Data collection and tracking for reporting sustainability information has become a necessary part of companies now. To increase the efficiency of the same, it's easier to use software that can do these functions automatically and provide analysis of Environmental, Social, and Governance (ESG) issues in the company. However, there are several softwares that adhere to various reporting standards like the BRSR, GRI, TCFD, SASB, etc available and it can be difficult to choose the best one to meet your company's needs. Here are some ways you can clarify your priorities and choose a software that caters to your company's needs.

Features of a best-in-class ESG reporting software

Broadly, what companies should look out for while comparing ESG reporting softwares should be the following:

• The software should be able to capture all your ESG data and shouldn't just focus on one or two parameters like carbon emissions or human rights etc.
• It should allow you to invite multiple collaborators from different departments, locations and business units to ease the data management process
• Your company could have more than thousands of ESG data points, the software should provide ways in the form of API integrations to integrate with your existing enterprise applications to automatically grab the relevant enterprise data, perform calculations on it and convert it into ESG data
• ESG data management isn't limited to your internal data, the software should also be a place for you to manage your supply chain sustainability policies and metrics
• It should provide a roadmap for ESG strategy development, providing the appropriate tools to collect, analyse and communicate the sustainability data collected
• It should provide Goal-tracking mechanisms to measure performance and identify weak spots in the operations. This can be done through various assessments and risk analysis
• It should be based on the latest reporting standards and frameworks so that different reporting requirements can be met. For example, the new standards of the ISSB should now be incorporated into softwares. However, since they are also formed with the help of other standards like TCFD, SASB, etc it will be easy. Lots of these frameworks and standards get updated and improved from time to time, so the software should always have the updated version of the framework or standard
• Sometimes companies have to create ESG reports for multiple stakeholders like investors, customers and regulators, the software should facilitate data collection once and then should handle segregating that data as per the required ESG report automatically
• And last but not the least, it should also provide you with the flexibility to create your own material topics so that you can create an ESG report as per your own requirements

ESG Reporting Software as per your company's need and maturity

Different companies have different needs from the softwares they install. Companies can be divided into three groups in terms of their experience with ESG reporting:

• Companies that are just starting out with their journey in reporting ESG metrics usually look for ESG reporting softwares so that the data can be collected, analysed, interpreted and used for disclosures. They look for assistance with identifying material information from the data collected and creating reports that highlight this information. They also look at getting services that help with stakeholder engagement, specific strategies, policy advisory, to help them better integrate ESG into the internal working of the company.
• Companies that have made the commitment to ESG reporting and are setting goals usually need software that can help them measure their progress. These companies require tracking systems such as Sustainability Goal Tracking or ESG Performance Monitoring, with several assessments, like ESG Risk assessments, Maturity Analysis, etc, to record and measure the success of their efforts. This will help them identify the weak spots in their interventions and act on them, increasing efficiency and effectiveness.
• Companies that have been in the reporting game for a while usually look for softwares that can perform advanced analysis and data collection. Data collection of Scope 3 emissions and supply chain sustainability is an example of the same. Here, companies will also look into the ESG compliance of their partners such as suppliers, through supply chain data management, supplier ESG assessments and performance management, and strategies to improve the same.

As companies progress in this order, the products and services that they subscribe to while using these softwares will need to keep upgrading. However, this can't happen immediately as it is gradual process of understanding one's company and its interaction with the three factors of E, S, and G.

Several software providers also provide training services, consulting, and maturity analysis, that can help the company use the softwares according to their needs and sustainability maturity. The ESG spectrum keeps changing. Thus there is a need to constantly be updated and be aware of the changes and new developments happening. Training in topics ranging from the various reporting standards to human resource and business ethics training to employees, suppliers, etc. These training integrate all stakeholders of the company into becoming more sustainable. Surveys and reports on Board efficiency and engagement can promote good governance.

Selecting a software is crucial to integrating technology into ESG compliance. This can help in increasing the efficiency of the company and help the company adapt to the rapid changes happening in the environment and society. These players of the economies can attract investors through their ESG reporting and need this integration more than ever to survive sustainably.

If you're looking for an ESG software, we'd love to speak with you. We've built the Oren Sustainability Hub to cater to companies across all stages of the sustainability maturity cycle. You can manage your internal ESG data and supply chain ESG data and automatically create reports as per any reporting standard or customer or investor standard of your choice. Click on the button below to set up a free consultation call with our sustainability strategists.