How to Choose the Best ESG Software-A Comprehensive Guide

Before diving in, it's worth noting that as per a report, 75% of business leaders view ESG criteria as either important or very important to their overall business strategy.  Picking the right ESG software can feel like choosing a map for an uncharted journey. The stakes are high, and the destination—a more sustainable, transparent, and compliant business—is non-negotiable. But with so many options on the table, how do you ensure the software you choose aligns with your goals, simplifies complex ESG metrics, and actually delivers results?  Here’s the thing: ESG reporting software isn’t just another tech tool—it’s the backbone of your organisation’s commitment to environmental, social, and governance principles. It’s what bridges the gap between ambitious sustainability goals and actionable outcomes, from managing scope 3 emissions to improving the quality of your emissions data.  If you’ve been overwhelmed by buzzwords and endless software demos, you’re not alone. This blog will cut through the clutter and share five practical, effective ways to make the right choice. Let’s get you on the path to smarter ESG management.   

What is ESG Software? 

ESG stands for Environmental, Social, and Governance, a framework that evaluates a company's commitment to sustainability, ethical practices, and corporate accountability.  ESG software is a specialised digital platform designed to help organisations track, manage, and report their performance across environmental, social, and governance (ESG) criteria.  It serves as a centralised tool to collect, analyse, and present data related to sustainability initiatives, social impact, and governance practices, streamlining the process of meeting regulatory requirements and stakeholder expectations.  In a nutshell, ESG software transforms ESG reporting and management into a more efficient, transparent, and actionable process, empowering organisations to not only comply with regulations but also drive meaningful change and innovation.  Let's delve in to know more!  Did you know?  The global ESG software market reached a valuation of USD 838.6 million in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 14.3% from 2024 to 2032.  This shows that the rising emphasis on sustainability, regulatory compliance, and heightened stakeholder expectations are major forces fueling the demand for ESG software solutions.   The growing adoption underscores the critical role ESG software plays in helping companies navigate the complexities of modern sustainability challenges while maintaining transparency and accountability. 

Importance of ESG Software in Businesses 

ESG software is a game-changer for organisations aiming to integrate sustainability into their core operations while staying ahead in an increasingly responsible business landscape. 

• Streamlines ESG Reporting – Automates the collection and organisation of ESG metrics, saving time and improving accuracy. 
• Enhances Data Quality – Delivers precise, real-time emissions data to support decision-making and reporting. 
• Ensures Regulatory Compliance – Keeps businesses aligned with evolving ESG standards and frameworks effortlessly. 
• Drives Emission Reductions – Identifies key areas for carbon footprint reduction, particularly in scope 3 emissions. 
• Improves Stakeholder Trust – Boosts transparency, demonstrating accountability in sustainability efforts and governance practices. 

Difference between ESG Software and Carbon Accounting 

ESG software and carbon accounting may seem interchangeable at first glance, but they serve distinct purposes within the sustainability framework. ESG software offers a comprehensive platform for managing a company’s environmental, social, and governance responsibilities.   ESG software captures a wide array of metrics, from emissions data and social impact initiatives to governance policies, enabling organisations to report on their overall sustainability performance and meet regulatory or stakeholder expectations. It provides a bird’s-eye view of how a company is performing across the ESG spectrum.  Carbon accounting, in contrast, focuses specifically on measuring and managing carbon emissions. It deals with quantifying emissions across scope 1, scope 2, and scope 3 categories, providing the granular data needed to calculate a company’s carbon footprint.   While carbon accounting is often a feature within ESG software, its primary aim is to support targeted emission reduction strategies and compliance with carbon-specific regulations.   Simply put, while ESG software offers a broad overview of a company's sustainability performance across multiple dimensions, carbon accounting provides an in-depth analysis of carbon emissions, enabling organisations to implement effective emission reduction strategies. 

Characteristics of a Good ESG Sofware 

• Comprehensive ESG Coverage – Tracks and manages environmental, social, and governance metrics seamlessly. 
• Regulatory Compliance – Ensures alignment with global ESG frameworks and reporting standards. 
• Real-Time Data Insights – Offers up-to-date emissions data and ESG metrics for timely decision-making. 
• Automated Data Collection – Minimises manual effort and enhances accuracy. 
• Integration Capabilities – Easily connects with existing systems like ERP or carbon accounting tools. 
• High Data Quality – Delivers reliable and precise ESG reporting to build trust. 
• Actionable Analytics and Reporting – Provides detailed dashboards and insights to support strategic decisions. 

 

How to Choose the Best ESG Software? 

Here are 7 key ways to choose the right ESG software and ensure alignment with your organisation’s objectives: 

1. Assess Your Needs 

Action: Map out your organisation’s specific ESG priorities—emissions tracking, stakeholder engagement, governance reporting—and ensure the software addresses these needs. Customise the tool to focus on metrics critical to your sustainability strategy. 

2. Ensure Compliance Capabilities 

Action: Align the software with regulatory requirements your organisation must meet, such as global ESG standards or industry-specific regulations. Regularly update settings to reflect changes in compliance mandates. 

3. Look for Automation Features 

Action: Streamline data collection and reporting by automating routine processes. This frees up resources to focus on strategic initiatives aligned with organisational sustainability goals. 

4. Check Integration Options 

Action: Ensure the software integrates with your existing systems, such as ERP and carbon accounting tools, to create a unified data ecosystem. This alignment supports holistic decision-making across departments. 

5. Evaluate Data Quality 

Action: Use the software’s data validation tools to ensure reports reflect high-quality, accurate metrics. Reliable data builds stakeholder trust and supports transparent communication of organisational goals. 

6. Scalability and Customisation 

Action: Choose a solution that can evolve with your sustainability objectives, such as expanding scope 3 emissions tracking or addressing new ESG initiatives. Customise dashboards to focus on your top priorities. 

7. User-Friendly Design 

Action: Opt for software with intuitive features and cross-departmental accessibility to promote widespread adoption. Conduct training sessions to align teams with how the tool supports overall ESG goals.  By carefully selecting ESG software with these factors in mind and aligning its capabilities with your organisation’s goals, you can maximise its impact and drive meaningful progress toward sustainability. 

 Top 5 ESG Software Solutions 

Selecting the right ESG software is crucial for effectively managing and reporting your organisation's environmental, social, and governance initiatives. Here are five leading ESG software solutions, each offering unique features to enhance ESG reporting: 

1. Workiva 

Overview  Used by over 6,000 global companies, Workiva offers comprehensive corporate reporting, ESG, audit, and risk management solutions. In 2024, it launched Workiva Carbon, specialising in carbon accounting and decarbonisation.  Key Features: 

1. Unified platform for financial and non-financial reporting. 
2. Real-time collaboration tools for cross-departmental synergy. 
3. Advanced data assurance and audit trail functionalities. 

What sets Workviva apart?

• Integration versatility connects seamlessly with diverse enterprise systems. 
• Customised reporting workflows adapt to specific organisational needs. 
• Proven scalability ensures effective support for businesses of all sizes. 

2. Mavarick AI 

Overview  Mavarick AI offers an AI-driven ESG data management platform designed for organisations with complex supply chains. The platform helps measure, analyse, and report on ESG data, including Scope 3 carbon emissions, ensuring regulatory compliance and supporting sustainability goals.  Key features:

1. AI-driven automation for regulatory reporting such as CSRD ESRS.  
2. Actionable insights into sustainability and decarbonisation initiatives.
3. Enhanced auditability and data quality, ensuring every measurement is traceable.  
4. Comprehensive Scope 3 visibility, unlike competitors focused on Scope 1 and 2.  
5. Comprehensive supply chain ESG data visibility.

What sets Mavarick apart?

• End-to-End data automation for regulatory reporting (e.g., CSRD) 
• AI-driven recommendations for prioritising sustainability initiatives 
• Comprehensive supply chain data management, including Scope 3 emissions. 

3. IBM Envizi ESG Suite 

Overview   This SaaS solution offers comprehensive data and analytics software to collect, manage, and derive insights from environmental, social, and governance metrics, supporting audit-grade reporting in line with compliance frameworks.  Key Features 

1. Automated data capture from diverse sources. 
2. Scope 1, 2, and 3 emissions calculation with embedded factor libraries. 
3. Integration with ENERGY STAR® and NABERS for benchmarking. 
4. MSCI ESG Manager 

What sets IBM Envizi ESG Suite apart? 

• Integrates diverse data sources to provide a unified view of sustainability performance. 
• Ensures finance-grade data integrity for reliable and auditable ESG reporting. 
• Scales effortlessly to support organisations of all sizes and complexities. 

4. MSCI ESG Manager 

Overview  MSCI provides a suite of ESG reporting solutions, including data, ratings, and climate risk analysis tools, designed to streamline both internal and external reporting needs with comprehensive ESG insights.   Key Features: 

1. Extensive ESG ratings and data coverage across industries. 
2. Climate risk assessment tools for informed decision-making. 
3. Customisable reporting templates aligned with global standards. 

What sets it apart?

• Integrates comprehensive ESG research and analytics into a unified platform. 
• Provides robust tools for portfolio screening, restricted list generation, and ESG change alerts. 
• Offers extensive global market coverage to support diverse investment strategies. 

Each of these platforms offers unique features tailored to various organisational needs, facilitating effective ESG management and reporting. 

5. ESG Flo 

Overview  Developed within Bain & Company, ESG Flo leverages AI to automate data collection and processing across all ESG disclosures, enabling companies to generate audit-ready metrics from raw data.  Key Features: 

1. AI-driven data automation for efficient ESG reporting. 
2. Comprehensive coverage of various ESG frameworks. 
3. User-friendly interface for streamlined data management. 

What sets ESG flo apart?

• Simplifies ESG reporting with automated, audit-ready metrics derived from raw data. 
• Adapts seamlessly to evolving ESG regulations and industry-specific requirements. 
• Focuses on end-to-end transparency, ensuring actionable insights across all ESG dimensions. 

Conclusion 

Choosing the right ESG software is a critical step toward building a more sustainable and transparent organisation. The right tool not only simplifies ESG reporting but also enhances data accuracy, streamlines compliance, and aligns seamlessly with your sustainability goals.   By focusing on features like automation, real-time insights, and integration capabilities, businesses can turn complex ESG challenges into manageable, actionable outcomes. ESG software is more than just a reporting tool—it’s a driver of meaningful change. Investing in the right solution empowers organisations to make informed decisions, reduce environmental impacts, and demonstrate their commitment to long-term sustainability.