Information Services Group, Inc. (III): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of Information Services Group, Inc. (ISG)-a PESTLE analysis that cuts through the noise and gives you actionable context for late 2025. The direct takeaway is this: ISG is successfully leveraging its AI-centered strategy to drive growth in the Americas, but persistent global economic and geopolitical caution, especially in Europe and Asia Pacific, is a clear headwind. The core opportunity is in advising clients on AI and regulatory compliance. Let's break down the macro forces shaping their next move.

Global politics are forcing clients to pause and rethink large spending. Geopolitical conflicts, especially in Europe and the Middle East, create a palpable client spending caution. This isn't a direct hit to ISG's operations, but it means advisory contracts get delayed or downsized.

Also, new U.S. H-1B visa fee increases are pushing client labor costs up, which paradoxically helps ISG by accelerating the client need for automation and outsourcing advisory. The political uncertainty post-U.S. election may affect federal regulatory direction, so we need to watch that closely.

The potential shifts in U.S. independent contractor laws could defintely impact the gig worker advisory models ISG supports.

Action: Monitor U.S. labor law changes for contingent (gig) workers.

The numbers from the third quarter of 2025 tell a dual story of strength and caution. Information Services Group, Inc. (ISG) saw GAAP Revenues hit $62 million, which is a solid 8% year-over-year increase (excluding a divested unit). Here's the quick math: the operational efficiency is clear, as Adjusted EBITDA jumped 19% year-over-year to $8.4 million.

The Americas demand is the engine, with Q3 revenue up 11%, fueled by clients needing help with AI and cost-optimization. But what this estimate hides is the global disparity: Europe and Asia Pacific markets remain cautious, with Q3 Asia Pacific revenue actually down 15%.

Persistent inflation and high interest rates mean clients are laser-focused on cost-takeout advisory, and that's a direct revenue opportunity for ISG.

The Americas are carrying the load right now.

Sociological shifts are changing what clients ask for and how ISG delivers. We're seeing generational shifts-specifically Gen Z entering management-which increases client demand for flexible work and purpose-driven strategies. This means ISG's advice has to integrate culture and talent alongside technology.

There's a strong market need for reskilled workers in critical areas like AI, data analytics, and cybersecurity. The high demand for ISG's specialized human expertise is clear: consulting utilization was a solid 72% in Q3 2025.

As routine tasks get automated, the focus on soft skills like critical thinking is rising.

Humans are still the bottleneck, not the technology.

Technology is the core revenue driver for Information Services Group, Inc. Their AI-centered strategy is paying off, with Q3 2025 AI-related revenue reaching $20 million. This isn't just hype; it's a measurable revenue stream.

The underlying market momentum is strong, too. The as-a-service (cloud) market is up nearly 30% year-to-date, which directly fuels the client modernization projects ISG advises on. Clients are shifting from AI experimentation (running small pilots) to production and demanding measurable returns on their AI investments.

ISG is actively researching ecosystems like Databricks and SAP, positioning themselves for future platform advisory.

They are where the money is moving.

Legal and regulatory changes are creating a massive new consulting pipeline. The increasing global regulation on data privacy and the need for ethical AI deployment are driving advisory demand. This is a non-discretionary spend for clients, which makes it a stable revenue source for ISG.

Mandatory Environmental, Social, and Governance (ESG) reporting is seen as a matter of 'when, not if,' creating significant compliance consulting opportunities. Plus, the complexity of Intellectual Property (IP) and data governance rises sharply with the adoption of Generative AI (GenAI)-the technology that creates new content.

Monitoring potential U.S. labor law changes regarding contingent (gig) workers is defintely crucial, as noted earlier.

Compliance is the new growth market.

While Information Services Group, Inc. has a low direct environmental footprint-it's an advisory firm with 1,316 professionals-the E in ESG is a huge client opportunity. Client demand for digital sustainability and ESG advisory is high.

The firm provides research and advisory on data platforms specifically for ESG compliance and achieving net-zero goals. Their focus is on helping clients measure, monitor, and reduce their supply chain carbon footprint, which is where the real impact lies.

They sell the shovel, not the dirt.

Next Step: Strategy Team: Map the 2026 sales targets to the $20 million Q3 2025 AI-related revenue baseline by end of the week, prioritizing the Americas market's growth trajectory.

Information Services Group, Inc. (III) - PESTLE Analysis: Political factors

Geopolitical conflicts in Europe and the Middle East create client spending caution

You're seeing the global advisory market-and Information Services Group, Inc. (ISG) right along with it-react to a geopolitical risk supercycle that has made clients hesitant to commit to large, long-term projects. This caution is most visible in Europe, a key market for ISG.

While ISG's Americas revenue was strong, up 11% in Q3 2025, the European market remains sluggish. The company noted that demand is only 'beginning to increase' in Europe, where the market is still cautious amid economic and geopolitical uncertainty. For the nine months ended September 30, 2025, the European region's revenue declined by 12% compared to the prior year, reflecting this prolonged client hesitancy. This is a direct consequence of the instability from the Russia-Ukraine conflict and the Israel-Hamas war, which fuel regional instability and supply chain disruption, making CEOs rank geopolitical risk as their main concern for 2025.

Here's the quick math on regional performance:

The Americas is carrying the weight, but the European drag means less global revenue growth.

New U.S. H-1B visa fee increases labor costs, pushing clients toward automation

The change in U.S. H-1B visa policy, effective September 21, 2025, is a major political driver pushing clients toward automation solutions, which is a core service area for ISG. The new presidential proclamation introduced a one-time fee of $100,000 for all new H-1B visa petitions filed for workers outside the U.S. This fee does not apply to renewals or extensions for workers already in the country, but it dramatically raises the cost of bringing in new, specialized international talent.

This massive cost hike directly impacts the total cost of ownership for IT outsourcing and consulting projects that rely on foreign-born labor. The policy is explicitly designed to push employers toward domestic hiring, but for many tech-centric companies, the practical response is to accelerate the adoption of Artificial Intelligence (AI) and automation to reduce reliance on human labor entirely. ISG's focus on being an 'AI-centered technology research and advisory firm' is defintely well-timed to capitalize on this politically-induced cost pressure.

• New H-1B fee: $100,000 per new petition (effective September 21, 2025).
• Impact: Forces clients to re-evaluate offshore/onshore talent models.
• ISG's Response: Increased demand for AI-centered services for cost optimization.

Potential shifts in U.S. independent contractor laws could impact gig worker advisory models

The political back-and-forth over classifying independent contractors versus employees in the U.S. creates significant legal uncertainty for advisory firms, especially those using a flexible, project-based workforce. The U.S. Department of Labor (DOL) announced on May 1, 2025, that it would not enforce the 2024 Independent Contractor Rule, which had made it easier to classify workers as employees, and instead reverted to the older 'economic realities' test. This is a temporary reprieve for firms, but the underlying legal risk remains high.

The current situation forces businesses to navigate a 'dual framework' of overlapping, slightly different tests, increasing the risk of misclassification lawsuits and audits. Misclassification can lead to back pay claims and significant penalties. Plus, state-level laws are adding complexity; for instance, California's Freelance Worker Protection Act, effective January 1, 2025, requires written contracts for professional services valued at $250 or more. For ISG's consulting and managed governance services, this regulatory fragmentation means higher compliance costs and a more complex operating model for its gig worker advisory services.

U.S. political uncertainty, post-election, may affect federal regulatory direction

The post-election political environment in the U.S. for 2025 has elevated regulatory and trade policy uncertainty to a top-tier risk. A survey found that nearly 60% of globalized companies expected the trade conflicts of the incoming administration to have a negative financial impact. This is driven by aggressive trade actions, such as the announced tariffs on Mexico and Canada, which impact over $1 trillion in global trade.

While Information Services Group, Inc. has minimal exposure to the U.S. federal government, it does have a strong pipeline in the U.S. state and local public sector. Shifts in federal regulatory direction-on everything from technology export controls to data privacy-can quickly affect state budgets and the willingness of public sector clients to sign off on major digital transformation contracts. ISG's management noted they continue to monitor the macro environment, including the 'impact of tariffs, FX, inflation and other factors,' as these political risks translate directly into economic uncertainty for their client base. Political risk has climbed into the top three corporate threats in 2025, and that means clients delay decisions.

Information Services Group, Inc. (III) - PESTLE Analysis: Economic factors

You're looking at Information Services Group (III) and wondering how the current economic headwinds-the ones we've been tracking since late 2024-are actually hitting their bottom line. The short answer is: the global economy is creating a clear split in demand, but the company's focus on Artificial Intelligence (AI) and cost-takeout is proving to be a powerful counter-cyclical force. It's a tale of two markets, defintely.

The persistent inflation and high interest rates we've seen throughout 2025 are pushing clients to prioritize one thing above all else: cost-takeout advisory. When capital is expensive, businesses stop funding experimental projects and immediately funnel their spend into services that promise a swift, measurable return on investment (ROI), which is exactly where Information Services Group shines with its digital transformation and sourcing advisory services.

Q3 2025 GAAP Revenues Hit $62 Million, Up 8% Year-over-Year (Excluding Divested Unit)

The company's ability to navigate this environment is clear in the Q3 2025 numbers. GAAP Revenues came in at $62 million. That's a solid result, representing an 8% increase year-over-year when you exclude the results from the divested automation unit. Here's the quick math: clients are still spending, but they are being highly selective, choosing advisory services tied to efficiency and next-generation growth.

This disciplined approach to spending is also translating directly to profitability. The Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which is a clean measure of core operating performance, was up significantly. Q3 2025 Adjusted EBITDA was $8.4 million, showing a strong 19% year-over-year increase. That's a margin expansion that tells you they are taking on higher-margin work and managing their operating expenses tightly.

Regional Demand Shows a Clear Economic Split

The economic picture is not uniform across the globe, and the regional revenue breakdown for Q3 2025 highlights this perfectly. The Americas market remains the engine of growth, while other regions are showing more caution. You need to watch this geographical divergence closely as a leading indicator for global corporate confidence.

Here is the breakdown of the Q3 2025 regional revenue performance (excluding the divested automation unit for a clean year-over-year comparison):

Americas Demand Remains Robust, Driven by AI and Cost-Optimization

The Americas market, which accounts for the majority of the firm's revenue, continues to show robust demand. Q3 revenue was up a powerful 11% to $42.2 million. This growth is driven by two key economic imperatives for U.S. companies:

• AI Strategy and Adoption: Clients are investing heavily in AI-centered technology services to gain a competitive edge.
• Cost-Takeout Advisory: High borrowing costs mean companies are aggressively seeking operational efficiencies, which fuels demand for sourcing and digital transformation advisory.

This is a clear opportunity for Information Services Group: be the go-to partner for AI and efficiency. That's a strong position to be in when the economy is tight.

Europe and Asia Pacific Markets Remain Cautious

In contrast, the economic uncertainty in Europe and Asia Pacific is palpable. While Europe saw a return to growth with revenue up 7% to $16.0 million (excluding the divested unit), the market is still characterized by caution due to ongoing economic and geopolitical uncertainty. Asia Pacific, however, saw a significant revenue decline of 15% to $4.2 million in Q3, reflecting a much slower pace of corporate spending in that region. The core issue here is that global economic instability always hits non-core markets first.

Information Services Group, Inc. (III) - PESTLE Analysis: Social factors

Generational shifts (Gen Z) increase client demand for flexible work and purpose-driven strategies.

The influx of Generation Z (born 1997-2012) into the professional world is fundamentally reshaping the social contract of work, which directly impacts Information Services Group's operations and its client's talent strategies. This generation is projected to account for 27% of the global workforce in 2025, and their expectations are non-negotiable.

You see this most clearly in the demand for flexibility and purpose. Research indicates that 77% of Gen Z considers a flexible work-life balance a top priority, viewing hybrid or remote options as a necessity, not a perk. Information Services Group itself notes that the workplace of 2025 is moving beyond the traditional office, with hybrid workers reporting high engagement. This shift means that as an advisory firm, Information Services Group must not only offer these models internally to attract and retain talent but also guide its clients-which include more than 75 of the world's top 100 enterprises-in adopting a more purpose-driven, flexible operating model.

The challenge is real: forcing a return-to-office (RTO) policy, for example, can clash with purpose-driven initiatives and even increase attrition risk, particularly among women. This is a defintely a social factor that influences client consulting needs around organizational design and change management.

Strong market need for reskilled workers in AI, data analytics, and cybersecurity.

The rapid adoption of Artificial Intelligence (AI) and digital transformation is creating a massive skills gap, making the need for reskilling a critical social and economic factor for Information Services Group and its clients. Simply put, the nature of work is changing faster than the workforce can adapt.

Information Services Group is positioned to capitalize on this, given its focus as an AI-centered technology research and advisory firm. The demand is clear in the numbers: the company's AI-related revenue reached $20 million in Q3 2025, a 4x increase year-over-year, and year-to-date ACV (Annual Contract Value) for AI, data, analytics, and platforms grew by 24%. This growth is a direct reflection of client desperation for specialized human expertise to implement these technologies.

An Information Services Group study from March 2025 highlighted the explicit shift in talent requirements within Global Capability Centers (GCCs), moving away from manual tasks toward higher-value work. Here's the quick math on where the talent focus is going:

The firm's advisory services are essential for companies trying to navigate this talent crunch and reskill their existing employees, which is often 70-92% cheaper than hiring new talent.

Consulting utilization was a solid 72% in Q3 2025, reflecting high demand for specialized human expertise.

The consulting utilization rate is a key operational metric that shows how much of a firm's consultant time is being billed to clients. Information Services Group's rate confirms a sustained, high demand for their specialized human capital, especially in the face of widespread automation talk.

In the third quarter of 2025, consulting utilization was a solid 72%, which is right in line with the firm's average for the quarter. Year-to-date utilization stands even higher at 75%, meeting the firm's long-term target. This high utilization rate shows that despite the increasing use of AI in the industry, clients are still heavily reliant on human consultants for complex, strategic advisory work.

The high utilization is fueled by the complexity of AI adoption, cost optimization objectives, and the need for foundational technology investment at scale. This means Information Services Group's core asset-its people-is being deployed efficiently to solve high-value problems.

Focus on soft skills like critical thinking is rising as routine tasks are automated.

As AI and automation take over routine, transactional tasks-a trend Information Services Group actively advises on-the value of uniquely human soft skills is surging. The automation of work is not eliminating all jobs; it is shifting the required skill set up the value chain.

The World Economic Forum's Future of Jobs Report 2025 highlights this transition, noting that while technological skills like AI and big data are critical, soft skills are also rapidly gaining importance. These are the skills that cannot be easily automated, and they are what clients are paying top dollar for in an advisory firm.

• Analytical Thinking: Essential for interpreting the massive data sets generated by new platforms.
• Creative Thinking: Needed to design novel business models that leverage AI, not just automate old ones.
• Leadership and Social Influence: Crucial for managing the organizational change and cultural shifts that digital transformation requires.
• Flexibility and Agility: Necessary for consultants to adapt to new technologies and client needs in a constantly evolving market.

The firm's strategy must therefore focus on multi-dimensional skilling, ensuring its consultants are not just tech-savvy but also masters of human-centric skills like critical thinking and emotional intelligence. This is the only way to maintain a 75% year-to-date utilization rate in the long run.

Information Services Group, Inc. (III) - PESTLE Analysis: Technological factors

ISG's AI-centered strategy is a key revenue driver; Q3 2025 AI-related revenue reached $20 million.

Information Services Group (ISG) has firmly positioned itself as an AI-centered technology research and advisory firm, and that focus is defintely paying off in the near term. The Artificial Intelligence (AI) strategy is now a central pillar of the firm's revenue generation, moving beyond a niche offering to a core service line.

In the third quarter of 2025 alone, AI-related revenue reached a significant $20 million. That's a massive fourfold increase compared to the prior year, showing the rapid acceleration of client demand for AI strategy and adoption services. For context, this AI revenue contributed a substantial portion of the total GAAP revenues of $62.4 million reported for Q3 2025.

The firm has supported over 350 clients with AI-related advisory and research services year-to-date, an increase of over 200% from the same period last year. This momentum confirms that the market is shifting from simple curiosity to committed, funded projects. Here's the quick math on how critical the AI segment is becoming:

The as-a-service (cloud) market is up nearly 30% year-to-date, fueling client modernization projects.

The broader technology market is defined by the relentless growth of the as-a-service (XaaS) model, which includes Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS). This growth is the foundation for almost all client modernization projects, and it's a huge opportunity for ISG.

The global XaaS market's Annual Contract Value (ACV) was up 29% year-to-date through the first nine months of 2025, reaching $60.8 billion. This is a powerful acceleration from the 11% growth seen in the same period last year. This surge is primarily led by infrastructure deals tied directly to AI adoption, as enterprises need cloud-scale computing power to run their new models.

The XaaS segment now accounts for a commanding 65% of the combined market ACV, up from 60% in the prior year. This trend means that traditional managed services, while still relevant, are growing sluggishly at just 1.5% year-to-date. You need to be where the growth is, and right now, that's squarely in the cloud-first, AI-driven migration space.

Client focus is shifting from AI experimentation (pilots) to production and measurable returns.

We've moved past the initial hype cycle for Generative AI (GenAI). Clients are no longer content with simple proofs-of-concept; they demand measurable business value and production-ready deployments. This shift from experimentation to industrialization is a critical inflection point for advisory firms like Information Services Group.

According to ISG's own 2025 research, the number of prioritized enterprise AI use cases that have reached full production has more than doubled since 2024. Specifically, 31% of enterprises deploying AI have brought at least one of their top three most-funded use cases into production. This means the focus is on integrating AI into end-to-end workflows and building robust AI ecosystems aligned with concrete business objectives.

The key takeaway for our clients is simple: enterprises are not impressed by pilots alone; they want GenAI delivery models that can handle real workloads and withstand operational pressures. The focus has moved from cost-saving pilots to high-value functions like compliance, risk management, and sales enablement.

ISG is actively researching ecosystems like Databricks and SAP, positioning for future platform advisory.

Information Services Group is proactively positioning itself for the next wave of platform-centric modernization by deep-diving into key technology ecosystems. This forward-looking research is what drives future advisory revenue.

The firm has launched major research studies into the service provider landscapes for two critical platforms, signaling where the next big client investments will be:

• Databricks Ecosystem Partners: This study focuses on how service providers help enterprises modernize data strategy and accelerate AI adoption using the Databricks analytics platform, covering services like Modernization and AI/ML Enablement.
• SAP Ecosystem: This research examines providers offering SAP-based solutions, specifically focusing on the mass migration to SAP S/4HANA and the adoption of SAP Business AI solutions as the older SAP ERP Central Component (ECC) approaches its phase-out.

This active research ensures that ISG's advisors are equipped with the most comprehensive, data-driven insights to guide clients through these complex, multi-year platform transformations, securing the firm's competitive edge in high-value advisory work for 2026 and beyond. Finance: Track the ACV for Databricks and SAP-related deals starting Q4 2025 to validate this strategic bet.

Information Services Group, Inc. (III) - PESTLE Analysis: Legal factors

The legal landscape for a global advisory firm like Information Services Group, Inc. (III) is not just a compliance hurdle; it's a massive, near-term revenue opportunity. You are seeing a convergence of data privacy, ethical AI, and mandatory environmental, social, and governance (ESG) reporting that is forcing clients to spend on high-end governance and strategy services. The core risk is the speed of regulation outpacing your clients' ability to adapt, which is exactly where Information Services Group steps in.

Here's the quick math: companies are facing fines of up to 6% of global revenue under updated GDPR (General Data Protection Regulation) rules for non-compliance, plus the reputational damage. That risk drives demand for your 'managed governance' offerings.

Increasing global regulation on data privacy and ethical AI deployment drives advisory demand.

The regulatory environment for data and artificial intelligence (AI) is fragmenting globally, which is a perfect setup for Information Services Group's advisory business. The European Union's AI Act, which became law in 2024, is seeing its first enforcement phase in mid-2025, specifically banning unacceptable-risk AI uses like social scoring.

Also in the EU, the Digital Operational Resilience Act (DORA) became effective on January 17, 2025, standardizing stringent digital resilience requirements for the financial sector and their critical third-party service providers. Outside the EU, China's Personal Information Protection Law (PIPL) and India's advancing data protection act create a patchwork of compliance requirements. This complex global regulatory environment is fueling the demand for Information Services Group's AI-centered advisory services, which saw a fourfold increase in AI-related revenue to $20 million in Q3 2025.

Mandatory ESG reporting is seen as a matter of 'when, not if,' creating compliance consulting opportunities.

Mandatory ESG (Environmental, Social, and Governance) reporting is moving from voluntary disclosure to hard legal deadlines, creating a compliance consulting boom. For European operations, the Corporate Sustainability Reporting Directive (CSRD) mandated that companies already under the Non-Financial Reporting Directive (NFRD) must publish their first reports on the 2024 fiscal year in 2025. This is a huge lift for financial and operational data collection.

Globally, the International Sustainability Standards Board (ISSB) Standards (S1 and S2) require first reports on the 2024 financial year, with most organizations expected to submit by mid-2025. In the U.S., state-level rules like California's SB 253 (GHG emissions disclosure) and SB 261 (climate-related financial risk) are forcing large companies to collect Scope 3 emissions data at scale, a process that requires an 18-month lead time in the first cycle. This is defintely a core competency for an advisory firm.

The following table outlines the immediate compliance deadlines driving client demand:

Intellectual property (IP) and data governance complexity rises with Generative AI (GenAI) adoption.

The explosion of Generative AI (GenAI) has created a legal minefield around Intellectual Property (IP) and data governance. The core legal battle is twofold: the legality of using copyrighted material to train AI models and the copyright status of the AI-generated output itself.

Recent court actions in 2025 are clarifying the risk for clients:

• The Thomson Reuters v. Ross Intelligence ruling in a Delaware federal court in 2025 rejected the fair use defense for an AI company training its model on proprietary legal content, especially when the AI product directly competes with the original.
• High-profile lawsuits like The New York Times v. Microsoft & OpenAI are testing whether using millions of copyrighted articles for training constitutes infringement and causes economic harm.
• The U.S. Copyright Office continues to affirm that only human beings qualify as authors under U.S. copyright law, meaning AI-generated work without significant human creative input is generally ineligible for copyright protection.

This uncertainty means every enterprise deploying GenAI needs an Information Services Group-level advisor to map their data lineage, assess IP risk, and structure licensing agreements. You need to ensure clients aren't exposed to billions in damages, which is the potential liability in cases like Kadrey v. Meta over pirated training data.

Monitoring potential U.S. labor law changes regarding contingent (gig) workers is defintely crucial.

The classification of contingent workers (independent contractors, freelancers, gig workers) remains a significant legal risk in the U.S., directly impacting the operating models of all technology and advisory firms. The U.S. Department of Labor (DOL) final rule, which went into effect in March 2024, reinstated the six-factor 'economic realities' test to determine independent contractor status, making it harder to classify workers as non-employees.

This rule forces companies to re-examine their workforce structure to avoid misclassification penalties, which is a key advisory service. Also, while a federal judge in Texas blocked the Department of Labor's final rule that would have raised the salary threshold for 'white collar' overtime exemptions to $58,656 annually on January 1, 2025, the legal pressure for higher compensation and expanded worker rights continues at the state level. For example, states like Connecticut, Missouri, and Nebraska have new paid sick leave laws taking effect in 2025, expanding coverage to more employees.

Information Services Group, Inc. (III) - PESTLE Analysis: Environmental factors

ISG's Direct Environmental Footprint is Low

As a global AI-centered technology research and advisory firm, Information Services Group, Inc.'s (ISG) direct environmental footprint is naturally small, especially compared to manufacturing or logistics companies. You're looking at a services business model, so the primary impact comes from office energy use and professional travel. With approximately 2.1K employees worldwide as of September 2025, and trailing 12-month (TTM) revenue of around $241 million as of late 2025, the firm's carbon profile is lean.

Still, ISG has a formal 'Go Green' initiative. They measure and monitor their travel-related carbon emissions using a platform called Navan, which is a concrete action. To offset these business-critical emissions, they partner with TreeNation to plant trees in the 'ISG Forest,' which is a simple, tangible way to address their operational impact.

Here's the quick math on their core business scale:

Client Demand for Digital Sustainability and ESG Advisory is High

The real environmental opportunity for ISG is not in their own footprint, but in helping their clients manage theirs. Honestly, the demand for digital sustainability and Environmental, Social, and Governance (ESG) advisory services is exploding. Enterprises are facing intense pressure from regulators, investors, and stakeholders to move past vague promises and show verifiable progress.

ISG Research sizes the global digital sustainability market at approximately $21 billion in 2025. This market is expected to reach an estimated $34 billion by 2027, representing a robust compound annual growth rate (CAGR) of 16%. That's roughly three times the growth rate of the overall market, so this is a massive tailwind for their advisory business.

The Firm Provides Research and Advisory on ESG and Net-Zero Goals

ISG is actively positioning itself to capitalize on this demand by integrating sustainability into its core offerings. They are launching comprehensive research studies, like the 2025 ISG Provider Lens™ Digital Sustainability study, to evaluate providers in this space, which directly informs their advisory work.

Their advisory work focuses on helping enterprises embed sustainability into their strategies and strengthen their digital capabilities to meet ESG objectives. This includes helping clients with:

• Achieve efficient compliance with evolving global regulations.
• Set and work toward ambitious net-zero goals.
• Leverage technology to perform data-driven materiality assessments.
• Implement transformation plans for operating model changes.

Focus on Supply Chain Carbon Footprint Reduction

A critical area of focus is the supply chain (Scope 3 emissions), which is where most large companies have their biggest environmental impact. ISG's advisory services are designed to help clients measure, monitor, and reduce their supply chain carbon footprint to achieve net carbon neutrality.

The firm specifically advises on the technology and data platforms needed to manage this complex task. This is where the money is: helping clients collect, analyze, and utilize the necessary ESG data across disparate systems like Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) to ensure they comply with regulations and hit their decarbonization targets. The market for data platforms and managed services is actually growing the fastest in the U.S., driven by the need for accurate, auditable ESG data.