IDC: Worldwide Spending on ESG Business Services Is Forecast to Reach $158 Billion in 2025
June 10, 2022 | IDCEstimated reading time: 2 minutes
Organizations face mounting pressures to improve and document their environmental, social, and governance (ESG) performance. Because the initial steps to a sustainable transformation can be daunting to firms that have not attempted anything similar in the past, sustainability-linked consulting spending has become a high priority. A new forecast from International Data Corporation (IDC) estimates that ESG business services spending will grow to $158 billion in 2025 with a five-year compound annual growth rate (CAGR) of 32.3%.
"In 2022, all enterprises are being pushed to transform and fundamentally change the way they do business to become sustainable enterprises," said Dan Versace, research analyst, ESG Business Services. "Owing to increased pressure from customers, investors, and regulators, organizations are beginning to understand the business cases for sustainability. Those organizations that develop and implement plans to better internalize and address their environmental and social impact stand to thrive in the years ahead as leaders in the sustainability space."
IDC defines environmental, social, and governance (ESG) business services as traditional professional services that are centered around achieving goals related to environmental and social sustainability and the governance of that process. It can also include ESG-enabling services, known as sustainability-linked professional services, that enable organizations to increase their sustainability capabilities through traditional business process improvement, such as services focused on increasing process efficiency or supply chain services to reduce risk.
The main focus areas for organizations' investment in sustainability are business strategy, human capital management solutions, and risk management. The largest area of spending, strategy consulting, will enable organizations to efficiently embed sustainability into their business strategy, which is the driving force of corporate purpose and in turn sustainable operations. Human capital management will be the fastest-growing area of spending. This is primarily due to the dual challenge of creating large-scale organization-wide training and process efficiency improvements necessary for sustainability efforts to succeed in the future, on top of addressing social pillar topics such as human capital management internally.
The increased spending across functions is forcing organizations to address corporate sustainability in a holistic way, moving away from the ad hoc approach that was present in years past. This imperative to act sustainably in all facets of an organization is becoming more powerful as mandated sustainability disclosures draw nearer. While many organizations are already reporting on their climate-related performance voluntarily (scope 1 and 2 emissions, carbon intensity, etc.), professional services will still be needed to increase the process efficiency as more resource-intensive reporting becomes mandatory. In addition to the recognition of the inherent link between social and environmental sustainability beginning to be understood on the corporate level, more nuanced and pointed services will be needed to address the societal impact of enterprises' operations in the future.
"By the end of the forecast period, IDC expects sustainability-linked business consulting services to encompass nearly two thirds of the total business services market," added Versace. "With this market being still in its infancy, opportunities for differentiation are everywhere. Firms should assess their sustainability-linked business services to determine where these offerings can best be utilized and identify other end-user pain points where new offerings will be needed."
Suggested Items
Koh Young Showcases Award-winning Inspection Solutions at SMTconnect with SmartRep in Hall 4A.225
04/25/2024 | Koh Young TechnologyKoh Young Technology, the industry leader in True 3D measurement-based inspection solutions, will showcase an array of award-winning inspection and measurement solutions at SMTconnect alongside its sales partner, SmartRep, in booth 4A.225 at NürnbergMesse from June 11-13, 2023. The following offers a glimpse into what Koh Young will present at the tradeshow:
Real Time with… IPC APEX EXPO 2024: Plasmatreat: Innovative Surface Preparation Solutions
04/25/2024 | Real Time with...IPC APEX EXPOIn this interview, Editor Nolan Johnson speaks with Hardev Grewal, CEO and president of Plasmatreat, a developer of atmospheric plasma solutions. Plasmatreat uses clean compressed air and electricity to create plasma, offering environmentally friendly methods for surface preparation. Their technology measures plasma density for process optimization and can remove organic micro-contamination. Nolan and Hardev also discuss REDOX-Tool, a new technology for removing metal oxides.
KYZEN to Promote Pair of Stencil Cleaning Chemistries at SMTA Ciudad Jaurez Expo & Tech Forum
04/25/2024 | KYZEN'KYZEN, the global leader in innovative environmentally friendly cleaning chemistries, will exhibit at the SMTA Ciudad Juarez Expo & Tech Forum, scheduled to take place Thursday, May 9, 2024 at the Injectronic Convention Center in Ciudad Jaurez, Chihuahua, Mexico. During the event the KYZEN Clean Team will focus on understencil cleaning products KYZEN E5631J and CYBERSOLV C8882.
Cadence, TSMC Collaborate on Wide-Ranging Innovations to Transform System and Semiconductor Design
04/25/2024 | Cadence Design SystemsCadence Design Systems, Inc. and TSMC have extended their longstanding collaboration by announcing a broad range of innovative technology advancements to accelerate design, including developments ranging from 3D-IC and advanced process nodes to design IP and photonics.
Listen Up! The Intricacies of PCB Drilling Detailed in New Podcast Episode
04/25/2024 | I-Connect007In episode 5 of the podcast series, On the Line With: Designing for Reality, Nolan Johnson and Matt Stevenson continue down the manufacturing process, this time focusing on the post-lamination drilling process for PCBs. Matt and Nolan delve into the intricacies of the PCB drilling process, highlighting the importance of hole quality, drill parameters, and design optimization to ensure smooth manufacturing. The conversation covers topics such as drill bit sizes, aspect ratios, vias, challenges in drilling, and ways to enhance efficiency in the drilling department.