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Posted On: 12/20/2024 4:39:46 PM
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Research Delves into Why ESG Reporting Software is Becoming Popular
The use of specialized software solutions to streamline ESG reporting among companies is increasing. This comes as ESG reporting continues to grow into a popular business practice, providing firms a powerful tool to show their commitment to responsible governance and sustainability.
The reporting software automates the collection of data from different sources across an organization, decreasing the effort and time needed for manual collection. It also validates and compiles the information into centralized databases, allowing firms to compare performance against benchmarks, analyze trends, and find areas of improvement. This is in addition to facilitating the production of standardized reports aligned to different reporting frameworks, which helps ensure regulatory compliance.
With ESG factors influencing the decision-making processes of stakeholders, more companies are realizing the importance of comprehensive and transparent ESG disclosures.
Verdantix projects the ESG reporting software market will reach $5.6 billion by 2029. As of 2023, the value of this market stood at US$1.3 billion. Europe is expected to lead the way, with a projected compound annual growth rate of 29%. This increase will mainly be attributable to the implementation of the European Union’s Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive.
Asia and North America follow close behind, with projected growth rates of 24% and 25% respectively.
In its report, the London-based research and advisory firm argues that this market’s growth will be driven by increased pressure from stakeholders and investors for auditable and transparent ESG data as well as strict regulations.
Verdantix Research Director of the ESG & Sustainable practice Kim Knickle adds that global spend on ESG reporting software may also increase, hitting its peak between 2026 and 2028. From its analysis, the company determined that firms leading the spend increase were mostly from industries with complex supply chains, like wholesale/retail trade and manufacturing.
So, why is ESG reporting important?
There are many benefits to ESG reporting, including:
Stakeholder and investor engagement
Transparency in ESG efforts strengthens trust among stakeholders and investors while also demonstrating an organization’s commitment to generating value in the long-term.
Improved financial decision-making
ESG reporting offers insights that may facilitate better resource allocation as well as strategic planning for businesses.
Risk identification
Reporting also allows businesses to identify potential risks and take steps to mitigate them before any damage can be done.
Sustainability performance
By tracking performance in sustainability metrics, ESG reporting enables organizations to set measurable objectives and improve their overall performance.
As more software providers come up with many more alternative systems to report ESG data, enterprises like Energy and Water Development Corp. (OTCQB: EAWD) are more likely to get the packages that are best suited to their unique reporting needs.
NOTE TO INVESTORS: The latest news and updates relating to Energy and Water Development Corp. (OTCQB: EAWD) are available in the company’s newsroom at https://ibn.fm/EAWD
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
The use of specialized software solutions to streamline ESG reporting among companies is increasing. This comes as ESG reporting continues to grow into a popular business practice, providing firms a powerful tool to show their commitment to responsible governance and sustainability.
The reporting software automates the collection of data from different sources across an organization, decreasing the effort and time needed for manual collection. It also validates and compiles the information into centralized databases, allowing firms to compare performance against benchmarks, analyze trends, and find areas of improvement. This is in addition to facilitating the production of standardized reports aligned to different reporting frameworks, which helps ensure regulatory compliance.
With ESG factors influencing the decision-making processes of stakeholders, more companies are realizing the importance of comprehensive and transparent ESG disclosures.
Verdantix projects the ESG reporting software market will reach $5.6 billion by 2029. As of 2023, the value of this market stood at US$1.3 billion. Europe is expected to lead the way, with a projected compound annual growth rate of 29%. This increase will mainly be attributable to the implementation of the European Union’s Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive.
Asia and North America follow close behind, with projected growth rates of 24% and 25% respectively.
In its report, the London-based research and advisory firm argues that this market’s growth will be driven by increased pressure from stakeholders and investors for auditable and transparent ESG data as well as strict regulations.
Verdantix Research Director of the ESG & Sustainable practice Kim Knickle adds that global spend on ESG reporting software may also increase, hitting its peak between 2026 and 2028. From its analysis, the company determined that firms leading the spend increase were mostly from industries with complex supply chains, like wholesale/retail trade and manufacturing.
So, why is ESG reporting important?
There are many benefits to ESG reporting, including:
Stakeholder and investor engagement
Transparency in ESG efforts strengthens trust among stakeholders and investors while also demonstrating an organization’s commitment to generating value in the long-term.
Improved financial decision-making
ESG reporting offers insights that may facilitate better resource allocation as well as strategic planning for businesses.
Risk identification
Reporting also allows businesses to identify potential risks and take steps to mitigate them before any damage can be done.
Sustainability performance
By tracking performance in sustainability metrics, ESG reporting enables organizations to set measurable objectives and improve their overall performance.
As more software providers come up with many more alternative systems to report ESG data, enterprises like Energy and Water Development Corp. (OTCQB: EAWD) are more likely to get the packages that are best suited to their unique reporting needs.
NOTE TO INVESTORS: The latest news and updates relating to Energy and Water Development Corp. (OTCQB: EAWD) are available in the company’s newsroom at https://ibn.fm/EAWD
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
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