to enhance decision-making, improve efficiency, and manage risks,” she shared. This shift is also driving greater involvement from a diverse range of stakeholders, including finance and compliance teams.
“These systems are transforming how businesses operate in an evolving sustainability landscape,” she added.
