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- ESG demand will drive market to $2.7 billion by 2027
The environment, health and safety software market will continue to grow this year despite recession fears with an increased focus on proactive risk management helping support expansion, a new report from leading independent research and advisory firm Verdantix says.
Its Market Size and Forecast: EHS Software 2022 -2027 (Global) report forecasts the market will hit $1.57 billion this year and continue to expand at around 11.9% a year to reach $2.7 billion by 2027.
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Tougher ESG regulations will underpin increased long-term spending on commercial EHS software which plays a key role in providing investor grade data for companies and the sector is attracting private equity investment which is also helping to expand the EHS software market.
The market is also benefiting from increasing digitization in the aftermath of the COVID-19 pandemic as firms increasingly switch to proactive risk management strategies which require investment in connected software and technology workflows.
In addition, procurement teams are increasingly looking to consolidate EHS solutions into a single management platform with the aim of centralising ESG and EHS data with larger deals likely to further expand the market.
Chris Sayers, Industry Analyst at Verdantix said: “EHS software is steadfast and even through recessions there is a low removal or replacement risk. Notwithstanding the potential impact of economic uncertainty, EHS software spend will continue to increase in the long term, driven by heightened demand for environmental management and ESG functionality.
“EHS vendors are in a superb position to deliver on core ESG competencies. This signals the long-term growth opportunity available to a sector that has already leapt at the lucrative ESG market through brand repositioning, strategic acquisitions, and in-house product developments.”
The North American and European markets will continue to dominate the sector, Verdantix believes, as increasing adoption of EHS software by mid-market firms will drive growth.
