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Industry Landscape
The ESG technology market is rapidly expanding, driven by increasing regulatory pressures (e.g., CSRD), investor demand for transparent social and environmental performance, and corporate commitments to sustainability. Companies are seeking data-driven solutions to measure, manage, and report their ESG initiatives, particularly in complex areas like human capital and supply chains. Automation and AI are becoming crucial for efficient data collection and analysis.
Total Assets Under Management (AUM)
ESG Software Market Size in United States
~3.2 billion USD (2023)
(22.5% CAGR)
This growth is fueled by:
- Regulatory compliance demands.
- Growing investor and consumer pressure.
- Increased corporate focus on sustainability.
Total Addressable Market
5.6 billion USD
Market Growth Stage
Pace of Market Growth
Emerging Technologies
Generative AI for ESG Data Analysis
Generative AI can automate the collection, standardization, and initial analysis of vast, unstructured ESG data from diverse sources, creating actionable insights and reports.
Blockchain for Supply Chain Traceability
Blockchain technology can provide immutable and transparent records of supply chain activities, enhancing the verifiability of social and environmental claims within global networks.
Impact Tokenization and Web3
Utilizing blockchain for tokenizing social and environmental impacts allows for direct, verifiable investment and trading in positive outcomes, fostering new financing models for sustainability.
Impactful Policy Frameworks
Corporate Sustainability Reporting Directive (CSRD) - EU (Effective 2024)
The CSRD requires large companies operating in the EU to report on their sustainability impacts and efforts in line with European Sustainability Reporting Standards (ESRS).
This significantly increases the demand for comprehensive and auditable ESG data, particularly for the 'S' (Social) aspect, pushing companies to adopt solutions like Lunum to meet compliance.
SEC Climate-Related Disclosure Rule - US (Proposed, expected 2024)
The proposed rule by the U.S. Securities and Exchange Commission (SEC) mandates publicly traded companies to disclose extensive climate-related information, including Scope 1, 2, and potentially Scope 3 emissions, and climate-related risks and opportunities.
While primarily climate-focused, this rule sets a precedent for increased mandatory ESG disclosure in the US, potentially extending to social metrics and pressuring companies to adopt robust ESG data management systems.
California Climate Disclosure Laws (SB 253 & SB 261) - US (Signed 2023)
California's new laws mandate public and private companies doing business in the state to disclose greenhouse gas emissions across all scopes (SB 253) and climate-related financial risks (SB 261).
These state-level mandates in a major US economy create immediate pressure for detailed emissions and risk reporting, driving demand for ESG data solutions and setting a potential trend for other states or federal action.
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