The environmental health and safety software market is expected to register a CAGR of 12.37% during the forecast period (2022 - 2027). Environmental health and safety (EHS) software solutions are responsible for maintaining adequate balance among various environmental themes, including regulatory compliance, corporate sustainability toward environmental protection, accident avoidance, environmental audit and inspection, process standardization, and incident response.
Environmental health and safety (EHS) software solutions are responsible for maintaining adequate balance among various environmental themes, including regulatory compliance, corporate sustainability toward protecting of environment, accident avoidance, environmental audit and inspection, process standardization, incident response, etc.
EHS solutions are becoming a core part of every business organization to bring transformation in business continuity, profitable growth, corporate social responsibilities, and operational excellence related to environmental interaction. The integrated environment of government regulations, legal forces, economic conditions, and technologies have convinced organizations from multiple industries to implement EHS solutions as a basic operational need. More importantly, organizations are trying to avoid any future operational expenses due to environmental protection and risks involved with hazardous situations.
The demand for robust EHS software is growing due to the importance of safety practices in the workplace. According to Health and Safety Executive (HSE), more than half of fatal injuries to workers in 2020 were in the agriculture, forestry and fishing, and construction sectors. In 2020, 38% of fatal work injuries were reported in self-employed workers, even though such workers made up only 16% of the workforce. The proportion of fatal injuries to self-employed workers is higher in 2020-21 than in the past few years.
The implementation and budget concerns, along with the lack of analytics, are hampering the market’s growth. According to the National Association for EHS&S Management (NAEM) EHS&S Software Buyer’s Guide, buyers in the market for a new system are budgeting between USD 58,000 and USD 2,000,000 for their initial software purchase, with an average budget of USD 310,750.
There is an increasing need for EHS software by various companies to help increase the ability to monitor the health and safety of workers during COVID-19 by automating reporting and management of cases, communication with workers, increased self-assessments, and voluntary check-ins. Government guidelines have also called for employers to conduct COVID-19 risk assessments to establish needed controls. It is important to conduct these risk assessments systematically and to have a centralized management method, which can be offered by the EHS software.
Key Market Trends
Oil and Gas Segment to Hold Significant Market Share
Oil and gas workers are directly exposed to chemicals produced and used in the oil and gas industry. Depending on the length and amount of exposure time, they may suffer occupational diseases of the skin, lungs, and other organs. Hence, the requirement of an effective EHS strategy becomes essential for the organizations operating in this sector.
Oil and gas are significant sectors playing a substantial role in developing EHS demand in the studied market. Oil and gas companies have been early adopters of EHS solutions, as they need to operate in a high-risk, fluctuating, efficient, and highly regulated industry.
Several factors, such as increasing energy demand, volatile oil and gas prices, a surge in government scrutiny, and an increase in demand for efficient incident management, are expected to give a broader market space for EHS in the studied sector. According to the 2021 Government Accountability Office report, approximately 18,000 miles of decommissioned oil and gas pipelines constitute safety and environmental risks in the Gulf of Mexico. The report was released on the eve of the 11th anniversary of the Deepwater Horizon oil rig disaster in the Gulf. Such risks are further creating demand for the EHS software.
In March 2021, the Bureau of Safety and Environmental Enforcement launched a free BSEE Safe text message alert system. The agency reports that over 7,000 subscribers have received links to BSEE safety alerts and bulletins catering to offshore oil and gas work on the Outer Continental Shelf. Additionally, BSEE has sent text messages directing subscribers to 61 safety alerts and bulletins through BSEE Safe. The resources offer lessons learned from industry incidents and near misses and recommendations to help prevent future occurrences.
According to the International Association of Oil and Gas Producers (IOGP) safety performance indicators annual report, a decrease in the number of oilfield fatalities from 25 in 2019 to 14 in 2020 has been observed. This reflects not only increased safety standards and awareness in the oil patch but also a year-on-year decrease of 16% in total work hours reported. Further, as per the report, the 14 recorded fatalities occurred in 12 separate incidents. While the onshore and offshore fatal accident rates are 0.42 and 0.92, respectively, the company and contractor fatal accident rates are 0.56 and 0.54, respectively.
North America Holds Significant Market Share
North America is expected to hold the largest share in the environmental health and safety software (EHS) market. One of the primary reasons for growth in the market studied is the increasing number of stringent government regulations regarding workplace safety, environment, etc.
Moreover, the region has a strong foothold of EHS software vendors who contribute to the growth of the market studied positively. Some of the vendors based out of North America include Intelex Technologies Inc., VelocityEHS, Sai Global Pty Limited, Dakota Software Corporation, and Gensuite, among others.
Vendors in the region are enhancing their EHS software solutions. For instance, in July 2021, VelocityEHS, a leader in cloud-based environmental, health, safety (EHS), and sustainability software, acquired Kinetica Labs, a pioneer in the development of sensing and simulation technology for occupational safety and health in Ann Arbor.
Similarly, in May 2021, VelocityEHS acquired OneLook Systems, an Irish software firm. The acquisition will boost its enterprise-wide platform services and its capacity to assist users in addressing emerging risk management concerns related to the COVID-19 outbreak and beyond.
Several players are taking the initiative to strive for zero safety incidents and minimize the impact of their operations on the environment. For instance, in August 2021, ProcessMAP Corporation, a data-intelligence driven software solutions provider, which helps empower the customers to transform into a sustainable enterprise, announced that Fortune Brands Home & Security, Inc., a Fortune 500 company, will drive the digital transformation of its global EHS and ESG initiatives by leveraging ProcessMAP’s smart and actionable data-intelligence solutions.
The countries and their respective states in the region have developed several regulations and requirements to protect the natural environment and the health of their citizens. Products manufactured, sold, distributed, and imported are subject to an expanding list of complex local, regional, and federal (mandatory and self-regulated) environmental requirements in the United States and Canada. These environmental and safety measures are creating new compliance challenges for global and local businesses.
In the North American region, the Environmental Protection Agency (EPA) and the US Occupational Safety and Health Administration (OSHA) are strictly implementing industrial safety, which has been driving the adoption of EHS Software. Almost all the businesses in the United States are subject to OSHA standards, so they are a relevant concern for employers and employees alike in a vast range of industries.
The Environmental Health and Safety Software Market is fragmented, with many large, technologically advanced players present in the industry, such as VelocityEHS, Enablon, Cority, and Gensuite, the rivalry is very high, especially among the market incumbents. Market penetration is growing, with a strong presence of major players in established markets. With an increasing focus on innovation, the demand for new technologies, such as AI, is growing, which, in turn, is driving investments for further developments.
May 2022 - DNV strategically partnered with IOGP to develop decarbonization standards, accelerating upstream oil and gas transition. Moreover, DNV was selected by the International Association of Oil & Gas Producers (IOGP) to support the decarbonization initiatives of IOGP members, producers of 40% of the world’s oil and gas.
January 2022 - ProcessMap Corporation announced that Hg, a leading software and services investor with nearly USD 40 billion funds under management, agreed to make a significant investment to accelerate ProcessMAP’s growth and expansion, thus helping in solidifying the company’s position as a global leader in the EHS software sector.
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