Despite political shifts and regulatory uncertainty, US companies remain committed to investing in digital sustainability and ESG initiatives, according to a new report by Information Services Group (ISG), a global AI-focused technology research and advisory firm.
The 2024 ISG Provider Lens™ Sustainability and ESG report for the US highlights a rapidly evolving market for digital solutions aimed at enhancing environmental and social sustainability and corporate governance. While some federal regulations may be scaled back, others are expected to endure under the current administration. Surveys suggest that enterprises will continue pursuing digital sustainability strategies to preserve brand value, mitigate risks, and reduce costs.
“Companies in the US recognise that mandatory ESG reporting is a matter of when, not if,” said Matt Warburton, Digital Sustainability lead for ISG. “Achieving accurate reporting will require both investment and time.”
With investors increasingly considering the impact of climate change on company valuations, demand for environmental solutions remains stronger than for social sustainability or corporate governance initiatives. The report notes that data platforms and managed services are experiencing the fastest growth, driven by rising global regulation. Meanwhile, IT solutions and services are expanding more slowly compared to operational technology (OT) and strategy services, as IT contributes relatively little to most enterprises’ overall carbon footprint.
Many organisations are recognising that sustainability solutions require tailored approaches and are seeking technology partners with specialised regulatory expertise in their respective industries. The US market features a diverse and expanding ecosystem of providers collaborating on complex sustainability transformations. AI, machine learning (ML), and Internet of Things (IoT) technologies are particularly prevalent in asset-intensive industries such as power and utilities, manufacturing, and transportation.
AI and ML are becoming essential tools for enhancing ESG initiatives, while generative AI has begun to emerge in this field over the past year. Early generative AI solutions have generated optimism about their potential to address sustainability challenges, particularly in reporting. However, to deliver measurable returns on investment, these tools must be trained on specific use cases.
According to ISG, many enterprises are incorporating sustainability efforts into broader digital transformation strategies. Typically, sustainability initiatives account for 5% to 10% of overall programme costs, sharing implementation expenses for greater financial efficiency.
“Many sustainability initiatives reduce costs, improve customer retention, and enhance employee attraction,” said Jan Erik Aase, partner and global leader at ISG Provider Lens Research. “These benefits further amplify the advantages of digital transformation.”
