As the sustainability software market is set to soar from $1.7 billion in 2023 to $7.7 billion in 2029, supply chain leaders grapple with a fragmented and opaque market. The introduction of the European Union’s Corporate Sustainability Reporting Directive (CSRD) is driving demand, but finding the right software solution is a challenge.
The Rise of Sustainability Software
The global supply chain sustainability software market is on a rapid growth trajectory, projected to reach $7.7 billion by 2029, up from $1.7 billion in 2023, according to UK analysts Verdantix. This burgeoning market, however, is currently highly opaque, posing challenges for companies seeking specific software solutions to comply with mandatory European CSRD requirements. To aid companies in identifying suitable European software vendors, Supply Chain Media has released the first version of the ESG IT Subway Map Europe.
The demand for sustainability software is escalating swiftly in Europe, spurred by the implementation of the European Union’s Corporate Sustainability Reporting Directive (CSRD). This new directive mandates an estimated 55,000 companies in Europe to publish comprehensive, standardized reports on their sustainability performance from this year onwards. Initially, it appeared that only large European publicly listed companies would be subject to such reporting requirements. However, unlisted companies and SMEs that directly or indirectly supply these multinationals will also be impacted by the administrative CSRD obligations.
Navigating a Fragmented Market
With stricter regulations in place, companies are required to gather detailed and accurate data on their environmental, social, and governance (ESG) impact. This necessitates specific ESG software solutions that enable companies to process, analyze, and report based on large volumes of data. As ESG encompasses a wide range of activities, software solutions differ significantly in terms of focus and functionality. As a result, the ESG software vendor market is fragmented and crowded.
Unlike the supply chain software market, which has clearly distinguishable types such as WMS, TMS, S&OP, and ERP, there is currently no accepted categorization for ESG software.
The ESG IT Subway Map 2024: A Practical Guide
To offer a practical overview of relevant software vendors, Supply Chain Media has developed the ESG IT Subway Map Europe. Similar to the globally recognized SCM IT Subway Map, this visual resource illustrates various underground lines, each representing vendors of a particular type of software. The ESG Subway Map is based on the vendor’s country of origin, in Western Europe.
