Impacts, Risks, and Opportunities (IRO) for CSRD Reporting
1 min
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In this article, we’ll break down what IROs are, how to identify and assess them, and what CSRD requires in terms of disclosure.
The voice of impact
ESG / CSR
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Our Top 4 ESG Softwares
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Climate change has, and will continue, to make starting and maintaining a business more challenging than ever before – which is why many companies seek the help of third-party assistance to help them better understand ESG data and risk management, such as ESG reporting software and ESG reporting solutions.
ESG software is a valuable tool that can help to lessen the stress on companies seeking to ensure they maintain a well-rounded business set up for long-term success by helping to provide them with improved data collection and auditable ESG data.
However, it can prove difficult for your company to choose the right ESG software when there are so many options on the market – as streamlined reporting and ESG reporting capabilities are bound to vary by platform.
In this article, we’ll review what ESG software is, why it is important, and our top 5 ESG softwares to help make your decision a little easier.
What is ESG software?
ESG software refers to the type of software often used by businesses to help monitor, measure, and manage their ESG performance.
“ Think of an app that tracks how many steps you take per day. If you have a goal of how many steps you’d like to take everyday, it is paramount that you keep a log of your current activity in order to develop new ideas to increase your step count. The same goes for any goal, including seeking to improve your company’s ESG criteria. ”
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ESG software is used to gather valuable data for companies in regards to ESG, which in turn – can allow them to make improved decisions regarding their resource allocation, efforts to mitigate transition risk, and which policies are most worthwhile to align with their personal goals.
Remember, ESG stands for environmental, social, and governance:
- Environmental – which refers to the factors that could have an impact on the planet, such as with excess emissions, efforts to manage and reduce water usage, mitigate air pollution, and seek to ethically source materials.
- Social – which refers to efforts to implement Diversity, Equity, and Inclusion (DEI) practices, implement fair working rights, and create a safe and secure workplace for all places in which the business operates.
- Governance – which refers to how a company demonstrates leadership, such as with how business ethics are conveyed, how policies are developed, executed, and followed, audits are completed, and the way in which intellectual property is protected.
ESG data collection and software can help companies ensure that they are implementing all of the possible mechanisms to ensure their environmental, social, governance criteria remains in excellent working condition.
Why is ESG software important?
ESG software is more important than ever before seeing as investors, customers, and stakeholders are learning to utilise all your ESG data from ESG reports when deciding whether to invest their time or money into the company.
“ Therefore, ESG software is a valuable tool that can be used as a buffer to ensure companies are making the most of every opportunity that comes their way – seeing as ESG software can help companies to remain proactive in their ESG strategy and prevent them from disappointing key stakeholders during pivotal moments of business. ”
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Why ESG Data & Risk Management Are Relevant Today
Here are a few other reasons why ESG software is crucial in today’s world:
- Engaging Stakeholders – It is more difficult than ever to keep key stakeholders engaged, and this is one of the areas where ESG software and improved data management could help – seeing as this tool helps companies to gain insight on issues before diving into a larger one. This provides stakeholders with more opportunities to voice their opinion and feel essential to the company’s direction.
- Better Decision Making – Seeing as ESG software allows for greater insight ahead of potential problems with sourcing for materials, production, and how those products or services will affect surrounding communities and the planet. Therefore, ESG software can help companies to better understand how their actions will impact others – and make choices accordingly with this new information.
- Manage ESG Risks – ESG risks refer to the problems that could arise in a business if a company refuses to acknowledge the impact of their environmental, social, or governance criteria. The good news is that ESG software can help companies to prevent these ESG risks from occurring in the first place, and allow for overall improved sustainability management.
- Improved Chances at Investments – Investors are taking an interest in ESG in order to ensure they commit to sustainable companies that can demonstrate long-term viability and consistent success. This means that opting to use ESG software can help increase the chances at new financial opportunities and resources for your business to grow.
- Practice Reporting for Other Disclosures – With new environmental regulations on the rise, it is becoming essential for companies to familiarise themselves with the importance of clearly delineating their company’s activities in order to comply and demonstrate transparency. Therefore, using ESG software can not only make adhering to future policies easier, but also help companies avoid other predicaments down the road – such as accusations of greenwashing.
The table below will further demonstrate how using ESG metrics, sustainability data, and reporting tools could be good for the continued success of your business:
| Reason | Benefit to Business |
|---|---|
| Regulatory Compliance | Ensures adherence to ESG-related laws and standards, reducing legal risks and penalties. |
| Improved Investor Relations | Demonstrates transparency and commitment to sustainability, attracting ESG-focused investors. |
| Operational Efficiency | Automates data tracking and reporting, saving time and reducing human errors. |
| Enhanced Brand Reputation | Shows dedication to environmental and social responsibility, improving public perception. |
| Risk Management | Identifies and mitigates ESG-related risks before they impact business performance. |
| Cost Savings | Optimises resource use and energy efficiency, leading to financial savings over time. |
| Competitive Advantage | Positions the company as a leader in sustainability, differentiating from competitors. |
Ultimately, ESG software is becoming a vital tool to help companies not only grow more aware of their current impact across ESG criteria – but to help them grow their business.
Our Top 4 ESG Softwares
MSCI Inc.
This New York based ESG software company has been helping companies in their ESG journey’s for over 50 years.
MSCI offers their own ESG ratings tool to help companies better identify their ESG risks and adjust them accordingly to adhere to future investors. In addition to this, MSCI also offers ESG services for ESG funds – such as ETFs, mutual funds, and loans.
“ MSCI is a great choice for companies most concerned with how their financial choices and ESG policies could impact one another. ”
Workiva
Offering ESG services with a platform for companies to monitor and manage their ESG activity, Workiva is a great option for companies looking for help with their ESG reporting requirements.
Workivia’s ESG software is unique as it utilises a cloud-based platform, which users can use to track their areas of interest and those to be improved. In addition to this, their platform allows users to set sustainability goals.
Navex
Based in Oregon, Navex provides ESG software to help companies first starting out with incorporating ESG values into their business models.
Navex can help companies seeking to improve their supply chain management and reduce ESG risks with the help of analytics from their automated software. In addition to this, companies can measure their carbon footprint in order to better comply with future climate disclosure requirements.
Diligent ESG
Previously known as Accuvio, this ESG software headquartered in New York City has been indispensable for companies looking to streamline their ESG reporting while preparing to comply with future environmental regulations and requirements.
“ One of the pros of Diligent ESG is their diverse platform, which presents and provides users with beneficial and interconnected services. ”
Diligent ESG can guide users through their goals to reduce GHG emissions, offers assistance in reporting various business variables such as supply chains and office culture, and also has over 2,000 different types of emission sources to choose from when seeking to calculate your current carbon footprint.
Overall, whichever ESG software your company decides to choose – it is important to select an ESG software that can provide the ESG needs, such as by helping to boost your ESG performance and ESG management, data accuracy and data processing, comprehensive reporting, and provide your company with the personalised assistance it's looking for in order to be most successful with your ESG goals.
How can you pick the best ESG software for your business?
Finding the best ESG software to help with ESG data management for your business requires your company taking the time to decide upon your personal ESG goals and which assets of the ESG software or technology are most vital to you when seeking out this service.
“ At the end of the day, picking the ESG software most appropriate for your business will come down to your personal preferences – meaning it is important to scope out all of the niche services each ESG software has to offer. ”
Tips to Pick the Right ESG Reporting Software Platforms For Your Company
Here are some things to consider when choosing an ESG software service:
- Define Your ESG Needs and Objectives – It is important to set clear ESG goals, otherwise – it will be difficult to communicate what you are looking for to potential ESG software candidates. This could include wanting actionable insights, audit ready data, or helping to streamline data collection for sustainability reports.
- Assess Critical ESG Areas – Seeking to collect data and information on each component of your current ESG strategy (in order to determine which areas could use the most improvement) can help you to better decide which ESG reporting platform or software may be most appropriate to help your company improve or ensure improved compliance management.
- Data Quality & Accuracy – Your company can, and should, check with the ESG software directly to learn if they are capable of both quantitative and qualitative data. This way, you can narrow down your choices to only seek an ESG software company that has the type of data collection you’re looking for – helping to make your ESG disclosures, ESG efforts, and ESG initiatives stronger.
- Shop Smartly & Read Customer Reviews – Whatever you’re purchasing, it’s always a smart move as a consumer to read the reviews of other customers – especially in the case of ESG software in order to decide if other customers found their data calculations worthy of its price tag.
- Make a Checklist of Non-Negotiable Features – Just like shopping for a new laptop or pair of shoes, it’s helpful to make a list of what you’re looking for in a product – in this case, new ESG software. Common features companies may not be able to compromise include user-friendliness, automated data collection, and assistance with stakeholder engagement.
- Data Security – While data quality and accuracy are essential to make true progress in your ESG goals, data security is equally as important. Therefore, it is paramount to verify how your potential ESG software plans to utilise verification methods and keep your information secure.
- User Friendly Experience – An ESG software may be decked out with all of the latest technology and data security measures in place, but ultimately – it will render useless if none of your employees or business partners can easily use it. This is perhaps one of the most important factors to consider when seeking a new ESG software.
- Seek a Demo Before Buying – There’s a reason why clothing stores have fitting rooms – trying out a product before you buy it can save you from the hassle of needing to back out later down the road, and the same goes for ESG softwares. If your potential ESG software offers a demo or trial period, take them up on their offer – it may end up before the ESG software of your dreams. If not, at least you’ll know for sure you made the right choice for your company!
Overall, choosing the right ESG software for your company is pivotal in ensuring your company remains transparent and accountable towards their ESG goals – and we hope that our top 5 ESG software choices can help make your decision a little easier.
What about Greenly?
If reading this article about our top 4 ESG softwares has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!
Seeking to understand the pros and cons of an ESG software can be challenging, but don’t worry – Greenly is here to help! Click here to book a demo and get personalised expertise on how you can start to reduce your own emissions and decrease your environmental impact.
Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.
Founded in Paris, we offer services to help you monitor, measure, and reduce your scope 1, 2, and 3 emissions – alongside special services to assist you in greater endeavors, such as complying with the CSRD or other upcoming environmental regulations.
In fact, Greenly pioneered ESG Connect – an entire community dedicated towards creating a network for members to further expand their ESG knowledge and later utilize their new connections for future improvements in ESG.
Sources
Logic Manager https://www.logicmanager.com/solutions/environmental-social-and-governance-esg-software/
Sustainability Magazine https://sustainabilitymag.com/top10/top-10-esg-reporting-software
ESG the Report https://www.esgthereport.com/what-exactly-is-esg-software/
Novisto https://novisto.com/esg-reporting-software-what-is-it-and-how-can-it-benefit-your-company-2/
Dilligent https://www.diligent.com/en-us
MSCI https://www.msci.com/our-solutions/esg-investing/esg-ratings
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