The following are 20 key features that must be in ESG software for the software to be valuable, according to Speeki. When looking for ESG management software, you should review the offerings against this list.
When we say ESG software we are talking about software that manages ESG and reports ESG, not simply a point-to-point solution or some form of simple ESG calculator that is nothing more than a glorified spreadsheet. An ESG management system should be a comprehensive suite of tools and reporting mechanisms to automate ESG and get a return on your ESG investment.
- Data collection and analysis
The software should be able to collect data on various ESG metrics. In most programmes, this is done by manually entering the data, importing it from more specialist solutions through APIs, or using survey tools, declaration systems and disclosure reports. The software should also be able to receive reports on misconduct, feedback or ESG-related incidents, and analyse this data to identify trends, track progress and identify areas for improvement.
- Reporting and compliance
The software should be able to automate the reporting and compliance process for ESG programmes according to multiple standards. This can save businesses time and money and help ensure that they meet their ESG reporting obligations as they arise in different countries. The reporting should be done in a way that allows new reporting formats to be added to the system without having to re-engineer it. The data that will be used for reporting should be able to be tagged so it can easily be added to the right places in the correct reports.
- Risk management
The software should be able to identify and mitigate ESG risks. For example, by having a facility for conducting importance or materiality assessments (with user input), the platform should be able to track and assess the environmental risks associated with a business’s operations and identify and manage the social risks associated with its supply chain.
- Communication and engagement
The software should be able to communicate and engage with stakeholders about ESG programmes. For example, businesses can use the software to send emails to stakeholders, including employees and interested groups. These emails should be able to be tracked (e.g. whether they were opened, reviewed and commented on) and assessed.
- Supply chain due diligence
The software should be able to track and trace a business’s supply chain and identify and manage ESG risks associated with its suppliers. It should be able to collect information from suppliers through questionnaires and conduct due diligence in various formats, including simple screening and reviews of media and social media to look for red flags. The system should also conduct deeper due diligence using AI tools or external research.
- Whistleblowing and incident management
The software needs an incident management system to receive reports and conduct triage and investigations. Reports need to be able to be received in any language, using any device and from anywhere in the world. The software must have the flexibility to allow reporters to remain anonymous. It must also be able to engage with the reporter in real time in any language using any device.
- Data visualisation
The software should be able to visualise ESG data in a way that is easy to understand and interpret. At the very least, it should allow users to extract data so that it can be seen in other tools like Power BI or Tableau. While data visualisation in the platform is useful, being able to extract the data and consolidate it with data from other platforms in a central location is even better.
The software should provide dashboards that allow users to track progress towards ESG goals, identify areas for improvement and monitor compliance. The dashboards should be across multiple ESG areas and enable data to be separated into discrete groups (e.g. key risk areas).
The software should be configurable to meet the specific needs of each business. This means it needs to be flexible enough to change which key areas are considered as part of ESG and be able to track an increasing list of key ESG areas as they are developed. The company should be able to define its own ESG areas and customise how the system is managed.
The software should be secure to protect sensitive ESG data. The company that provides the software should be ISO 27001 certified by a reputable accredited certification body. The certification should apply to the development and hosting of the software and access by users. The system should have two-factor authentication and impose strict log-in conditions.
The software should be scalable to accommodate the growth of a business. Much of this comes down to the hosting and location of the server infrastructure, but the scalability of the coding is also important. Look for a platform that was built in the last few years and is therefore likely to have updated code that can scale to its surrounding data needs.
The software should be cloud-based to allow users to access it from anywhere. This should be obvious for most companies as SaaS solutions are now very much the norm and part of every business. For those companies that have unique security or access needs, on-site hosting might be possible for an additional cost.
- User friendly
The software should be user friendly to make it easy for users to collect, analyse and report on ESG data. It must have a clean interface that is easy to navigate with minimal instruction and training. If training
- Cost effective
The software should be cost effective to make it affordable for businesses of all sizes. The pricing model should reflect the fact that companies are of different sizes and from various industries so will use the system differently. The pricing should be annual and all-inclusive, and include hosting, support and basic installation, as well as offer the flexibility to exit the contract after two or three years.
The software should be hosted at a reputable hosting facility that provides some assurance of uptime availability to guarantee that it is available whenever users need it. While not often embedded into the contractual provisions, it is important to be aware of uptime commitments.
The software provider should provide support to ensure users get the most out of it. The support should be available online, through the help areas of the software itself and also by email, phone and chat. These services depend on the providing company itself and what it can offer in the time zone where you are located. Always ask where the support team are located, how much access they have to your environment and whether they can access confidential data.
The software should be innovative to keep up with the latest ESG trends. The updates should be regular, with at least one major update per quarter and other updates more regularly for smaller matters. These updates should be communicated within the platform and easily seen by users.
These days there are several good-quality hosting providers, and any SaaS solution should be hosted at one of these main providers. The hosting should be open to your region and consider any concerns you have over data access and data privacy. In most cases, it is easier to host data in and support the software from Europe. The data should always be encrypted on the servers and in transit.
- Future development
It is important that companies look to the software to provide a path to develop their own ESG initiatives. A software provider should provide a roadmap for their solution and where they are heading in the next 12, 24 and 36 months. While some companies will not provide any fixed dates, you do need some visibility over the development initiatives and which direction the software is heading in.
- Content expertise
Most importantly, choose a company that has some content expertise; you want a strong consulting or assurance practice and not just a technology provider. Technology will only go part of the way to build solutions to address ESG, so you will always need consulting and technical support. It is a good idea to have this from the provider rather than a third party that is not experienced with the software.
These are just some key features that must be in ESG software. The specific features that are most important for a particular business will depend on its size, industry and ESG goals. However, all businesses that are serious about ESG should consider investing in ESG software that can help them manage their ESG programmes effectively.
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