The market of ESG software providers has grown and currently over 200 providers offer these services.
Data management is critical to get your ESG/Sustainability journey off to a great start. With increasing sustainability reporting requirements (CSRD, SIC, sectoral reporting under GRI, SASB, just to name a few of the standards), stricter carbon accounting rules, requirements to establish science-based targets, and undergo strict external audit, companies cannot deal with this effectively without software.
How do we know this?
First of all, you need to look at it jointly with your strategy for corporate sustainability development and reporting, as well as local and international regulatory requirements for reporting. You might be able to use software you work with in other fields – financial or operational management, or procurement.
At AvantGarde our goal is to help you make the best choice when selecting your ESG/carbon accounting software to save time and money and spare your efforts for real sustainability actions.
Maintenance in accordance with the development of reporting and accounting standards
Here are some main features to pay attention to when searching for ESG software:
We helped corporations, among which are some of the largest in their respective countries, to select ESG software that corresponds to their criteria, to customize software functions in accordance with company needs, and to ensure that the software is operating properly.
Compatibility with your existing operating systems
Interface options with external data and information receivers, such as ESG rating agencies
Coverage in the range of data sources for GHG accounting, which is especially important for Scope 3 emissions
Quality control of the collected data
Please get in touch to know more on how we can assess your needs, identify where you stand and elaborate action plan to digitalize your sustainability journey.
User-friendliness and clarity of dashboards and reporting
Ability to customise according to the company’s needs
So, how to select the best for you?
You will need to investigate if it is possible to customize it to meet your reporting and strategy management needs. It will also need to meet the specifics of your value chain and operational process to generate carbon accounting in accordance with international standards. And last, but not least, as companies are more and more exposed to scoring by ESG rating agencies, software solutions provide more and more interface possibilities with the ESG rating agencies.
5 Myths About ESG Software
There is no single software solution that can solve all sustainability reporting and carbon accounting needs. Rather, it is a tool that needs to be used correctly and efficiently. Think of it like a food processor in a kitchen—the results will vary based on the skill of the user. The software process involves collecting, sorting, manipulating, analyzing data, and presenting reports. It simplifies the process and reduces errors when compared to traditional Excel spreadsheets. However, it requires proper management to be effective.
A single software can solve everything in sustainability reporting and carbon accounting
With more than 200 providers in the market, the cost of software is becoming increasingly competitive and affordable. As with any technology, the cost of development decreases as economies of scale optimize its configuration, and growing demand combined with intense competition among producers drives the price down. Compared to the cost of labour per hour in a company required to collect information and data in a traditional way and then the time required to correct errors, the cost of software is much lower and guarantees efficient work.
It is expensive
While it's not mandatory, it's highly desirable for all designated participants in the information and data-gathering process to use the software. This makes it easier to track, archive, collaborate, and peer-review the information in real time. It's possible to designate only a few focal points responsible for the process, but it's more effective if the adoption of such software is incorporated as part of the digitalization process in business management.
Too many people have to get involved in working with software
Not the case. This is particularly important, especially considering that the new EU directive on corporate reporting (CSRD) applies to small and medium-sized enterprises with more than 10 employees. It requires the collection of around 2,000 data points, which must be kept in a digital format and undergo a rigorous process of external audit.
Such software is needed only by big companies
The same EU directive requires businesses to collect and monitor ESG information from their suppliers, which could easily account for over 100 suppliers even for a medium-sized company. Additionally, to generate the lifecycle carbon footprint of a product (which is increasingly requested by consumers), you need to know where all your goods go and what happens to them at the end of their life. This could involve thousands of goods you trade or thousands of clients you provide services to who also want to know the carbon impact of your service.
Software is only for manufacturing producers, not for retailers or service providers