Investor ESG Software Market Size to Touch USD 2.011 Billion By 2030
Investor ESG Software Market Size in 2021 was USD 0.558 Billion, Market Value set to reach USD 2.011 at 15.7% CAGR
Investor ESG Software Market Overview
ESG stands for Environmental, Social, and Governance; these three areas of focus are becoming increasingly important for companies and investors as a way to ensure that the companies they are investing in are doing good things for the world and not just making profits.
- Environmental refers to a company's impact on the environment, such as its greenhouse gas emissions, energy use, and waste management practices.
- Social refers to a company's impact on society, such as its labor practices, treatment of customers and suppliers, and contributions to the community.
- Governance refers to a company's leadership, organizational structure, and overall management, including issues such as transparency, ethics, and risk management.
The investor ESG (Environmental, Social, and Governance) software market is a rapidly growing segment of the financial technology industry. Investor ESG software is designed to help investors assess the impact of their investments on environmental, social, and governance issues of companies they may want to invest in.
The market for investor ESG software is driven by increasing awareness and concern about the impact of investments on society and the environment, as well as increased pressure from regulators and investors for greater transparency and accountability in the financial sector.
Some of the key players in the investor ESG software market include MSCI, Sustainalytics, Bloomberg, and TruValue Labs. The market is also seeing an influx of new players, including start-ups and fintech companies, that are developing innovative solutions to address the growing demand for ESG data and analysis.
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Investor ESG Software Market Research Report Highlights and Statistics
- The global investor ESG software market size was valued at USD 0.558 Billion in 2021 and is expected to expand at a CAGR of 15.7% from 2022 to 2030, market cap to reach USD 2.011 Billion by 2030.
- Increasing awareness among investors and institutions regarding the financial impact of environmental, social, and governance (ESG) factors on companies is driving the market growth.
- The software segment accounted for the largest share of the market in 2020, due to the increasing adoption of ESG analysis software by investment managers, financial advisors, and institutional investors.
- The cloud-based deployment mode segment is expected to witness the highest growth rate during the forecast period, due to the cost-effectiveness and ease of accessibility of cloud-based solutions.
- North America dominates the market due to the early adoption of ESG investments and the presence of major players in the region and the Asia Pacific is expected to witness the fastest growth rate during the forecast period, due to various factors, one of which includes the alarming rates of carbon emissions in the region.
- Key market players include Bloomberg, MSCI, Sustainalytics, ISS ESG, RobecoSAM, TruValue Labs, Vigeo Eiris, and Sustainalytics.
Trends in the Investor ESG Software Market
- Environmental, social, and governance (ESG) investing has been gaining increasing attention in recent years. ESG investments are focused on companies that have positive environmental and social impact, as well as strong governance practices.
- The growing awareness of the importance of sustainability is driving more and more investors to consider ESG factors when making investment decisions. This is evident in the fact that, globally, ESG funds have seen record inflows in recent years.
- Another trend is the increase of corporate reporting on ESG issues as well as more standardization in ESG reporting and more third party verifiers.
- More and more companies are recognizing the financial benefits of sustainable practices and are incorporating them into their business models. This is evident in the fact that companies with strong ESG performance tend to have lower costs, higher revenues, and less volatility.
- The pressure from the public is another trend, as people are becoming more aware of the impact of business on society and environment, and demand more transparency from companies. This is leading to more engagement from companies with stakeholders and more commitment to sustainability.
- Lastly, the trend in ESG is also being driven by regulatory changes. With a growing number of governments around the world setting targets for reducing greenhouse gas emissions and promoting sustainable practices, companies are increasingly incorporating ESG considerations into their strategies to meet these regulations.
Investor ESG Software Market Dynamics
The global investor ESG software market size is experiencing significant growth as more and more investors and institutions become aware of the financial impact of environmental, social, and governance (ESG) factors on companies. This awareness is driving an increase in demand for ESG analysis software, which is used by investment managers, financial advisors, and institutional investors to evaluate the performance of companies in these areas.
The market growth is also driven by the increasing adoption of cloud-based deployment mode, which is cost-effective and easy to access. The growth of the investor ESG software market size is a clear indication that ESG considerations are becoming increasingly important for investors. Companies, investors, and other stakeholders are recognizing that addressing ESG issues can have a positive impact on a company's financial performance, providing a strong incentive for the continued growth of this market.
Investor ESG Software Market Growth Hampering Factors
The investor ESG software market has been seeing significant growth in recent years, as more and more investors become aware of the importance of considering environmental, social, and governance factors when making investment decisions. However, there are several factors that could slow down the growth of this market.
- The lack of reliable and comparable data on the environmental, social and governance performance of companies is one of the biggest challenges for ESG.
- Limited integration with mainstream financial analysis can be another challenge as many investors still rely heavily on traditional analysis methods to make investment decisions.
- The lack of a common framework for ESG analysis and reporting makes it difficult for investors to compare the ESG performance of different companies and sectors.
- Limited availability of specialized ESG investment products: Despite the growing demand for ESG investment products, there is still a limited availability of such products in the market.
- Resistance from some investors to the thought of integrating ESG considerations and companies not willing to disclose information about their ESG performance can be another growth hindering factor.
However, despite these challenges, the market for investor ESG software is expected to continue growing in the long term, as more and more investors recognize the importance of considering ESG factors in their investment decisions."
- Asset class: ESG investments can be segmented by the types of assets they target, such as equities, fixed income, real estate, and private equity.
- Type of investor: The market can also be segmented by the type of investor, such as institutional investors, retail investors, or impact investors.
- Region: The market can be segmented by the regions in which the investments are targeted, such as developed markets, emerging markets, and frontier markets.
- ESG strategies: ESG strategies can be segmented as Positive, Negative and Best-in-class screening. Positive screening focuses on investing in companies that excel in ESG performance, Negative screening excludes companies with poor performance, and Best-in-class screening invests in companies that are leaders in their industry in terms of ESG performance.
- Product types: Active, Passive and Impact Investing. Active investing involves taking a more direct role in the management of a portfolio, passive investing passively tracks an index and Impact investing invests in companies, organizations, and funds to generate beneficial social, measurable and environmental impact considering ROI.
Investor ESG software Market Overview by Region
The market for investor Environmental, Social, and Governance (ESG) software is growing globally, with a particularly strong presence in North America, Asia Pacific, and Europe.
In North America, the investor ESG software market share stands out as the largest in terms of revenue and is driven by the increasing adoption of sustainable investment practices by institutional investors, as well as the growing awareness of the financial risks associated with environmental and social issues.
In Asia Pacific, the market is driven by the increasing awareness of the importance of sustainable investing among retail investors, as well as the growing number of government initiatives promoting sustainable investing.
In Europe, the investor ESG software market share is driven by the increasing regulatory focus on sustainable investing and the growing demand for ESG data and analysis by institutional investors.
Investor ESG software Market Key Players
- Emex Software Ltd
- Fincite Gmbh
- Locus Technologies
- EnHelix Software
- Wolters Kluwer NV
- Intelex Technologies, ULC,
- Cority Software Inc.,
- MSCI Inc.,
- Bloomberg LP,
- Sustainability Accounting Standards Board (SASB),
- Thomson Reuters,
- Morningstar Inc.,
Other players include ISS ESG, FactSet Research Systems Inc., Truvalue Labs Inc., S&P Global Inc., FTSE Russell, Aspect Software, Ethix SRI Advisors, Beyond Ratings, Vigeo Eiris, Arabesque Partners, EcoVadis, CarbonDelta AG, RepRisk AG, IsoMetrix Software, Ltd., OpenInvest, Dynamo Software, Inc., Envizi and Greenstone+ Ltd.
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Mr. Frank Wilson
Acumen Research and Consulting