Historically, environmental health and security software hasn’t been a huge market — at least compared to others in the software-as-a-service segment — and it’s admittedly not the most exciting startup category. But that’s changing, according to a new survey from research firm Verdantix.

EHS software acts as a data management system for capturing and analyzing information related to occupational health and safety, waste management and sustainability. For example, companies use EHS software to track emissions and investigate workplace incidents, provide health and safety training, and allow access to restricted areas.

The Green Quadrant of Verdantix: EHS Software 2023 survey shows that the EHS software market has had more than 50 transactions in the past two years and predicts it will grow from $1.6 billion in 2022 to about $2.7 billion in 2027. Verdantix predicts it will ease the global economic downturn weathered, moreover thanks to differentiators such as the use of AI and automation.

“Over the past two years, the market landscape for EHS software has undergone a paradigm shift as EHS providers have expanded their product offerings to meet the voracious appetite for robust environmental management solutions created by the ESG megatrend,” says industry analyst Chris Sayers from Verdantix. said in a statement. “As EHS features seek to connect with other business activities, providers are turning to emerging technologies as a point of differentiation and redefining the functional capabilities of EHS software.”

According to the Verdantix report, since ETF Partners invested about €10 million (about $11 million) in EHS vendor Enablon in 2011, private equity firms and strategic investors such as Wolters Kluwer and Fortive spent more than $4 billion to buy into the EHS software market. The absence of the world’s largest enterprise software providers – including IBM, Microsoft, Oracle, Salesforce and SAP – has left a lot of oxygen in the market for midsize companies to grow.