Building an environmental, social, and governance, or ESG, report at a large enterprise is no small order, but leveraging an ESG software can help streamline the process.
The rapidly growing ESG space has created a new wave of tracking and reporting software solutions. There are a number of platforms on the market, including OneTrust, Novisto, Metrio, Workvia, Sphera, and Equilibrium (which is a part of FiscalNote, the parent company of Board.org).
A vast pool of options suggests that each enterprise can find the right tool for its specific needs — it also means that shopping for an ESG software is a task in itself.
The benefits of using an ESG platform
A recent Ernst & Young survey titled “How Finance Professionals are Helping to Advance ESG Reporting” suggests that ESG data collection and reporting is still a work in progress at many U.S. organizations.
The survey — which drew responses from 72 accounting officers at large brands — found that 55% of enterprises are housing ESG data in spreadsheets, meaning the reporting process is highly manual.
Yet, market demands are increasing, and new SEC regulations are on the horizon. As this field progresses, a system of manual data entry and tracking may not hold up.
Among those surveyed, just 8% said their companies had procedures in place to drive consistent application of ESG data and less than half had a plan to facilitate a review process.
Finding the right reporting software could allow your enterprise to automatically gather ESG data from multiple sources, analyze goals, and ensure the accuracy of your numbers.
As you begin to evaluate ESG softwares, what considerations should be on your checklist?
1. Will this software make the reporting process more efficient?
Patrick Elie, Chief Executive Officer at Metrio, outlined the important factors to consider while shopping for an ESG platform in an article for ESG Today. He suggested that the first question to ask yourself is, “Can the solution help you work more efficiently?”
In order to do this, Patrick explained that your software needs to support your entire reporting cycle from data collection to stakeholder communications, and eliminate complex or unproductive steps.
Brittany Brama, Principal Sustainability Program Manager at C.H. Robinson, recently shared this sentiment during an ESG & CSR Board panel discussion on ESG data. She explained how the organization came to select a newer platform, Hydruis.AI, for their reporting needs.
Brittany said visibility, traceability, and AI connections were critical during the evaluation process. It was equally important for the software to work well with the organization’s pre-existing systems.
“You just want to make sure that it fits within your process and makes less work for you rather than continuing to be just as cumbersome as what you were experiencing previously,” Brittany said.
2. Is this software customizable?
Brittany added that customization is another desirable element of an ESG platform, and she has appreciated the custom notes provided through Hydrus.AI.
Your platform should allow you to input specific data fields, custom views for different business units, and the KPIs you’ve attached to your ESG program.
3. Can this software ensure data quality?
Producing an ESG report is a useless endeavor if there are errors within your data. Consequently, it’s important that your software can cross-check the accuracy of your information.
4. Can this software evolve with my enterprise?
It’s no secret that the ESG space is rapidly evolving. From market changes to looming SEC requirements, you’ll want to ensure your software can adapt to the enterprise’s growing needs.
During the same ESG & CSR Board panel discussion, Claudia Lin, CSR Program Manager at NVIDIA, explained how the company is assessing its needs in light of these changes.
“We don’t have an ESG software yet, but we are keenly aware that we’re very likely to need one in the coming year,” Claudia said. “Right now our teams are really heads down working internally to understand what we need to comply with the SEC proposal, and that need is going to be our driver for selecting a software solution.”
5. What level of software support does this vendor provide?
Having a strong ESG platform is paramount, but if your software provider is unresponsive, then it’s lacking in value.
You’ll want a provider who will assist with implementation, provide an accurate timeline, answer questions in a timely manner, address issues, and inform you about new features they roll out.
6. What platforms are similar organizations using?
When it comes to selecting new software, it’s always helpful to consider the reviews of each platform. Often vendors will provide customer testimonials, but you know you’re not seeing the full scope of feedback.
With this challenge in mind, networking communities or conferences can be a great place to discuss your experiences with a platform. However, the vendors themselves can be present in these conversations, making it difficult to be candid.
One peer-to-peer community, the ESG & CSR Board, is completely vendor-free so leaders can openly share their first-hand experiences with ESG platforms and other vendors in the industry.
