Europe Investor ESG Software Market Size and Forecast (2021 - 2031), Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Component [Software and Services (Training, Integration, and Other Services)] and Enterprise Size (Large Enterp
Description
The Europe investor ESG software market is projected to grow significantly, reaching approximately US$ 1,198.87 million by 2031, up from US$ 377.66 million in 2024. This growth represents a compound annual growth rate (CAGR) of 17.9% from 2024 to 2031.
Executive Summary and Market Analysis
European investors are increasingly prioritizing Environmental, Social, and Governance (ESG) factors in their investment decisions, driven by the urgent need to tackle climate change, governance challenges, and social inequalities. A recent survey conducted by Deutsche Bank AG, which spanned key European markets from April to June 2023, highlighted this trend. Germany had the highest response rate, followed by Belgium, Italy, and Spain, indicating a robust engagement with ESG and sustainable investing topics. This growing focus on sustainability is reflected in the rising demand for ESG software, which enables investors to seamlessly integrate ESG principles into their investment portfolios.
ESG software solutions assist investors in evaluating risks and opportunities while ensuring alignment with sustainability objectives. Comprehensive ESG solutions enhance transparency in operations and support the achievement of sustainability goals, prompting software development companies to innovate their offerings. For example, in September 2023, Thomson Reuters announced a strategic partnership with SAP SE to enhance ESG reporting capabilities. This collaboration aims to integrate Thomson Reuters ONESOURCE Statutory Reporting with SAP Sustainability Control Tower, allowing users to manage and report ESG data from a unified platform. This integration is particularly timely as businesses operating within the EU will need to comply with the Corporate Sustainability Reporting Directive (CSRD) starting January 2025, with the directive's scope expected to expand in the coming years.
Market Segmentation Analysis
The Europe investor ESG software market can be segmented based on components and enterprise size. The component segment is divided into software and services, with the software segment holding a larger market share in 2024. The services segment includes training, integration, and other related services. Additionally, the market is categorized by enterprise size into large enterprises and small to medium-sized enterprises (SMEs), with large enterprises dominating the market in 2024.
Market Outlook
The focus on innovation within the ESG software sector is anticipated to create numerous growth opportunities during the forecast period. As the demand for transparent, accurate, and actionable ESG data escalates, investors are increasingly turning to advanced ESG software solutions to inform their investment strategies. The evolving landscape of ESG factors necessitates that investors have access to comprehensive, real-time insights, which can only be delivered through innovative software tools.
Recent advancements in ESG software include the integration of cutting-edge technologies such as artificial intelligence (AI). For instance, in December 2024, Microsoft launched a suite of AI-powered tools designed to streamline ESG data management, reporting, and analysis. These tools simplify the complex processes involved in gathering and organizing ESG information, enabling companies to meet reporting requirements efficiently while gaining actionable insights into their sustainability efforts. By leveraging AI, Microsoft enhances operational efficiency, improves the accuracy of ESG reporting, and helps organizations identify trends and areas for improvement.
Similarly, in November 2024, Mitratech introduced new AI-driven features in its third-party risk management platform, Prevalent. These enhancements aim to improve the identification, assessment, monitoring, and management of risks associated with third-party vendors, suppliers, and partners, thereby strengthening compliance with ESG factors throughout the third-party lifecycle. In April 2024, ESGgo launched its One-Click Sustainability Report, an AI-powered tool that simplifies the generation of sustainability reports in line with regulatory frameworks and stakeholder expectations. This tool processes both numerical and text-based data to create customized sustainability reports, allowing investors to monitor a company's sustainability performance and predict future ESG risks and opportunities based on real-time data.
Country Insights
The Europe investor ESG software market includes key countries such as Germany, France, the UK, Italy, Russia, and others in the Rest of Europe. The Rest of Europe accounted for the largest market share in 2024, with countries like Sweden, Poland, the Netherlands, Spain, Belgium, and Greece contributing significantly. The market in this region is expected to grow due to collaborations and partnerships among market players, alongside an increasing focus on sustainability compliance in countries like the Netherlands, Italy, and Belgium. For example, Datamaran Ltd partnered with Deloitte to assist businesses in Italy, the Netherlands, and Belgium in evaluating sustainability risks and meeting regulatory requirements using Datamaran's double-materiality analysis software. This partnership underscores the rising demand for sophisticated sustainability solutions, driven by legal frameworks such as the CSRD, which mandates the inclusion of ESG factors in corporate strategies.
Company Profiles
Key players in the Europe investor ESG software market include MSCI Inc, Workiva, Inc., London Stock Exchange Group Plc, Cority Software Inc, SAP SE, Sphera Solutions, Inc., FactSet Research Systems Inc, Morningstar Inc, Bloomberg LP, and Prophix Software Inc. These companies are employing various strategies, including expansion, product innovation, and mergers and acquisitions, to enhance their offerings and increase market share.
Executive Summary and Market Analysis
European investors are increasingly prioritizing Environmental, Social, and Governance (ESG) factors in their investment decisions, driven by the urgent need to tackle climate change, governance challenges, and social inequalities. A recent survey conducted by Deutsche Bank AG, which spanned key European markets from April to June 2023, highlighted this trend. Germany had the highest response rate, followed by Belgium, Italy, and Spain, indicating a robust engagement with ESG and sustainable investing topics. This growing focus on sustainability is reflected in the rising demand for ESG software, which enables investors to seamlessly integrate ESG principles into their investment portfolios.
ESG software solutions assist investors in evaluating risks and opportunities while ensuring alignment with sustainability objectives. Comprehensive ESG solutions enhance transparency in operations and support the achievement of sustainability goals, prompting software development companies to innovate their offerings. For example, in September 2023, Thomson Reuters announced a strategic partnership with SAP SE to enhance ESG reporting capabilities. This collaboration aims to integrate Thomson Reuters ONESOURCE Statutory Reporting with SAP Sustainability Control Tower, allowing users to manage and report ESG data from a unified platform. This integration is particularly timely as businesses operating within the EU will need to comply with the Corporate Sustainability Reporting Directive (CSRD) starting January 2025, with the directive's scope expected to expand in the coming years.
Market Segmentation Analysis
The Europe investor ESG software market can be segmented based on components and enterprise size. The component segment is divided into software and services, with the software segment holding a larger market share in 2024. The services segment includes training, integration, and other related services. Additionally, the market is categorized by enterprise size into large enterprises and small to medium-sized enterprises (SMEs), with large enterprises dominating the market in 2024.
Market Outlook
The focus on innovation within the ESG software sector is anticipated to create numerous growth opportunities during the forecast period. As the demand for transparent, accurate, and actionable ESG data escalates, investors are increasingly turning to advanced ESG software solutions to inform their investment strategies. The evolving landscape of ESG factors necessitates that investors have access to comprehensive, real-time insights, which can only be delivered through innovative software tools.
Recent advancements in ESG software include the integration of cutting-edge technologies such as artificial intelligence (AI). For instance, in December 2024, Microsoft launched a suite of AI-powered tools designed to streamline ESG data management, reporting, and analysis. These tools simplify the complex processes involved in gathering and organizing ESG information, enabling companies to meet reporting requirements efficiently while gaining actionable insights into their sustainability efforts. By leveraging AI, Microsoft enhances operational efficiency, improves the accuracy of ESG reporting, and helps organizations identify trends and areas for improvement.
Similarly, in November 2024, Mitratech introduced new AI-driven features in its third-party risk management platform, Prevalent. These enhancements aim to improve the identification, assessment, monitoring, and management of risks associated with third-party vendors, suppliers, and partners, thereby strengthening compliance with ESG factors throughout the third-party lifecycle. In April 2024, ESGgo launched its One-Click Sustainability Report, an AI-powered tool that simplifies the generation of sustainability reports in line with regulatory frameworks and stakeholder expectations. This tool processes both numerical and text-based data to create customized sustainability reports, allowing investors to monitor a company's sustainability performance and predict future ESG risks and opportunities based on real-time data.
Country Insights
The Europe investor ESG software market includes key countries such as Germany, France, the UK, Italy, Russia, and others in the Rest of Europe. The Rest of Europe accounted for the largest market share in 2024, with countries like Sweden, Poland, the Netherlands, Spain, Belgium, and Greece contributing significantly. The market in this region is expected to grow due to collaborations and partnerships among market players, alongside an increasing focus on sustainability compliance in countries like the Netherlands, Italy, and Belgium. For example, Datamaran Ltd partnered with Deloitte to assist businesses in Italy, the Netherlands, and Belgium in evaluating sustainability risks and meeting regulatory requirements using Datamaran's double-materiality analysis software. This partnership underscores the rising demand for sophisticated sustainability solutions, driven by legal frameworks such as the CSRD, which mandates the inclusion of ESG factors in corporate strategies.
Company Profiles
Key players in the Europe investor ESG software market include MSCI Inc, Workiva, Inc., London Stock Exchange Group Plc, Cority Software Inc, SAP SE, Sphera Solutions, Inc., FactSet Research Systems Inc, Morningstar Inc, Bloomberg LP, and Prophix Software Inc. These companies are employing various strategies, including expansion, product innovation, and mergers and acquisitions, to enhance their offerings and increase market share.
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