Environmental, social, and governance (ESG) data assesses a company’s non-financial performance and sustainability policies.

The three pillars of ESG include:

• Environmental Data such as the quantity of greenhouse gases generated by a company into the atmosphere, energy usage data, water usage data, waste reduction data, carbon footprint reduction data, waste reduction data.

• Social Data such as fair pay and living wages data, compliance with labor regulations, workplace health & safety, equal employment opportunity.

• Governance Data such as Corporate governance, compliance, ethical business practices, accounting transparency and integrity.

ESG measurements are classified as quantitative or qualitative. Quantitative metrics are numerical statistics that can be directly measured and compared, such as energy consumption, water consumption, greenhouse gas emissions, and energy consumption. While quantitative metrics include numerical data, qualitative metrics include non-numerical data that is more difficult to evaluate and compare, such as the company's labor policies, dedication to diversity, equality, and inclusion (DEI), and others. This information is used to develop reports that indicate a company's capacity to successfully implement ESG initiatives.

Rising demand from investors and companies drives the Global ESG reporting market
Investors are increasingly using ESG indicators to analyze firms they want to buy or invest in. ESG software monitors ESG activities, and investors use ESG reports to filter assets, align investments, and avoid corporations that may cause environmental harm, corruption, or social blunders. Companies/organizations are also using ESG reporting to report on their efforts and progress on climate change, corporate social responsibility (CSR) activities, regulatory compliance, goal monitoring, governance, and sustainability.

“……Nowadays, investors while evaluating companies look for ESG disclosures to steer their investment decision-making. Investors perceive that organizations that perform well on ESG metrics are relatively less risky, better positioned for long-term growth, and better equipped for uncertainty……”

- Marketing Director, ESG Reporting Software Provider, U.S.

Increasing prominence of artificial intelligence (AI) offers transformative opportunities for organizations in their sustainability journey thus driving the ESG reporting market
The implementation of AI is transforming the ESG landscape. It is rapidly being used to gather and analyze massive volumes of ESG data, automate processes, find trends, and forecast. AI is being used to analyze a company's exposure to environmental, social, and governance issues, such as climate change, labor practices, and corporate governance. It may also be used to automate compliance processes like examining regulatory filings and spotting holes in compliance. Players in the industry have also released a variety of AI-related products, citing the sector's lucrative possibilities. For instance,

• In March 2023, Novem ESG launched its software that is automated by Artificial Intelligence (AI) for analysis of data against ESG (Environment, Social and Governance) regulations and checklists

Regulatory compliances drive the demand for ESG disclosures expanding the ESG Reporting Market
There are a growing number of regulations across the world requiring organizations to disclose and report on ESG initiatives, sustainability, and governance. Globally, regulators are finalizing rules that require companies to disclose information on their ESG footprint in their annual reports and mainstream regulatory filings. Some of the ESG regulations that are mandatory and currently being implemented:

• In the U.S., the US SEC Climate Guidance requires public companies to disclose material business risks to investors, transparently through regular filings with the SEC, including climate change risks that may develop on their business

Competitive Landscape Analysis of the ESG Reporting Market
Some of the key players operating in the market include Wolters Kluwer, PwC, Workiva, Nasdaq, Cority/Greenstone, Diligent, Emex, Novsito, diginex, Sphera, IsoMetrix Novem ESG, C3 AI among others.
Aggressive Growth Strategies Adopted by Players to Establish Their Foothold in the ESG Reporting Market
Firms operating in this market are adopting organic and inorganic growth strategies such as launching new products, acquiring related firms, and entering into collaborations to gather further market share.

For instance,

 In July 2023, Wolters Kluwer launched TeamMate+ ESG. The solution provides easy access to essential ESG reporting standards and enables auditors to provide assurance over ESG reporting

 In May 2023, leading global enterprise Environmental, Health, and Safety (EHS) software provider Cority, acquired Greenstone, a sustainability & ESG reporting software provider

The ESG Reporting Market is expected to gain traction in the coming years as a result of increased pressure on companies to measure, disclose, and progress on ESG initiatives, technological advancements in ESG reporting software, and aggressive organic and inorganic growth strategies adopted by the players.

For more comprehensive insights, please get in touch at https://meditechinsights.com/esg-reporting-market/