Opaque sustainability software market causes confusion

The global supply chain sustainability software market will grow from US$1.7 billion in 2023 to US$7.7 billion in 2029, according to UK analysts Verdantix. This fast-growing software market is currently hugely opaque, causing problems for companies that need to look for a specific software solution due to mandatory European CSRD requirements. Supply Chain Media has published the first version of the ESG IT Subway Map Europe to help companies discern the right European software vendors.

Demand for sustainability software appears to be growing rapidly in Europe, driven by the introduction of the European Union’s Corporate Sustainability Reporting Directive (CSRD). This new directive will require an estimated 55,000 companies in Europe to publish comprehensive and standardized reports on their sustainability performance from this year on. Earlier, it seemed that only large European publicly listed companies would be subject to such reporting requirements. But unlisted companies and SMEs that directly or indirectly supply those multinationals will also be affected by the administrative CSRD obligations.

Fragmented market

Due to stricter regulations, companies need to collect detailed and accurate data on their environmental, social and governance (ESG) impact. This calls for specific ESG software solutions that allow companies to process, analyse and report based on the large amounts of data. As ESG covers a broad field of activities, software solutions vary considerably in terms of focus and functionality. Consequently, the ESG software vendor market is quite fragmented and crowded.

Unlike the supply chain software market, with clearly distinguishable types such as WMS, TMS, S&OP and ERP, there is currently also no accepted designation of different categories for ESG software.

Download the ESG IT Subway Map 2024

To provide a practical overview of relevant software vendors, Supply Chain Media has developed the ESG IT Subway Map Europe. Like the globally known SCM IT Subway Map, this visual resource depicts various underground lines, each showing vendors of a particular type of software. The ESG Subway Map is based on the vendor’s country of origin, in Western Europe.