Struggling to find the perfect, ESG management software and risk management software for your business? Look no further! In this comprehensive guide, we’ll equip you with everything you need to make an informed decision. From understanding the importance of ESG reporting to the key features of selecting the right software solution, we’ve got you covered.

Imagine streamlining your environmental, social, and governance reporting process, enhancing transparency with key stakeholders, and sustainability performance and demonstrating your commitment to sustainable practices. With the right ESG and sustainability reporting software platform, you can achieve all this and more. However, navigating the multitude of options available in the market can be overwhelming.

That’s where we come in. Our guide dives deep into the world of the various ESG frameworks, performance metrics and reporting software, providing valuable insights, tips, and expert advice to simplify your selection process and ensure compliance throughout. By the end, you’ll have a clear understanding of what to look for and how to make a decision on one platform that aligns with your business goals and values.

Let’s embark on your journey to finding the perfect ESG reporting software and take your sustainability efforts to new heights. But before that, lets first understand the importance of ESG reporting and what to consider when choosing ESG software.

What is ESG Reporting? A Quick Definition

ESG (Environmental, Social, and Governance) reporting is the disclosure of environmental, social and corporate governance data. Its purpose is to have companies create reports, to give investors shed light on a company’s ESG activities, and sustainability performance whilst improving and encouraging investor transparency across all organisations. These activities ultimately show companies have a positive impact on both society and the environment and lead to better changes for future generation

Today, most companies have committed to improving their environment, social, and governance (ESG) performance through sustainability initiatives and disclosures to meet growing demands from investors, regulators, and customers. As a result, annual ESG audit and reporting has become a practice that’s increasingly being done with specialized ESG audit and reporting software solutions instead of spreadsheets or generic file management systems.

An ESG report is a communication and disclosure tool designed to increase corporate transparency about an organisation’s ESG goals, performance, risks, and opportunities. ESG reports should be clear, data-driven (rather than vague, anecdotal, or solely qualitative), authentic (not “greenwashing,” spin, or misrepresentation), and tell a clear story about how the company is pursuing better its corporate social responsibility and sustainability performance, and social and environmental performance, and equitable outcomes for its employees, customers, external communities, and the planet, backed by evidence.

ESG reports are typically published by the same ESG strategy, external assurance, compliance, investor relations, or corporate affairs department of a company, so tracking and creating ESG reports streamlined reporting them is a collaborative, cross-functional effort..

Why Use ESG Reporting Software?

ESG reporting and data quality can be a complex process, particularly for larger enterprise businesses with global teams or organisations. Manual and spreadsheet-based ESG data collection, reporting and data management software is error-prone, inefficient, and has major visibility, collaboration, report accuracy, and governance issues. It also just takes a lot more time.

Given that ESG disclosure, compliance and data assurance reporting requirements are no more a good thing to do but a must thing to do, this report is information that needs to be accurate, consistent, structured, and easy to access – and shouldn’t tie up all your time to collect and communicate.

Moreover, tracking all your ESG data and reporting is a recurring annual obligation. It’s much more efficient to use a system that’s purpose-built for auditing compliance, validate data archiving, historical data comparison, and benchmarking.

What to consider when choosing ESG software

 

Sustainability management software can help save time by automating and streamlining the process of continuously monitoring, reporting on, and improving on environmental impacts, and other social and governance impacts from business operations. But what’s the best way to determine what ESG software is right for your organization? Knowing what to look for can help you choose the best sustainability management software for your current and future needs. Here are four things to consider:

1. Strength of the company in the ESG software space

Sustainability management is a rapidly emerging market with many players big and small. Large players in adjacent markets such as Governance, Risk, and Compliance (GRC) or ESG investment portfolio are acquiring or partnering with smaller players specializing in ESG reporting or carbon management solutions. Climate tech startups are also proliferating. Key questions to have investors ask include:

  1. What is the provider’s overall market strength? E.g., longevity in the market, brand strength, competitive position, leadership, financial performance, regional coverage (global or other), solution scope (how many categories does the platform support?), etc.
  2. What is the primary market focus and how does it align with the ESG space? Is ESG a natural fit or just adjacent to the core strategy and capabilities?
  3. What aspects of sustainability management are addressed? E.g., materiality assessments, data management, reporting, investment portfolio management, carbon calculation and management, supply chain, climate action strategy, benchmarking/performance monitoring, expert insights.
  4. If it is an acquisition or partnership, what does the integrated solution and go-to-market strategy look like?
     

2. ESG data management and reporting

Data collection is at the heart of any sustainability program. Knowing what data is important, where it’s located, and ensuring that it’s aggregated into a single platform centralized repository can be a challenge, particularly for large, multinational corporations. Common data collection issues faced include:

  • Lack of clarity on what data needs to be collected and who owns it
  • Multiple data sources to manage – spreadsheets, databases, tools, and documents
  • Inconsistent data formats, definitions, and measurement units
  • No data automation or discovery
  • Lack of visibility/traceability into the data collection process
  • Manual processes leading to increased risk of errors and delays
  • Inability to benchmark progress

ESG software solutions can help companies reduce the complexity by automating and simplifying the data collection, data analysis, and reporting process. Questions to consider when choosing a solution include:

  1. Can data capture be automated across different geographic locations, data sources, and stakeholders?
  2. How is data privacy and security handled?
  3. What kind of data quality checks are present?
  4. Does it support international carbon accounting standards such as the Greenhouse Gas (GHG) Protocol?
  5. Is there transparency/visibility into how calculations are performed? Can they be audited and tracked?
  6. What does the reporting functionality look like?
  7. Which ESG reporting frameworks and standards are supported?
  8. Can you set and track progress against baselines?
  9. How are improvement opportunities identified and assessed?
     

3. Supply chain and ESG third-party risk management

A comprehensive ESG program isn’t limited to sustainability within your own operations – it also includes consideration of your supply and value chain and third-party risks. These risks can impact everything from brand reputation to product material sourcing to climate resiliency of your supply and value chain. An ESG platform with third-party sustainability risk management capabilities can help reduce supplier risk and ensure your vendors are aligned with your sustainability targets. It also improves accuracy, saves time, and reduces the effort required to track key metrics and achieve those targets. Key questions to ask include:

  1. Can supplier risk assessments be automated?
  2. Are there any pre-built templates to make vendor onboarding easier?
  3. How does third-party data exchange work?
  4. What mechanisms are in place to monitor and mitigate supplier risk?
     

4. ESG impact and action

While measurability key metrics is essential for any ESG program, impact against commitments is what sets the leaders apart. Trusted, sustainable brands not only commit to quantifiable goals, they also transparently report on progress toward those goals. Be sure to ask your ESG platform provider the following questions:

  1. How can I set improvement goals and track progress?
  2. What type of improvement options are available?
  3. What expertise does your team have in helping companies achieve improvement targets?
  4. Do you have examples of customers who have successfully achieved carbon reduction goals?

 

Sustainability management: Bringing it all together

Bringing key and other ESG metrics and performance data together to build an impactful story for your stakeholders is foundational to your reputation as a trusted organization. The right ESG platform can help you streamline this process and gain deeper insights into major risks and how your organization is performing against its targets. Check for these capabilities when choosing your sustainability management platform or software partner:

  • Position/strength in the ESG software space and team expertise
  • ESG capabilities included
  • Automated data management, reporting, and benchmarking
  • Standards and frameworks alignment
  • Customization options
  • Impact and action strategies and options
    Your Next Steps with ESG Reporting Software
    Hopefully this guide has shared some helpful questions you can use to determine the best technology partner to meet your ESG reporting needs and support you on your journey. And, of course, be sure to also consider important vendor intangibles like honesty, expertise, business ethics, and the quality of the relationship. Look for ESG technology partners who are truly invested in supporting you and your organization.
    • Do you get a say in the platform’s roadmap?
    • Where does your organization fall in that vendor’s overall priorities?
    • Who can you contact at the vendor to get advice and support from?
    • Can your ESG technology partner support you in other areas of your sustainability strategy and ESG implementation?
    • How strategic of a technology partner is this company within the context of my overall ESG reporting strategy?

 

  • These relationship aspects really matter.
    And finally, a word of caution. Given the ESG software space is so new, there’s a lot of hype and marketing around it. Ultimately, every company does marketing (including us), and it’s expected companies will try to position themselves in the best light. That said, be wary of buzzwords and marketing lingo like “Artificial Intelligence (AI)” and ask thoughtful questions. What does this AI actually do? Is it going assist me with a priority need or workflow?

  • Your Path Forward with ESG Reporting Software
    Armed with this framework, you’re poised to select the perfect technology partner for your ESG journey. Look beyond buzzwords and prioritize relationships built on integrity and expertise. Together, let’s illuminate the path towards a sustainable future.
    Remember, at GovEVA, we’re not just a software provider; we’re your partners in sustainability, committed to empowering data-driven decisions that shape a better tomorrow. Connect with us, and let’s embark on this transformative journey together.

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