Why companies serious about ESG are using software as a strategy

In today's rapidly evolving business landscape, environmental, social, and governance (ESG) considerations have become critical factors for companies striving for long-term success and sustainability.

An ESG software, also known as ESG reporting software, plays a pivotal role in this endeavor. This digital solution empowers organisations to effectively collect, analyse, and report on their ESG data and performance.

In this article, you will lean about the meaning of an ESG software for your company.

ESG Software: Streamlining Sustainability Management and Reporting

Companies are using technology to address the number one challenge for ESG. Like, artificial intelligence is being deployed for custom ad targeting and personalisation in marketing strategies. There is plenty of untapped potential in leveraging data analytics for ESG management and reporting.

Enterprise software technology has evolved to capture social and environmental dimensions that differ from financial value indicators. Data management software not only helps to report organisations meet disclosure requirements. They are also a tool to track and monitor progress on established targets and goals.

ESG software provides the analytical foundation for understanding areas of strengths and weaknesses in your overarching ESG programme. They can be an indispensable tool for an organisation to manage sustainability risks and performance.

Companies have transitioned from manual data processes to a data management software for the following purposes:

• Streamline data collection and simplify the reporting process
• Automate routine tasks and redirect resources to other high-value operations
• Data-driven insights which you can use to refine ESG strategies
• Reduce the margin of error and align with disclosure requirements
• Achieve a level of transparency by ensuring data is traceable and auditable
• Aggregate data across your operations and value chain in dashboard view and even generate reports in one click

How to choose an ESG data software

The market for ESG software is developing fast in tandem with the rise in disclosure legislation and investor pressure. In the U.S., that market is projected to grow at a CAGR of 15.8% from 2021 to 2031. Before you invest in a software, ensure it can support your reporting goals and ESG plans. Look out especially for these capabilities:

• Comprehensive parameters – Robust system to capture a vast array of data as diverse as Environmental, Health & Safety, modern slavery, governance integrity, climate risks, and the wide range of ESG indicators for your industry as well as Key Performance Indicators. The underlying software capabilities should be able to analyse the data to generate insights that can inform decision-making and compliance assessments.
• Protection of sensitive information – Enables transparency between stakeholders while maintaining confidentiality of business-critical information.
• Stakeholder management – Facilitates requests for information with stakeholders. Ideally, the system would be able to store and organise a repository of your stakeholders, allowing you to manage requests and respond on a single interface.
• Compatibility with existing enterprise software systems – openAPI integration with internal and external ecosystem architecture and your enterprise resource planning software. The system should be able to seamlessly connect with third-party software such as emissions calculators and supply chain tracking systems.
• Alignment with reporting standards – Supports parameters that are in compliance with your chosen disclosure standards and legislative requirements. The software should match the quality of your disclosures against reporting criteria. Additional prompts and guidance on meeting those parameters would also be useful.

Building a sound ESG plan that is grounded in data requires significant investment, but it pays off in the long run. Companies that use software to manage their ESG data are doing so not as a tactical solution, but rather a strategy to propel their ESG plans forward. Organisations that are serious about ESG benefit tremendously from leveraging the potential of artificial intelligence and data analytics. It may be time to swap that Excel sheet with a more powerful automated solution.

How we help you

• We simplify the collection of ESG data in your organisation by offering one central platform and integrations into ERP, HRM, CRM, EMS etc., to automate data collection.
• We help you complete the information requests from regulators or investors and guarantee the protection of business-critical information.
• We automate the collection of relevant data internally and simplify the collection of data across the supply chain, increasing efficiency and saving effort.
• We can generate your report in the correct format at the touch of a few buttons once the data has been collected.