Ultimate guide to choosing the right ESG software.

As businesses increasingly integrate ESG considerations into their operations, the market for ESG tools has exploded. Verdantix predicts the ESG reporting software market will grow to $4.34 billion by 2027, and the supply chain sustainability software market will grow to $7.7 billion by 2029. With so many options, each boasting unique features and benefits, how can companies select the solution that aligns best with their goals and values? 

Choosing the right ESG software is not just a technical decision—it’s a strategic one that can significantly impact your organization's reputation and regulatory standing. It can also help you save time, collect accurate data, and engage more effectively with stakeholders. This guide covers ESG software benefits, types of solutions, and how to choose the right one for your business. 

Benefits of implementing ESG software

Like other software solutions, ESG software aims to simplify tasks for organizations and practitioners. It does this by streamlining the management of ESG program responsibilities. With new regulations increasingly requiring companies to disclose more rigorous ESG data, many companies are discovering that internal tools are no longer adequate. For example, the EU Corporate Sustainability Reporting Directive (CSRD) has 86 disclosure requirements and more than 1,000 data points that companies need to report against, according to Verdantix. And ESG practitioners realize the challenge they are facing—87% say they find it difficult to adapt their reporting processes to new regulations in a recent Workiva survey. 

In this context, it’s not surprising that virtually all professionals in the survey—more than 95%—view ESG software as essential. They use it to automate and streamline data collection, analysis, and reporting, which reduces errors and saves time while enhancing transparency and credibility with stakeholders. Additional benefits include improved stakeholder engagement, compliance, and risk management, as well as actionable insights for better decision-making. 

Understanding ESG software

But what is ESG software? In fact, it includes a wide range of solutions that help organizations manage, report on, and improve their environmental, social, and governance practices. While there may be some overlap in features, such as reporting or carbon accounting, most ESG applications specialize in a few areas. This focus is necessary given the complexity of covering all ESG topics, regulations, and standards within a single platform. Here’s a sample of topics:

Environmental

• Emissions
• Product Carbon Footprint
• Climate Change Risk
• Financing Environmental Impact
• Natural Resources Impacts and Usage
• Raw Material Sourcing
• Waste
• Energy
• Recycling

Adding ESG disclosure standards and regulations to this list significantly expands the complexity. Currently, over 5,000 climate laws and policies, along with 3,078 ESG reporting requirements, can affect how companies need to disclose sustainability matters. 

Typical ESG software uses

Given the breadth of ESG topics, it’s understandable that certain areas, like data security or accounting standards, are often classified under different software categories. Below are typical ESG functions and their example solutions.

Supply Chain Sustainability:

• Description: Enables the assessment and management of sustainable practices across the supply chain.
• Example solutions: EcoVadis, Resilinc, Sphera / SupplyShift, IntegrityNext

Most ESG software also includes features that underpin these core functions. Examples include automated data collection and management, analytics, goal setting, and progress tracking. 

Additionally, some ESG platforms include advanced features like stakeholder engagement and scenario planning. For example, Microsoft’s Sustainability Manager includes a what-if analysis feature that allows organizations to forecast long-term impacts on their carbon emissions by simulating changes in their business practices. 

Other ESG solutions

While not always included in ESG software, these adjacent areas are sometimes part of platforms that support multiple areas, such as ESG reporting and environment, health & safety (EHS). 

Environment, health, and safety (EHS): 

• Ensures workplace safety and regulatory compliance.
• Example solutions: Enablon, Intelex, VelocityEHS, Cority, Quentic

Investor relations / ESG ratings: 

• Evaluates companies' ESG performance, primarily for investors. 
• Example solutions: MSCI ESG Manager, Sustainalytics, Clarity AI, Nasdaq ESG Data Hub 

Product lifecycle assessment (LCA) and management (PLM): 

• Analyzes and tracks the environmental impact of products throughout their lifecycle. 
• Example solutions: Sphera, SimaPro, openLCA, Ecochain Mobius

Risk management focusing on ESG factors: 

• Identifies risks and potential mitigations associated with ESG factors.
• Example solutions: Datamaran, Cority Risk Management, ProcessMAP, RepRisk, Integrity Next

Biodiversity and natural capital management: 

• Supports the assessment of impacts and dependencies on natural capital and biodiversity for companies and investors.
• Example solutions: NatureMetrics, Capitals Coalition, IUCN STAR metric

Climate action / carbon credits: 

Example solutions: Cloverly, Pachama, Nori

Allows companies to buy / sell, track, and manage carbon credits, thereby facilitating investment into climate action initiatives.

How to choose the right ESG software for your business

Now that we’ve explored the various types of ESG software, we’ll cover the practical steps for finding the right solution. Similar to opening a new market for your business, you want something that works well with your particular goals and capabilities. Start by mapping out what’s essential for your business and stakeholders—what do you need to achieve with your sustainability program and why? A materiality assessment can help you identify these requirements. 

Next, take a look at your existing systems to see what can support these needs and where you might have gaps. Once you’ve clarified your priorities, evaluate different ESG software options by focusing on the features important to you across a consistent set of criteria. 

For instance, what is the customer feedback (how positive is it), does it integrate well with your existing systems, and how secure and reliable is it? If regulatory compliance is a factor, then depth of industry experience and location may also be important considerations. Pay attention to the support and training offered, as well as the pricing model—is it a one-time fee or subscription, are there any additional costs, and is a free trial period included? 

Finally, ensure that the solution can scale with you and adapt as your ESG needs evolve. 

Case study: After implementing ESG software from Microsoft, World Wide Technology reduced the time spent on carbon emissions calculations by 20%.

Case study: By moving 2,500 Excel files across 25 business units to the Workiva ESG software, Cornerstone Building Brands saved more than $1 million in SOX consultant fees and reduced time spent on each control by 77%.

Elevate your ESG impact with Aquent

Choosing the right ESG software is a smart move that can help boost your company’s sustainability efforts and reputation. It can save time, enhance compliance, increase transparency, and strengthen ties with everyone who interacts with your company. By understanding your needs and weighing the options carefully, you can select a platform that moves your ESG initiatives forward. 

At Aquent, we help businesses implement effective ESG strategies with the talent they need to thrive. Our sustainability experts can help you find the right ESG software for your company that fits well with your goals and existing systems. With our industry expertise and commitment to sustainability, we're here to help you achieve your ESG goals efficiently and effectively.

Looking to bolster your sustainability efforts? Aquent Sustainability is here to help. Whether you're building an in-house Sustainability Team or need an expert to advise on best practices, our sustainability recruitment and consulting services help companies grow their impact. Get in touch.

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