Best ESG Software in 2024

What is ESG Software?

ESG Stands for Environmental, Social, and Governance. It is a set of parameters that is used to evaluate companies’ broader contributions to the world and people, apart from their financial returns. To manage their social and environmental performance, businesses use ESG software. 

ESG software or sometimes called ESG reporting software, is a tool designed to help businesses measure, report, and improve their performance on ESG (Environmental, Social & Governance) criteria. This software provides a structured framework to collect data related to a company's carbon footprint, water usage, wastage production, labor practices, corporate governance standards, and other relevant metrics. 

Furthermore, by using ESG software, companies can monitor their own progress in these areas and compare their performance against industry standards or competitors. This is crucial for identifying areas of improvement and making informed decisions that align with both business goals and sustainability objectives.  

Why Use ESG software?

By using ESG software, Businesses can improve their data collection and reporting, attract investors, and make better decisions. Here’s some of the key benefits of using ESG software. 

1. Simple Data Collection and Reporting: As we know, manual data collection for ESG reports can be time-consuming and error prone. ESG software automates data collection from various sources, centralizes it in one location, and simplifies the reporting process. This not only reduces the burden on internal teams but also ensures data consistency and accuracy. 
2. Better Data Analysis and Transparency: ESG software also helps in analyzing the collected ESG data to identify areas for improvement and track progress towards sustainability goals. It can generate reports that are compliant with various ESG frameworks, enhancing transparency for stakeholders like investors and regulators. 
3. Increased Stakeholder Engagement: By demonstrating a commitment to ESG principles and transparent reporting, organizations can build trust and improve relationships with stakeholders like investors, customers, and employees who increasingly value sustainability efforts. 
4. Improved Decision-Making: Data-driven insights from ESG software can ensure strategic decision-making. Organizations can identify areas where they can reduce their environmental footprint, improve social responsibility, and enhance corporate governance practices.
5. Risk Management and Regulatory Compliance: ESG data management software can help organizations identify and manage ESG-related risks, such as climate change regulations or ethical sourcing concerns. It can also streamline compliance with evolving ESG reporting requirements. 
6. Improved Brand Reputation: A strong ESG performance can enhance brand reputation and attract environmentally and socially conscious consumers and investors. Moreover, incorporating ESG principles into business can help organizations stay ahead of their competitors. 

Must Have Features of ESG Software

Here are some of the must-have features in ESG software to streamline environmental, social, and governance (ESG) data management, reporting, and overall sustainability efforts: 

1. Reporting Capabilities: One feature that every ESG software must include is reporting and analytics. The software should offer robust reporting features such as preconfigured KPIs, templates, and the ability to manage user roles, rights, and tasks related to ESG reporting. Moreover, it also helps in conducting double materiality, climate risk analysis and provides better control over your data on dashboards.
2. Flexible Data Management: ESG reporting tools should allow flexible management of ESG data, including the ability to choose relevant modules and scale as the business grows. It should support various options for data import and management, including manual entry, automation, and integration with ERP systems. 
3. Compliance Assurance: Another must-have feature for ESG reporting platform is ensuring compliance with regulatory frameworks. It should assist in monitoring compliance with relevant regulations, standards, and guidelines related to ESG reporting and disclosure, such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and Task Force on Climate-related Financial Disclosures (TCFD). 
4. Benchmarking and Comparison: ESG software should enable benchmarking against industry peers and best practices to identify areas for improvement and set meaningful targets. Comparative analysis can help companies understand their relative performance and identify leading practices. 
5. Support for Complex Organizational Structures: For organizations with complex structures, the software should offer features such as support for unlimited business units, multi-language and multi-currency support, consolidation functions for groups, and efficient management of user roles, rights, and tasks. 
6. Customization and Individualization: The software should provide options for both pre-configuration and individualization. It should offer predefined KPIs, report templates, and guidance while also allowing customization to align with company standards and requirements. 
7. Portfolio Management: For private equity firms or organizations managing portfolios, the software should enable tracking of sustainability performance across portfolio companies. It should support multiple users per entity, additional and customizable KPIs, and data filtering and aggregation at various levels. 

What are the Most Common ESG Models?

Common ESG models are the Triple Bottom Line Model, Balanced Scorecard Model, Environmental Management System Model, Corporate Social Responsibility Model, and Sustainability Reporting Framework model. These ESG models serve as frameworks for organizations to integrate environmental, social, and governance factors into their business operations and decision-making processes. These are some of the most common models of ESG in detail: 

1. Triple Bottom Line (TBL) Model: This model emphasizes three main dimensions of performance: economic, social, and environmental. It encourages organizations to measure success not only by financial profit but also by their impact on people and the planet. Previously, businesses used to focus solely on their financial performance, or the "bottom line." TBL broadens this perspective to consider a company's impact on society and the environment alongside its profits. 
2. Balanced Scorecard (BSC) Model: Originally developed for strategic performance management, the BSC has been adapted to include ESG metrics. It provides a balanced view of organizational performance across financial, customer, internal processes, and learning and growth perspectives. This allows companies to align ESG goals with overall strategic objectives. 
3. Environmental Management System (EMS) Model: EMS focuses specifically on environmental sustainability and helps organizations identify, monitor, and manage their environmental impacts. It also helps organizations comply with environmental regulations and enhances a company's reputation for sustainability. 
4. Corporate Social Responsibility (CSR) Model: CSR encompasses a broad range of activities through which companies demonstrate their commitment to ethical behavior, social well-being, and environmental stewardship. CSR initiatives often include community engagement, philanthropy, ethical sourcing, and environmental conservation efforts. 
5. Sustainability Reporting Framework (SRF) Model: This model provides guidelines and standards for organizations to report on their sustainability performance transparently. Common frameworks include the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), which help companies disclose ESG-related information in a consistent manner. 

How to Choose the Right ESG software?

Selecting the appropriate ESG (Environmental, Social, and Governance) software for your business is important and needs a broader approach beyond environmental tracking.  

So, while looking for ESG reporting software, you should consider its capacity to address social impact initiatives, workplace safety, and governance compliance. Then, identify your specific needs and goals regarding ESG management. Determine the scope of data you intend to collect and analyze, considering factors like carbon emission, diversity, labor practices, and community engagement.  

Next, assess the software's capabilities in data collection, analysis, and reporting. Look for features such as customizable reporting templates, real-time data monitoring, and integration with existing systems. Consider the scalability and flexibility of the software to accommodate your company's growth and evolving ESG requirements.  

Additionally, evaluate the software provider's reputation, track record, and client reviews for reliability and support. Ensure that the software complies with industry standards and regulations to maintain transparency and credibility in ESG reporting. 

Top 10 ESG software Comparison  

Here is a comparison table of the best ESG software along with their key features and pricing plans;

Best ESG Software Comparison
Softwares	Features	ESG Software Pricing
Updapt	Sustainability data management, Validate, Trace and Audit data, Track and measure GHG emissions, Create custom ESG reports for your business, Peer analysis support, Get detailed insights on data-based indicators	Available on request
SAP ESG	ESG data collection and management, ESG performance tracking and analytics, Compliance and risk management, Stakeholder engagement and transparency, Enhanced sustainability and performance, Streamlined reporting and compliance	Available on request
Breathe ESG	Comprehensive ESG reporting, ESG reporting across multiple frameworks like GRI, SASB, BRSR, WEF, CDP, TCFD, Materiality assessment, Data management dashboard, Robust data security	Available on request
Diligent ESG	Automate ESG monitoring & notifications, Dynamic reporting & platform integration, One-click report generation, Tailored dashboards and reports, Instantly generate sustainability & carbon reports	Available on request
IBM Envizi	Automatic data capture, Available in seven languages, Data normalization and harmonization, Data audits and health checks, Connectivity to operational system, Data structuring and hierarchy management	Starts at $2500/month
PwC ESG Management	Provides a robust procedure to define, collect & process data, Data process and analysis, Data insight and disclosure, Dynamic dashboard visualization, Generate customized ESG reports, Real-time monitoring of project workflow	Available on request
Conservice ESG	Automate utility and ESG data across your organization, Create dashboards to track CSR initiatives, Analyze your consumption & identify opportunities for improvement, Monitor, correlate, and share, Powerful cloud-based platform	Available on request
Novata ESG	Supports selecting ESG metrics, Collect ESG data with multi-user platform, Reporting and, action planning, Collect, report, and benchmark data in one platform, Better flexibility to add unique metrics material, Metrics building blocks	Available on request
Riskonnect	Audit management, Compliance engine, Materiality assessments, Program management, Supplier scorecards, Dashboards & analytics, Better visibility into Your supply chain	Available on request
Workiva	Assured integrated reporting, Financial statement automation, Management reporting, Solutions for audit, Risk & compliance, Operationalize your ESG strategy, Enhance cross-team workflow, Solutions tailored for your specific needs	Available on request

How Much Does ESG Platform Cost? 

The cost of ESG reporting platforms can vary depending on factors such as features, functionalities, and scalability options. Entry-level solutions may start at a few hundred dollars per month, while enterprise-grade platforms with advanced functionalities can cost thousands or more. Furthermore, software customization, training, and ongoing support also contribute to overall expenses. So, it's essential for you to assess your specific needs and budget before selecting an ESG solution.