Latest News- AI In ESG And Sustainability Market: Cloud is expected to lead the Deployment segment during 2025-2029

The AI In ESG And Sustainability Market is being driven by Intensifying regulatory scrutiny and mandatory disclosure frameworks

The AI In ESG And Sustainability Market is expected to grow at a CAGR of 29.3% during 2024 and 2029. During this period, the market is also expected to show a growth of USD 3465.9 million. The global AI in Environmental, Social, and Governance (ESG) and sustainability market is witnessing a significant surge due to the increasing adoption of hyper-automation for data management. This shift signifies a progression from fundamental data gathering towards an advanced, AI-driven ecosystem for the collection, cleansing, validation, and reporting of ESG metrics. The primary catalyst for this trend is the growing intricacy and expansiveness of regulatory requirements worldwide. In Europe, the Corporate Sustainability Reporting Directive (CSRD) has instigated an urgent demand for reliable, auditable data trails, compelling numerous organizations to disclose comprehensive sustainability information. Concurrently, in North America, the Securities and Exchange Commission's (SEC) proposed climate disclosure rules, despite encountering legal challenges, represent a clear indication of a transition towards mandatory reporting. 

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Which Factors Are Causing a Surge in Market Growth?

The market is segmented based on

• Deployment
  • Cloud
  • On-premises
• End-user
  • Building and construction
  • Oil and gas
  • Agriculture
  • Food and beverage
  • Others
• Technology
  • Machine learning
  • Generative AI
  • Deep learning
  • Natural language processing (NLP)
  • Predictive analysis
• Geography
  • APAC
    • China
    • India
    • Japan
    • South Korea
  • North America
    • US
  • Europe
    • Germany
    • UK
    • France
  • Middle East and Africa
  • South America
    • Brazil

According to Technavio, There are several factors that are causing the market to flourish during the forecast period, which are as follows: 

• Intensifying regulatory scrutiny and mandatory disclosure frameworks
• Escalating investor and stakeholder demands for verifiable ESG performance
• Accelerated innovation in AI and data science unlocking new ESG capabilities

However, the market also witnesses some limitations, which are as follows:

• Pervasive issue of data quality, accessibility, and standardization
• Prohibitive implementation costs and ambiguous return on investment
• Navigating evolving regulatory landscapes and addressing AI ethical dilemmas

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Market Scope in AI In ESG And Sustainability Market Research Report

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Research Analysis Overview

AI plays a pivotal role in the sustainability market, offering solutions for ESG data visualization, sustainability reporting, and investment screening through carbon accounting software and ESG ratings. Environmental monitoring, social equity indicators, and governance compliance are enhanced with AI. Supply chain transparency, ESG due diligence, climate scenario analysis, and green finance initiatives are streamlined. Impact investing strategies, sustainability consulting, and performance benchmarking are optimized with AI-powered tools. Social responsibility programs, risk management frameworks, and ESG disclosure regulations are strengthened. Stakeholder capitalism is promoted through materiality matrix analysis and data-driven sustainability.

Market Research Overview

The global IT software market encompasses businesses specializing in application and system software development and production. This sector includes enterprises focusing on application software, which caters to industry-specific needs and consumer markets, comprising enterprise and technical software, as well as cloud-based solutions. Technavio estimates the IT software market size by aggregating the revenues of organizations delivering various software types, including cloud services. In the realm of sustainability, AI-driven ESG data management is a significant sub-segment, enabling carbon footprint reduction and optimizing sustainable supply chains.. Industries are leveraging the products belonging to the market for customer engagement, transactional notifications, and promotional offers.

Technavio Research
Jesse Maida
Media & Marketing Executive
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UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/