what makes a (great) ESG platform?

components of a great ESG platform

Not all ESG platforms are created equal, but a robust platform should have certain components without exception. Here are six key elements of an effective ESG software solution.

1. an ESG platform should be cloud-based

As remote and hybrid work has become more common, there’s a greater need for business platforms to be hosted in the cloud as opposed to on-premise. This is also true for ESG software.

The ability to access an ESG platform from anywhere simplifies collaboration, sharing, and reporting processes so it makes sense to select a software-as-a-service (SaaS) solution. It can also save time and reduce costs by eliminating expensive on-premise servers and equipment.

An ESG SaaS platform provides the added benefit of simplifying security and easily enabling backups and restore points. Plus with many options for data residency, companies with regulatory requirements can ensure their data remains within their country.

2. an ESG platform should be comprehensive

ESG reporting isn’t just about environmental responsibility and accountability. It’s about comprehensive sustainability, which includes leadership and governance, diversity, and social considerations.

That means your ESG software should be able to support even the most sophisticated ESG program – or scale as your program evolves. ESG software should enable strategy development, workflow management and data collection for multiple requirements, such as financed emissions, climate accounting, philanthropy, water stewardship and diversity, equity and inclusion (DEI).

To do this, a platform should have the ability to:

• Visualize data in real-time
• Conduct materiality assessments and sentiment analysis
• Turn complex data into actionable insights
• Integrate with existing business workflows and platforms
• It may also include features like:
• Interactive strategy maps for strategy development
• Integrated scorecards for strategy reporting
• Microsites that can be shared with stakeholders

3. an ESG platform should be automated

While reporting is often still a voluntary process, standards need to be met and collecting ESG data is not a quick or simple process.

ESG data is usually collected across multiple sources within an organization, meaning redundancy, gaps, or duplication are all possible. The right ESG platform will automate and streamline data collection through the use of an application programming interface (API) so you can populate reports directly at the data source.

It should also have the ability to automate other tasks, such as:

• Updating reporting framework standards for GRI, CDP, SASB, etc.
• Creating customizable scorecards and key performance indicator (KPI) dashboards
• Conducting quality checks and filling in data gaps
• Managing workflows
• Creating other reports for benchmarking and auditing

4. an ESG platform should be auditable

Audits, whether internal or external, are an essential part of accountability. From an ESG perspective, audits are often conducted to:

• Meet governmental and regulatory body requirements
• Meet client requirements
• Respond to investors
• Manage risk

Your ESG platform should be able to support any audit by providing data exports, history reports, and data trails. When it comes to creating audit reports, your ESG software should enable their creation with flexibility, accuracy and ease. This enhances transparency and accountability, and builds stakeholder trust.

5. an ESG platform should be scalable

Scalability is essential for growth and an ESG platform that is fixed will quickly become outdated, potentially producing incomplete or inaccurate reports. For this reason, your ESG platform should evolve with your organization – not just expanding in size, but in the various ESG requirements it can handle.

For instance, an organization will often begin their ESG journey by collecting only data on climate accounting. Then, and as their program matures, they will expand reporting to other areas such as philanthropy, water stewardship or DEI. As an ESG program changes and matures, your platform should be able to meet those needs through a comprehensive feature set.

Additionally, regardless of what reporting is required, a good ESG platform will always reflect the latest industry frameworks and standards. As standards shift, your ESG program should be easy to update without having to build from scratch or implement new reporting technologies.

6. An ESG platform should be secure

Last but not least, an ESG platform should be secure. ESG data is a business asset, and just like any other business asset, organizations require confidentiality and security.

This means the software should comply with industry best practices for security requirements and certification. Encryption, both for the transmission of data and while not in use, is also critical.

Furthermore, your ESG platform should be protected from disaster, including cyberthreats, natural disasters, and hardware or software damage. A good platform will be capable of threat-monitoring and provide the ability to back up data in a secure location.