ESG Rating Service Market Research Report By Service Type (Research and Analysis, Consulting Services, Rating Methodologies, Data Management Services, Integrated Solutions), By End User (Corporates, Financial Institutions, Government Agencies, Non-Governmental Organizations), By Application (Investment Decisions, Corporate Reporting, Risk Management, Benchmarking), By Business Model (Subscription-Based, One-Time Fee, Freemium, Consultative) and By Regional (North America, Europe, South America, Asia Pacific, Middle East and Africa) - Foreca

ESG Rating Service Market Overview:

ESG Rating Service Market Size was estimated at 2.78 (USD Billion) in 2023. The ESG Rating Service Market Industry is expected to grow from 3.02(USD Billion) in 2024 to 7.5 (USD Billion) by 2035. The ESG Rating Service Market CAGR (growth rate) is expected to be around 8.61% during the forecast period (2025 - 2035).

Key ESG Rating Service Market Trends Highlighted

The ESG Rating Service Market is influenced by several key drivers that emphasize the rising importance of environmental, social, and governance factors in investment decisions. Growing awareness among investors about sustainable practices and transparency has led to an increased demand for robust ESG ratings. Companies are increasingly recognizing that strong ESG performance can enhance their competitive edge, attract capital, and mitigate risks. Regulatory frameworks are also evolving, requiring organizations to disclose their ESG practices more comprehensively, thereby increasing the relevance of ESG ratings in the financial sector. There are significant opportunities to be explored in this market, particularly for service providers that can develop more sophisticated and comprehensive rating methodologies.The use of AI and big data analytics together is likely to provide richer information on ESG performance, which is beneficial for investors. In addition, as particular industries have their own ESG concerns, it is possible that some rating firms that focus on specific sectors will be established as solutions. Firms with the capacity to create and provide such bespoke services are likely to take advantage of business opportunities. New trends are towards the adoption of more uniform ESG rating systems that will establish comparability and reliability. Stakeholder’s concerns are on increased consistency in the ways these ratings are produced, thus contributing to more symmetrically diversified methodologies within the industry.

Moreover, the growing interest in impact investing and sustainable finance is shaping how ESG ratings are perceived. As companies increasingly focus on long-term sustainability goals, integrating ESG factors into corporate strategies is becoming a fundamental part of business planning. This alignment between corporate objectives and ESG considerations is likely to drive the market further, reinforcing the relevance of ESG ratings in global financial markets.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

ESG Rating Service Market Drivers

Growing Investor Demand for ESG Ratings

In recent years, there has been a significant shift in the investment landscape, with an increasing number of investors prioritizing Environmental, Social, and Governance (ESG) factors when making investment decisions. This growing demand for ESG ratings can be attributed to a variety of factors, including the rising awareness of sustainability issues and the recognition of their impact on financial performance. Investors are now more inclined to consider ESG ratings as a crucial metric in assessing the long-term viability of companies.The ESG Rating Service Market Industry is increasingly responding to this trend by offering comprehensive assessment tools that provide insights into how companies navigate ESG challenges. As the market valuation continues to expand, ESG ratings are becoming essential for attracting investment, as they align with the values of socially conscious investors. Institutions and funds are now more likely to invest in companies with strong ESG practices, thereby influencing corporate behavior and encouraging more companies to improve their ratings.Moreover, this trend is set to accelerate as more regulations surface around sustainable investing. Consequently, the ESG Rating Service Market is poised for significant growth as it adapts to meet these new demands and offers enhanced transparency, facilitating informed investment decisions across various sectors.

Regulatory and Policy Support

The role of government regulations and policies in shaping the ESG Rating Service Market Industry cannot be underestimated. With more countries acknowledging the importance of sustainable business practices, various regulatory frameworks are being introduced to promote ESG compliance. These regulations often require companies to disclose their ESG practices and performance, thereby increasing the necessity for credible ESG ratings. As compliance becomes a requirement, the demand for reliable rating services increases, leading to market expansion.Moreover, regulatory bodies are increasingly recognizing the need for standardized ESG metrics, further driving the growth of the ESG Rating Service Market.

Increased Corporate Focus on Sustainability

Across various sectors, companies are increasingly recognizing the importance of sustainability as a core business strategy. This shift is driven by a growing public demand for transparency and accountability regarding environmental, social, and governance practices. As corporations strive to improve their ESG performance and align with global sustainability targets, the necessity for robust ESG rating systems becomes evident. The ESG Rating Service Market Industry is witnessing a surge in demand from businesses seeking to enhance their sustainability profiles, thus ensuring their long-term relevance and competitiveness in the market.Companies are actively seeking ESG ratings not only for compliance but also as a strategic tool for brand enhancement and stakeholder engagement.

ESG Rating Service Market Segment Insights:

ESG Rating Service Market Service Type Insights

The ESG Rating Service Market revenue has shown substantial growth potential, with a projected valuation reaching 3.02 USD Billion by 2024 and 7.5 USD Billion by 2035. This market segmentation focuses on various service types that contribute to the overall market ecosystem. The majority holding of the market is attributed to Research and Analysis services, which was valued at 0.75 USD Billion in 2024 and is expected to grow to 1.9 USD Billion in 2035. This segment benefits from the increasing need for companies to understand their performance in environmental, social, and governance arenas, making it a significant component for businesses aiming for sustainability and transparency. Consulting Services also plays an essential role, valued at 1.0 USD Billion in 2024, poised to escalate to 2.5 USD Billion by 2035. This growth indicates that organizations increasingly require expert advice to navigate the complexities of ESG frameworks and regulations, enhancing their operational efficiencies and compliance. Rating Methodologies, while smaller in size at 0.6 USD Billion in 2024 and anticipated to reach 1.5 USD Billion by 2035, reflect the stringent evaluation processes that are gaining traction among investors and stakeholders looking for reliable ESG metrics to assess risk and investment opportunities. Data Management Services, valued at 0.52 USD Billion in 2024 and expected to grow to 1.3 USD Billion in 2035, underscores the necessity of robust data systems to handle vast amounts of ESG-related data, catering to businesses that prioritize data integrity and transparency in their reporting mechanisms. Meanwhile, Integrated Solutions, though representing a more nascent aspect of the market with a valuation of 0.15 USD Billion in 2024 and 0.35 USD Billion by 2035, emphasizes the trend towards holistic service offerings that combine multiple aspects of ESG services to create streamlined and comprehensive solutions for clients. This service type reflects how organizations seek improved synergy in managing their ESG commitments, highlighting a significant opportunity for growth in the market. Overall, the ESG Rating Service Market segmentation indicates a diverse landscape of services, each playing a vital role in shaping a company’s ESG strategies, and this is fortified by ongoing trends towards sustainability, transparency, and regulatory compliance across industries. The market statistics indicate a robust demand for all these service types, each addressing unique needs and challenges faced by organizations as they navigate the complexities of ESG initiatives.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

ESG Rating Service Market End User Insights

The End User segment of the ESG Rating Service Market plays a crucial role in shaping overall market dynamics. By 2024, this segment is expected to contribute significantly to the overall value of the market, which is projected to be 3.02 billion USD. Corporates are integral to this segment as they increasingly seek ESG ratings to enhance their sustainability profiles and attract socially responsible investments. Financial Institutions also play a critical role as they incorporate ESG metrics into their lending and investment strategies to mitigate risk and meet regulatory requirements. Government Agencies utilize ESG ratings for policy-making and public accountability, making their presence in the market significant. Non-Governmental Organizations leverage these ratings to hold both public and private sectors accountable for their impact on society and the environment. Each of these sectors not only drives demand for ESG ratings but also contributes to the overall growth of the ESG Rating Service Market, presenting both challenges and opportunities for service providers to innovate and cater to diverse needs within this landscape.

ESG Rating Service Market Application Insights

The ESG Rating Service Market, particularly within the Application segment, showcases a promising growth trajectory, with a market valuation of 3.02 billion USD expected in 2024. Key areas within this segment include Investment Decisions, Corporate Reporting, Risk Management, and Benchmarking. Investment Decisions are increasingly informed by ESG ratings, emphasizing the importance of sustainable investing as more investors seek to align their portfolios with ethical standards. Corporate Reporting relies on ESG ratings to enhance transparency, helping businesses showcase their sustainability initiatives and attracting conscious consumers. Risk Management has gained traction as organizations utilize ESG ratings to identify potential risks tied to environmental and social factors. Benchmarking stands out as a critical tool that enables companies to assess their performance against industry peers, fostering competition and driving improvements. Overall, the dynamics within the ESG Rating Service Market segmentation reflect a growing commitment to sustainability across various sectors, leading to increased demand for reliable ESG ratings.

ESG Rating Service Market Business Model Insights

The ESG Rating Service Market, valued at 3.02 USD Billion in 2024, is witnessing dynamic transformations driven by various business models. A significant portion of this market is driven by the Subscription-Based model, which fosters long-term client relationships and ensures consistent revenue streams. Conversely, the One-Time Fee model caters to clients preferring immediate access to services without long commitments, appealing to one-off projects. The Freemium model plays a crucial role in attracting users by offering basic services at no charge encouraging upgrades to premium features. Lastly, the Consultative model emphasizes personalized insights, aligning with corporate sustainability goals, thus enhancing the overall value of ESG services. This diverse array of business strategies reflects the growing importance of ESG compliance as organizations increasingly prioritize sustainable practices. Insights into the ESG Rating Service Market revenue and segmentation show that the evolution of these models is essential in addressing the varying needs of clients and adapting to market trends. As environmental, social, and governance issues gain traction, the demand for effective rating services is expected to rise, providing ample growth opportunities within this segment.

ESG Rating Service Market Regional Insights

The ESG Rating Service Market shows a robust regional segmentation, with significant growth expected across various areas. In 2024, North America is valued at 1.25 USD Billion, reflecting a substantial share, and is projected to reach 3.1 USD Billion in 2035, indicating its dominance in the market. Europe follows closely, with a valuation of 0.9 USD Billion in 2024 and an expected rise to 2.3 USD Billion by 2035, highlighting its growing importance in ESG practices. The APAC region, valued at 0.58 USD Billion in 2024, is projected to grow to 1.5 USD Billion, driven by increasing environmental regulations and corporate sustainability trends.In comparison, South America and MEA are smaller markets, with valuations of 0.15 USD Billion and 0.14 USD Billion in 2024, respectively, expected to grow to 0.4 USD Billion and 0.3 USD Billion, reflecting budding interest in ESG ratings. The majority holding in the ESG Rating Service Market is attributed to North America, which plays a critical role in shaping ESG standards, while Europe presents significant opportunities due to its stringent regulations regarding sustainability practices. Overall, the growth trends demonstrate a steady increase in global awareness and demand for effective ESG evaluation frameworks.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

ESG Rating Service Market Key Players and Competitive Insights:

The ESG Rating Service Market has emerged as a critical segment within the finance and investment industry, driven by increasing awareness of environmental, social, and governance issues among consumers and investors alike. This market plays a pivotal role in assessing the sustainability and ethical impacts of corporations around the world, providing crucial insights that shape investment decisions. Competitive dynamics within this market are largely influenced by the demand for transparency and accountability related to ESG criteria. Various players offer diversified services such as rating assessments, analytical tools, and report generation, contributing to an evolving competitive landscape. Companies in the sector continually adapt their methodologies and technologies to enhance their offerings, enabling investors to make informed choices while promoting responsible investing.RepRisk holds a significant position within the ESG Rating Service Market, recognized for its comprehensive data analytics and risk assessment capabilities. Its robust platform stands out due to its focus on identifying and analyzing ESG risks sourced from various media, stakeholder opinions, and other data points. This capability not only strengthens its market presence but also aligns with the increasing demand for reliable data in responsible investing. The firm's unique approach to monitoring and reporting ESG-related risks equips investors with actionable insights, facilitating improved decision-making. By leveraging advanced technology and a thorough understanding of market dynamics, RepRisk continues to enhance its value proposition, catering to the evolving needs of its diverse clientele.MSCI is regarded as a leading entity within the ESG Rating Service Market, known for its extensive research and analytical framework that evaluates the ESG performance of corporations across various sectors. The company's strength lies in its comprehensive ratings systems, which are built on rigorous standards and methodologies that integrate data from multiple sources, thus providing a holistic view of a company’s sustainability practices. MSCI is influential in shaping investment strategies as its ratings are often utilized by institutional investors to guide their portfolios toward more sustainable asset allocations. Additionally, MSCI continually invests in technology and innovation to refine its analytics, which helps maintain its competitive edge in a crowded market. By focusing on enhancing the transparency and reliability of ESG data, MSCI underscores its commitment to promoting sustainable investment practices globally.

Key Companies in the ESG Rating Service Market Include:

• RepRisk


• MSCI


• ISS ESG


• EcoVadis


• Moody's ESG Solutions


• Refinitiv


• CDP


• Sustainalytics


• S and P Global Ratings


• DJSI


• Arabesque SRay


• Bloomberg


• TruValue Labs


• Vigeo Eiris


• FTSE Russell

ESG Rating Service Market Industry Developments

The ESG Rating Service Market has witnessed several recent developments, particularly with an increasing emphasis on sustainability and responsible investing. Companies like MSCI, Sustainalytics, and Moody's ESG Solutions are expanding their offerings to meet the rising demand for comprehensive ESG data analytics. EcoVadis continues to enhance its assessment tools, focusing on supply chain sustainability evaluation, while Refinitiv is integrating more advanced technology into its ESG reporting services. In terms of mergers and acquisitions, MSCI recently announced acquiring a significant player to enhance its ESG capabilities, which indicates a trend of consolidation within the sector. Additionally, the market is seeing substantial growth in valuation, driven by heightened investor interest in ESG factors, with firms like S&P Global Ratings and DJSI strengthening their influences. The integration of ESG considerations into corporate strategies is becoming paramount, impacting how rating agencies operate, drive innovation, and improve transparency. Companies like TruValue Labs and Arabesque SRay are also contributing to the competitive landscape, producing cutting-edge analytics that address investor needs. Overall, the market is dynamically evolving, with strategic partnerships and heightened valuations reflecting the escalating importance of ESG criteria in investment decisions.

ESG Rating Service Market Segmentation Insights

ESG Rating Service Market Service Type Outlook

• Research and Analysis


• Consulting Services


• Rating Methodologies


• Data Management Services


• Integrated Solutions

ESG Rating Service Market End User Outlook

• Corporates


• Financial Institutions


• Government Agencies


• Non-Governmental Organizations

ESG Rating Service Market Application Outlook

• Investment Decisions


• Corporate Reporting


• Risk Management


• Benchmarking

ESG Rating Service Market Business Model Outlook

• Subscription-Based


• One-Time Fee


• Freemium


• Consultative

ESG Rating Service Market Regional Outlook

• North America


• Europe


• South America


• Asia Pacific


• Middle East and Africa