Over the past three years, there has been a significant rise in ESG disclosure policies, escalating from 614 in 2020 to 1225 in 2023. This surge in regulations underscores a growing demand from investors for heightened transparency and accountability, positioning ESG reporting as a critical investment for companies aiming to strengthen long-term viability and market position.
As nearly 50,000 companies prepare to report on the new CSRD, traditional methods of ESG reporting, often reliant on the trusty but cumbersome Excel sheets, are being pushed to their limits. Modern companies use ESG software to pilot their strategy.
What is ESG software?
In the past, many companies used spreadsheets to handle ESG reporting, but this was slow, prone to errors and impossible to scale. Digital tools for ESG reporting change the game by offering faster, more accurate, and scalable solutions to achieve better performance and comply with regulations.
To illustrate, here are some use cases that modern sustainability teams usually cover with these tools:
- Carbon footprint calculation and analysis
- Compliance with ESG reporting framework
- Double materiality assessment
- Progress tracking towards ESG performance goals
- Sustainability action planning
Top 12 ESG software on the market
Plan A
As a leader in the carbon accounting software industry, Plan A enhances ESG reporting by focusing on the environmental aspect with its carbon management platform. By automating carbon accounting across all Scopes, Plan A helps companies efficiently manage and report their carbon footprint, a key part of ESG reporting. Their calculation methodology is TÜV-certified for their compliance with the GHG Protocol, ensuring reliable emissions data for impactful decarbonisation.
For CSRD reporting, Plan A’s dedicated CSRD Manager software guides companies through the compliance process, from data collection to simplified reporting. Backed by expert services, businesses can seamlessly meet CSRD requirements while improving both their environmental and overall ESG performance.
Workday
Workday offers an enterprise management cloud platform that includes ESG reporting capabilities within its broader suite of financial and HR solutions. The platform aims to help organisations streamline their ESG data collection and reporting processes, integrating sustainability metrics with other business data for a comprehensive view.
Workiva
Workiva provides a cloud-based platform for connected reporting and compliance, which includes tools for ESG reporting. Their solution focuses on helping companies collect, manage, and report ESG data, with features designed to support various reporting frameworks and standards.
Benchmark Gensuite
Benchmark Gensuite offers ESG reporting software as part of its broader environmental, health, and safety (EHS) management suite. The platform is designed to help companies compile investment-grade ESG data, drive action towards sustainability commitments, and deliver results aligned with performance targets.
Lucanet
Lucanet's ESG reporting solution aims to simplify the ESG reporting process by providing tools for data collection, analysis, and report production. The software includes features such as pre-built templates aligned with global standards, automated data collection, and integration with financial reporting processes.
IBM Envizi
IBM Envizi ESG Suite is designed to automate the capture and management of ESG data into a single system of record. The platform focuses on calculating greenhouse gas emissions, streamlining sustainability reporting and disclosure, and identifying decarbonisation opportunities.
Fairly Made
Fairly Made specialises in traceability and impact measurement for the fashion industry. Their platform helps brands trace their supply chains, measure the environmental and social impact of their products, and communicate this information to consumers through QR codes and widgets.
SustainIQ
SustainIQ offers an ESG reporting platform that focuses on four pillars: Responsible Procurement, Environmental Management, People, Health & Diversity, and Community Engagement & Partnering. The software allows users to report on over 200 metrics across these areas, providing real-time data collection and reporting capabilities for various ESG aspects, including GHG emissions, waste management, and social value
KEY ESG
KEY ESG provides a comprehensive ESG software solution that aims to streamline the ESG reporting process for businesses across industries. The platform offers features such as a metric library aligned with major ESG frameworks and regulations, data visualisation tools, and target-setting capabilities. KEY ESG emphasises its ability to integrate with existing business systems and its continuous updates to stay current with global ESG regulations
Novata
Novata specialises in sustainability software for private markets, offering a framework builder that helps companies determine which ESG data to collect. The platform provides access to commonly used frameworks and widely used metrics, simplifying the process of ESG data collection and reporting. Novata also offers data visualisation tools to highlight relevant ESG insights and flexible reporting options.
MSCI
MSCI, a leading provider of investment decision support tools, offers ESG solutions that include data, research, and analytics to help investors integrate ESG factors into their investment processes. Their ESG tool likely focuses on providing ESG ratings, research, and portfolio analysis tools for investment professionals.
AuditBoard
AuditBoard's ESG software centralises data collection, automates manual tasks, and simplifies framework reporting. The platform aims to ensure data accuracy and streamline the ESG reporting process, offering a comprehensive solution for companies looking to manage their ESG initiatives and reporting requirements.
The benefits of ESG software
Using software for ESG management comes with these 6 key advantages:
Now that the benefits of ESG software are clear, let’s dive into the steps you should take to choose the most suitable software for your company.
How to choose the best ESG software for your company?
To evaluate ESG software options effectively, consider the following steps:
- Know your needs: Identify your specific ESG goals. Do you need help with transparency? Compliance? Tracking carbon emissions?
- Read user reviews: See what other users say about the software’s ease of use and effectiveness.
- Consider cost: Analyse the cost implications of the software, including initial investment and ongoing subscription fees.
- Evaluate customer support: Determine the level of customer support provided, ensuring that assistance is available when needed.
The right software should grow with your company and adapt to future ESG needs.
Key features of ESG reporting software include:
Comprehensive data collection features, enabling the gathering of ESG metrics throughout the organisation
Advanced analytics to identify performance trends, supporting informed decision-making
Customisable reporting templates, which produce reports that comply with global standards and regulations
Integrations with existing business systems to ensure consistent and efficient ESG data management across the company
Dive deeper into the comprehensive ESG reporting process with our dedicated article.
The future of software for improved ESG and sustainability performance
Key trends for the future include:
- Regulatory push and standardisation: Frameworks like CSRD and ESRS will require improved sustainability reporting. ESG tools will adapt to ensure compliance and simplify reporting processes.
- Advanced data analytics and AI: AI will automate reporting, handle large datasets, and enhance sustainability assessments, particularly in tracking Scope 3 emissions across supply chains (Ahmad et al., 2023).
- Real-time monitoring and blockchain: Real-time data integration will allow continuous environmental monitoring, while blockchain will boost transparency and traceability in supply chains (Olanrewaju et al., 2024).
- Improved user experience: User interfaces will become more intuitive and efficient, making the software quicker and more enjoyable to use, and increasing productivity across teams.
- Collaboration and stakeholder engagement: Future ESG software will ease the challenge of managing Scope 3 emissions, improve data transparency, and facilitate collaboration across the value chain for more effective sustainability efforts (Almadadha, 2024).
As regulations grow more complex, cutting-edge technology will play a crucial role in driving sustainable business practices.
Ready to transform your ESG strategy through accurate carbon accounting and ambitious decarbonisation? Schedule a call with Plan A experts today and take a decisive step towards sustainable success.
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