Enterprises are working with an expanding
set of providers to measure and improve their sustainability
and ESG performance, ISG Provider Lens™ report says
U.S. enterprise investments in sustainability and other ESG
initiatives are likely to expand significantly in the next several
years as companies are under growing pressure to measure and
improve their ESG performance, according to a new research report
published today by Information Services Group (ISG) (Nasdaq: III),
a leading global technology research and advisory firm.
The 2023 ISG Provider Lens™ Sustainability and ESG
(Environmental, Social, Governance) report for the U.S. finds
demand for sustainability and ESG services is lower in the U.S.
than in Europe but is being driven by many of the same factors,
including geopolitics, investor preferences and consumer buying
behavior. Enterprises in all regions face risks that include
impending regulations, loss of reputation, higher capital costs and
damage to assets caused by extreme weather.
“U.S. companies know they need to improve their sustainability
and ESG performance but face increasing complexity at every turn,”
said Andy Miears, director, adaptive organization, with ISG.
“Providers offer services to help clients navigate every stage of
the process.”
Successful sustainability and ESG projects can deliver not just
compliance with regulations and standards but significant business
benefits, including lower costs, higher margins, increased revenue
and incremental brand value, the report says.
The global market for sustainability and ESG services is likely
to double from 2022 to 2030, ISG says. In the U.S., impending
federal and state laws may force companies to disclose hundreds of
data points related to climate-related risks, emissions and
decarbonization.
“New regulations will significantly increase the data collection
and reporting burden on U.S. companies, driving demand for services
to help them comply,” said Jan Erik Aase, partner and global
leader, ISG Provider Lens Research. “Many firms today store this
data in disparate systems or do not record it at all.”
Investors and financial services companies have recognized the
link between mitigating ESG risk and increasing market value, which
has helped to drive demand for ESG services, the report says.
However, legal challenges against financial firms using ESG
principles to choose investments may dampen growth in the U.S.
With more regulatory bodies worldwide requiring enterprises to
disclose and improve their ESG performance, it is becoming harder
for companies to identify and obtain the necessary ratings and
benchmarks, ISG says. While traditional evaluations have focused on
environmental performance, many are adding social and governance
factors. Rating and benchmarking services, provided on a global
basis, are rapidly expanding to address these challenges.
The report also explores other ESG trends, including the use of
digital twins to simulate sustainability initiatives and the
pivotal role of AI in distinguishing between useful and extraneous
information.
For more insights into the ESG challenges facing U.S.
enterprises, including how to determine which reporting standards
to comply with, and advice for meeting those challenges, see the
ISG Provider Lens™ Focal Points briefing here.
The 2023 ISG Provider Lens™ Sustainability and ESG
(Environmental, Social, Governance) report for the U.S. evaluates
the capabilities of 103 providers across five quadrants: Strategy
and Enablement Services, Technology Solutions and Implementation
Services — IT, Technology Solutions and Implementation Services —
OT, Data Platforms and Managed Services and Rating and Benchmarking
Services.
The report names Accenture, Cognizant, HCLTech, IBM, Infosys,
TCS and Wipro as Leaders in four quadrants each. It names
Capgemini, Deloitte, EY, PwC and SAP as Leaders in three quadrants
each. CGI, EcoVadis, KPMG, LTIMindtree and Siemens are named as
Leaders in two quadrants each. Bain & Company, BCG, Bloomberg,
CDP, Cority, ERM, ESG Book, FactSet, ISS ESG, Moody’s ESG, MSCI,
LSEG Data & Analytics, S&P Global, Sustainalytics,
VelocityEHS and Wolters Kluwer are named as Leaders in one quadrant
each.
In addition, Hitachi Digital Services is named as a Rising Star
— a company with a “promising portfolio” and “high future
potential” by ISG’s definition — in two quadrants. RepRisk,
Schneider Electric and Sphera and are named as Rising Stars in one
quadrant each.
A customized version of the report is available from
HCLTech.
The 2023 ISG Provider Lens™ Sustainability and ESG
(Environmental, Social, Governance) report for the U.S. is
available to subscribers or for one-time purchase on this
webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only
service provider evaluation of its kind to combine empirical,
data-driven research and market analysis with the real-world
experience and observations of ISG's global advisory team.
Enterprises will find a wealth of detailed data and market analysis
to help guide their selection of appropriate sourcing partners,
while ISG advisors use the reports to validate their own market
knowledge and make recommendations to ISG's enterprise clients. The
research currently covers providers offering their services
globally, across Europe, as well as in the U.S., Canada, Brazil,
the U.K., France, Benelux, Germany, Switzerland, the Nordics,
Australia and Singapore/Malaysia, with additional markets to be
added in the future. For more information about ISG Provider Lens
research, please visit this webpage.
A companion research series, the ISG Provider Lens Archetype
reports, offer a first-of-its-kind evaluation of providers from the
perspective of specific buyer types.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading
global technology research and advisory firm. A trusted business
partner to more than 900 clients, including more than 75 of the
world’s top 100 enterprises, ISG is committed to helping
corporations, public sector organizations, and service and
technology providers achieve operational excellence and faster
growth. The firm specializes in digital transformation services,
including automation, cloud and data analytics; sourcing advisory;
managed governance and risk services; network carrier services;
strategy and operations design; change management; market
intelligence and technology research and analysis. Founded in 2006,
and based in Stamford, Conn., ISG employs more than 1,600
digital-ready professionals operating in more than 20 countries—a
global team known for its innovative thinking, market influence,
deep industry and technology expertise, and world-class research
and analytical capabilities based on the industry’s most
comprehensive marketplace data. For more information, visit
www.isg-one.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20240212940090/en/
Will Thoretz, ISG +1 203 517 3119 will.thoretz@isg-one.com
Julianna Sheridan, Matter Communications for ISG +1 978-518-4520
isg@matternow.com
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