North America 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
Description
The North America investor ESG (Environmental, Social, and Governance) software market is projected to experience significant growth, reaching an estimated US$ 1,135.82 million by 2031, up from US$ 389.62 million in 2024. This growth represents a compound annual growth rate (CAGR) of 16.5% from 2024 to 2031.
Executive Summary and Market Analysis
The primary contributors to the North American investor ESG software market include the United States, Canada, and Mexico. According to the 15th edition of the US SIF Foundation's Report on US Sustainable Investing Trends, climate action has emerged as the foremost priority for sustainable investing, both in the short and long term. As of early 2024, sustainable investment assets under management (AUM) in the US totaled approximately US$ 6.5 trillion, accounting for 12% of all US assets managed professionally. The report highlights that addressing climate change and facilitating the transition to clean energy are critical objectives for businesses in the US. While 73% of respondents anticipate growth in the sustainable investment market over the next couple of years, only 39% expect their organizations to enhance their sustainable investment initiatives.
The trend towards sustainable investment is gaining momentum in the financial sector, as investors increasingly align their portfolios with ESG criteria. There is a growing emphasis on climate action, prompting investors to adopt solutions that support the transition to a low-carbon economy while aiming for long-term wealth generation and risk mitigation. ESG software plays a vital role in helping investors analyze and integrate climate-related risks, monitor sustainability key performance indicators (KPIs), and comply with evolving regulations.
In September 2023, AArete, a prominent global technology and management consulting firm, launched its AAchieve.ESG software. This innovative software leverages advanced AI technology to provide clients across various industries with rapid insights into Scope 1, 2, and 3 emissions, thereby streamlining sustainability impact reporting. The increasing focus on sustainability among investors and the demand for AI-driven software solutions are key factors driving the growth of the investor ESG software market in North America.
Strategic Insights and Market Segmentation
The North America investor ESG software market can be segmented based on components and enterprise size. The market is divided into software and services, with the software segment holding a larger market share in 2024. The services segment is further categorized into training, integration, and other services. Additionally, the market is segmented by enterprise size into large enterprises and small to medium-sized enterprises (SMEs), with large enterprises dominating the market share in 2024.
Market Outlook
The integration of generative AI into investor ESG software is anticipated to introduce new trends in the market in the coming years. Generative AI enables investors to access, analyze, and interpret ESG data more effectively. This technology is poised to enhance ESG data analysis, reporting, and decision-making processes significantly. One of the most notable advantages of incorporating generative AI into ESG software is its ability to automate the generation of complex ESG reports. By quickly analyzing extensive ESG data from diverse sources, generative AI can produce customized, insightful reports for investors, including standard metrics and predictive analyses that identify emerging risks, opportunities, or trends in ESG performance. This automation not only saves time but also ensures that reports are accurate and comprehensive.
The advancements brought about by generative AI in ESG software will lead to improved data accuracy, reporting efficiency, and predictive analytics. For instance, in July 2024, CO2 AI, a Paris-based sustainability platform, launched a generative AI-powered solution called Product Footprinting, designed to help companies calculate product carbon emissions and minimize their environmental impact. This solution addresses the need for precise and rapid product carbon footprinting, as highlighted by a study indicating that only 38% of companies receive adequate product-level data from suppliers. Similarly, in April 2024, Infor introduced Infor GenAI and ESG Reporting, aimed at enhancing productivity and tracking environmental impacts for its customers across various sectors.
Country Insights
The North America investor ESG software market is primarily composed of the US, Canada, and Mexico, with the US holding the largest market share in 2024. The US SIF Foundation reported that the market for sustainability- or ESG-related investments reached US$ 6.5 trillion by the end of 2024, based on public disclosures. The foundation represents investor members managing a collective US$ 5 trillion in assets. Numerous companies in the US are actively investing in ESG initiatives. For example, in November 2023, Nasdaq, Inc. launched the Nasdaq Sustainable Lens, an AI-driven software-as-a-service (SaaS) platform designed to help companies and investors navigate and utilize ESG data from thousands of organizations. This platform provides users with access to sustainability-related documents from over 9,000 companies, facilitating efficient summarization of ESG disclosures and enabling credible responses to stakeholder inquiries.
Company Profiles
Key players in the North America 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 deliver innovative products and enhance their market presence.
Executive Summary and Market Analysis
The primary contributors to the North American investor ESG software market include the United States, Canada, and Mexico. According to the 15th edition of the US SIF Foundation's Report on US Sustainable Investing Trends, climate action has emerged as the foremost priority for sustainable investing, both in the short and long term. As of early 2024, sustainable investment assets under management (AUM) in the US totaled approximately US$ 6.5 trillion, accounting for 12% of all US assets managed professionally. The report highlights that addressing climate change and facilitating the transition to clean energy are critical objectives for businesses in the US. While 73% of respondents anticipate growth in the sustainable investment market over the next couple of years, only 39% expect their organizations to enhance their sustainable investment initiatives.
The trend towards sustainable investment is gaining momentum in the financial sector, as investors increasingly align their portfolios with ESG criteria. There is a growing emphasis on climate action, prompting investors to adopt solutions that support the transition to a low-carbon economy while aiming for long-term wealth generation and risk mitigation. ESG software plays a vital role in helping investors analyze and integrate climate-related risks, monitor sustainability key performance indicators (KPIs), and comply with evolving regulations.
In September 2023, AArete, a prominent global technology and management consulting firm, launched its AAchieve.ESG software. This innovative software leverages advanced AI technology to provide clients across various industries with rapid insights into Scope 1, 2, and 3 emissions, thereby streamlining sustainability impact reporting. The increasing focus on sustainability among investors and the demand for AI-driven software solutions are key factors driving the growth of the investor ESG software market in North America.
Strategic Insights and Market Segmentation
The North America investor ESG software market can be segmented based on components and enterprise size. The market is divided into software and services, with the software segment holding a larger market share in 2024. The services segment is further categorized into training, integration, and other services. Additionally, the market is segmented by enterprise size into large enterprises and small to medium-sized enterprises (SMEs), with large enterprises dominating the market share in 2024.
Market Outlook
The integration of generative AI into investor ESG software is anticipated to introduce new trends in the market in the coming years. Generative AI enables investors to access, analyze, and interpret ESG data more effectively. This technology is poised to enhance ESG data analysis, reporting, and decision-making processes significantly. One of the most notable advantages of incorporating generative AI into ESG software is its ability to automate the generation of complex ESG reports. By quickly analyzing extensive ESG data from diverse sources, generative AI can produce customized, insightful reports for investors, including standard metrics and predictive analyses that identify emerging risks, opportunities, or trends in ESG performance. This automation not only saves time but also ensures that reports are accurate and comprehensive.
The advancements brought about by generative AI in ESG software will lead to improved data accuracy, reporting efficiency, and predictive analytics. For instance, in July 2024, CO2 AI, a Paris-based sustainability platform, launched a generative AI-powered solution called Product Footprinting, designed to help companies calculate product carbon emissions and minimize their environmental impact. This solution addresses the need for precise and rapid product carbon footprinting, as highlighted by a study indicating that only 38% of companies receive adequate product-level data from suppliers. Similarly, in April 2024, Infor introduced Infor GenAI and ESG Reporting, aimed at enhancing productivity and tracking environmental impacts for its customers across various sectors.
Country Insights
The North America investor ESG software market is primarily composed of the US, Canada, and Mexico, with the US holding the largest market share in 2024. The US SIF Foundation reported that the market for sustainability- or ESG-related investments reached US$ 6.5 trillion by the end of 2024, based on public disclosures. The foundation represents investor members managing a collective US$ 5 trillion in assets. Numerous companies in the US are actively investing in ESG initiatives. For example, in November 2023, Nasdaq, Inc. launched the Nasdaq Sustainable Lens, an AI-driven software-as-a-service (SaaS) platform designed to help companies and investors navigate and utilize ESG data from thousands of organizations. This platform provides users with access to sustainability-related documents from over 9,000 companies, facilitating efficient summarization of ESG disclosures and enabling credible responses to stakeholder inquiries.
Company Profiles
Key players in the North America 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 deliver innovative products and enhance their market presence.
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