AI in ESG & Sustainability Market is set to reach US$ 846.75 billion by 2032, at a CAGR of 21.16%, North America leads the market with 43.8% market share.

Global AI in ESG & Sustainability Market reached US$ 182.34 billion in 2024 and is expected to reach US$ 846.75 billion by 2032, growing with a CAGR of 21.16% during the forecast period 2025-2032, according to DataM Intelligence report.

The use of Artificial Intelligence (AI) into Environmental, Social and Governance (ESG) strategies is revolutionizing corporate approaches to sustainability and ethical practices. Generative AI empowers ESG teams to capitalize on extensive opportunities through the analysis of big datasets, the identification of performance risks and the provision of customized suggestions for target attainment. This system streamlines the intricate, data-centric procedure of ESG strategy formulation, objective establishment, implementation and reporting, as per our analysis.

DataM Intelligence unveils its latest report on the "AI in ESG & Sustainability Market size 2025," offering an in-depth analysis of market trends, growth drivers, competitive landscape, and regional dynamics. The study covers market size in value and volume, CAGR forecasts, and emerging opportunities that can guide businesses in seizing growth potential and crafting winning strategies. Packed with data-driven insights on current developments and future trends, this report is essential for companies aiming to stay ahead in the competitive Market.

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United States: Key Industry Developments ( 2025)

✅ September 2025: Watershed launched a new AI-driven Scope 3 emissions tool that automates measurement and reduction strategies for corporate supply chain carbon, addressing one of the most persistent sustainability reporting challenges.

✅ August 2025: Greenly introduced EcoPilot, an AI-powered real-time carbon accounting platform that automates emissions data collection, analysis, and sustainability reporting with machine learning and NLP support.

✅ April 2025: Zevero launched its AI-powered ESG Disclosure Reporting Tool, using intelligent extraction to accelerate ESG report drafting with high accuracy and multilingual capabilities, significantly reducing reporting time.

✅ June 2025: Datamaran introduced an AI-enabled core ESG risk and compliance product, designed to help U.S. enterprises conduct materiality assessments, trend monitoring, and regulatory alignment more efficiently.

Japan: Key Industry Developments (2025)

✅ November 2025: Mitsui & Co. awarded a grant to support development of a world-standard AI ESG assessment model, enabling automated big-data processing and risk visualization for corporate ESG disclosures in line with global frameworks.

✅ July 2025: Zevero and aiESG announced a strategic partnership to deliver integrated AI-driven ESG risk analysis and carbon management solutions tailored for supply chains and sustainability reporting in Japan.

✅ March 2025: aiESG Inc. exhibited and showcased its AI-based ESG analysis solutions at the "International Conference on Sustainable Brands 2025" in Tokyo, highlighting practical ESG disclosure automation and supply-chain traceability capabilities.

📌 AI in ESG & Sustainability Market 2025-26 M&A Deals

→ In December 2025, Alphabet (Google's parent) announced it will acquire clean energy developer Intersect for $4.75 billion in cash plus assumed debt. The acquisition strengthens its energy and infrastructure capabilities to support artificial intelligence growth and future sustainable AI-driven computing capacity.

→ In October 2025, a consortium including BlackRock, Microsoft, and Nvidia agreed to acquire Aligned Data Centers in a deal valued at about $40 billion. While primarily an AI infrastructure deal, it has sustainability implications by expanding energy-efficient data capacity essential for AI and climate-focused computing workloads; the transaction is expected to close in the first half of 2026.

→ In September 2025, Green Project Technologies, an ACT Group company, acquired the AI- & ML-driven supply chain carbon accounting platform Emitwise (deal announced July 28, 2025). The acquisition enhances Green Project's ability to provide advanced AI-enabled Scope 3 emissions tracking and supplier engagement solutions. Financial terms were not publicly disclosed.

→ In August 2025, Behind Investments completed the full acquisition of Semantic Visions, a Czech AI-powered open-source data analytics firm specializing in ESG, risk monitoring, and trend detection. Pale Fire Capital exited its stake as Behind Investments took 100% ownership. Financial details were not disclosed.

→ In September 2025, Clarity AI and SESAMm announced a strategic partnership to expand AI-driven ESG controversy detection across private markets. This collaboration enhances AI-powered sustainability analytics for private company ESG risk monitoring (partnership rather than M&A).

AI in ESG & Sustainability Market Drivers:-
Corporate disclosure requirements around ESG are increasing globally. Regulations such as the EU's Corporate Sustainability Reporting Directive (CSRD) and strengthening U.S. SEC climate disclosure mandates are pushing companies to adopt automated solutions that can handle large volumes of sustainability data. AI tools are uniquely positioned to interpret, standardize, and validate ESG metrics at scale - a major reason adoption is accelerating.

Institutional investors increasingly demand quantifiable, transparent ESG performance before allocating capital - ESG metrics are now a major component of investment decisions. Companies that adopt AI-enabled transparency tools often report stronger ESG ratings, improving access to sustainability-linked financing and institutional capital.

ESG reporting requires aggregating data from supply chains, satellite data, IoT sensors, financial disclosures, social media sentiment and more. Traditional systems cannot keep pace with the volume, variety, and velocity of this data.

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AI in ESG & Sustainability Major Players:-
Algotec Green Technology, Gross-Wen Technologies (GWT), Liqoflux, Agromorph, Xylem Inc., Valicor Environmental Services, Algenuity originClear Inc., Evodos B.V. and MicroBio Engineering Inc.

Key players highlights:-

Algotec Green Technology - Provides biotech-based photobioreactors and algae cultivation solutions that support water quality and sustainability efforts in ESG applications; a growing innovator in sustainable environmental AI-assisted solutions.

Gross‐Wen Technologies (GWT) - Developer of sustainable algae-based wastewater treatment technologies (e.g., RAB® systems) used for nutrient recovery and reduced environmental impact in AI-enabled ESG workflows; reported $45 M annual revenues supporting its segment.

Xylem Inc. - Large global water tech company with extensive AI-powered water/wastewater management solutions contributing to ESG performance; US$8.6 B revenue reflects significant scale in sustainability markets.

Valicor Environmental Services - Provides environmental services including algae nutrient recovery and biofuel initiatives that tie into broader ESG and sustainability analytics; $28 M in related services revenue.

MicroBio Engineering Inc. - Engineering firm delivering algae-based wastewater systems adopted in municipal/industrial settings; generated $18.2 M in 2024 revenue supporting sustainable ESG outcomes

AI in ESG & Sustainability Regional Highlights

1) North America
North America holds the largest share of the global AI in ESG & Sustainability market at 43.8% in 2024.
The region's growth is driven by advanced tech adoption, strong regulatory push for ESG compliance, and major enterprise investments.
The United States leads with significant revenue and a projected high CAGR, reflecting expanding adoption across sectors.

2) Europe
Europe is the second-largest region with robust adoption of AI for ESG & sustainability driven by EU regulations like SFDR and CSRD.
The region's share is substantial, with strong market growth in ESG reporting solutions.
Europe's market continues to develop rapidly as organizations align with sustainability mandates and investor demands.

3) Asia Pacific
Asia Pacific is an emerging high-growth market with rising ESG awareness and digital transformation across key countries.
The region's share is smaller than North America/Europe in 2024 but is expanding quickly with government initiatives and enterprise adoption.
Growth is supported by investments in AI platforms for sustainability in China, Japan, India, and Australia.

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AI in ESG & Sustainability market segmentation :

By Technology
Machine Learning (ML): Identifies patterns in ESG data and improves sustainability forecasting.
Natural Language Processing (NLP): Analyzes ESG reports, disclosures, and regulatory documents.
Deep Learning: Handles complex ESG datasets for advanced risk and impact analysis.
Predictive Analytics: Forecasts ESG risks, emissions trends, and compliance outcomes.
Generative AI: Automates ESG reporting, scenario modeling, and sustainability insights.
Others: Includes rule-based AI and hybrid analytics tools.

By Deployment
Cloud-based Solutions: Scalable, cost-efficient, and enable real-time ESG monitoring.
On-premises Solutions: Preferred for high data security and regulatory control.

By Organization Size
SMEs: Adopt AI for cost-effective ESG compliance and reporting.
Large Enterprises: Use advanced AI platforms for enterprise-wide ESG strategy and risk management.

By End-User
Energy & Utilities: Emissions tracking and energy optimization.
Manufacturing: Supply chain sustainability and waste reduction.
Retail: Ethical sourcing and ESG transparency.
Financial Services: ESG risk assessment and investment screening.
Healthcare: Regulatory compliance and sustainable operations.
Information Technology: Carbon footprint management of digital infrastructure.
Consumer Goods: Sustainable product lifecycle management.
Government & Public Sector: Policy monitoring and ESG compliance.
Others: Includes education, logistics, and real estate sectors.

FAQ'S

1: What is driving the growth of the AI in ESG & Sustainability Market?
The market is driven by rising regulatory reporting requirements, demand for real-time ESG analytics, and enterprise focus on carbon reduction and transparency.

2: How is AI used in ESG & Sustainability initiatives?
AI is used for ESG data collection, risk scoring, predictive sustainability modeling, emissions tracking, and automated compliance reporting.

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