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How to choose the best sustainability software for your company

January 17, 2023

As sustainability management and reporting grows in prominence, software has begun to play a crucial role in this process. In this article, we answer questions about sustainability software – what it is, why you should use it, and how to choose the right one. 

What is sustainability (ESG) software?

Sustainability software is an enterprise tool to manage an organisation's ESG data, be it for reporting or compliance purposes or to gain insights into the management of ESG issues. Like other enterprise software, it enables an organisation to take control of its data and unlock the potential for improved performance.

Benefits of using the right sustainability reporting software

Many companies use sustainability management software primarily to report on their ESG performance, but there are other significant benefits to their use. Sustainability software may be a relatively new addition to the suite of enterprise management software, but it leverages decades of development in management software and sophisticated enterprise-level technology. It aims to achieve ESG-related objectives such as reducing negative footprints and meeting targets.

Benefits of using ESG software:

  • Simplify the data collection process. 
  • Harness ESG data for analytical insights and to enhance sustainability performance.
  • Improve reporting quality and ensure compliance.

Let’s take a closer look at each of these benefits:

Save time and simplify data collection

With the right data management system, organisations can accurately capture and organise crucial data, saving hours of tedious work that would normally be done with manual spreadsheets. But not just any data management software makes the cut. A software developed specifically to capture ESG data points is able to identify the unique parameters that characterise sustainability-related information. 

One of the biggest benefits of sustainability software is that it resolves the number one challenge in ESG reporting — the issue of data. So many companies at various stages of sustainability management and reporting struggle with collecting the right data, measuring and tracking indicators, and verifying their accuracy. Credible data is critical to any sustainability strategy to baseline, benchmark, and build on. The ability to provide standard simplified workflows, automate the data collection process and audit for transparency are the two main reasons organisations opt to use sustainability reporting software. 

Gain insights to improve ESG management

Sustainability management software allows organisations to understand their position on their sustainability journey, and to identify areas for improvement. Built-in analytics can generate analytics that highlight trends in performance, which may not be immediately apparent even to the trained eye. Given the knowledge gap in corporate sustainability circles, this is a significant asset that companies can wield to their advantage. Sustainability software can help you gain a deeper understanding of ESG aspects in the context of your organisation, so you can make informed decisions towards better sustainability performance. 

Improve reporting quality and compliance

Many companies use sustainability software to prepare reports or mandatory disclosures. Every year, massive resources are dedicated to preparing disclosures. While the development of reporting standards are ongoing, companies must navigate the evolving reporting landscape – an endeavour which can get very confusing. Reporting legislation can be a maze to understand, and it doesn't get easier with so many different reporting standards and frameworks. Sustainability software systems include reporting tools that ensure alignment with the requirements of the chosen framework or legislation.

Common features of sustainability software

Each software offers a slightly different experience, although they all share a common function as a cloud-based platform to store, organise, and manage your sustainability data. These are the features most prevalent in sustainability management software:

  • Data management capabilities to process large amounts of data
  • Automation for the data collection process
  • Analytical tools to generate insights
  • Report generation to ensure compliance

Additionally, these are some characteristics you want to look out for when selecting the right sustainability software:

  • In-platform data sharing between internal and external stakeholders. There should be a process to easily facilitate information exchange between an organisation and all its stakeholders. 
  • Data security to ensure information exchange does not come at the cost of business-critical information. 
  • One-click report preparation. Depending on the format of disclosures, one-click reporting auto-generates a compliant report from the data stored in the system within seconds. 

Tips for choosing the right sustainability software for ESG reporting

Determine your objectives and choose a software that caters to those needs. Check if the reporting formats that they support are aligned with the reporting framework of your choice. If you are expecting a lot of stakeholder engagement and communication, check if the system supports that in the numbers that you require.

One important consideration is to figure out how this new tool will integrate with the rest of your enterprise software systems. Environmental data should be well integrated with the building management system, and employee data should be connected to the company human resource management (HRM) system, while ESG risks can be regularly updated via ERM software.

Main advantages of the Daato software

Daato's sustainability reporting software offers all the common features you can find in the standard software, plus more: 

  • Allows an organisation to send or request information from stakeholders and vice versa while maintaining the integrity and privacy of the data. 
  • Tracks the source of all data points and information updates made on the platform, enabling accountability and auditability. 
  • Questions and guidance to ensure compliance with reporting frameworks.
  • One-click reporting for standard frameworks.
  • OpenAPI enables integration with other enterprise software such as ERP, CRM, EHS, etc.

Our team of ESG and reporting experts are well-versed with the challenges of reporting for mid- to large-scale companies across many industries. Our technology automatically ensures compliance with the latest developments in reporting requirements.

Managing an organisation's sustainability performance can be made much easier with the help of software technology. It is a worthy investment in the long run for companies that are committed to staying in the game.

How we help you

  • We simplify the collection of ESG data in your organisation by offering one central platform and integrations into ERP, HRM, CRM, EMS etc., to automate data collection.
  • We help you complete the information requests from regulators or investors and guarantee the protection of business-critical information.
  • We automate the collection of relevant data internally and simplify the collection of data across the supply chain while protecting business-critical information.
  • We take on the burden of requesting information from multiple stakeholders on the Daato platform where you can trace and monitor data sources.
  • We can generate your report in the correct format at the touch of a few buttons once the data has been collected.

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