ESG software: 6 tips for selecting the best fit for your business

For ESG planning and strategy, Allianz is likewise adopting the ESG module within ServiceNow, as it wouldn’t make sense for Allianz Technology employees who are not involved in ESG reporting to use the Microsoft tool, given that it’s much more granular and not optimized for their area of responsibility.

“We don’t want anyone to have to go to a different dashboard or system to see what the ESG outcomes of their decisions are,” Karcher says. “Everyone from Salesforce to SAP to Oracle has some ESG functionality. It’s a matter of perspective, but from my point of view, CIOs should look at what the majority of people who will use the system are already working in on a day-to-day basis.”

Even more importantly, both the Microsoft and ServiceNow modules will use the same enterprise ESG data sets, which Karcher is moving to the Allianz data lake this year. “That’s where the single source of truth comes into perspective and increases performance,” Karcher says.

Ensure data integration is effective — and goes both ways

While the ESG landscape ranges from industry- or purpose-specific tools to full management platforms, IDC’s Craven notes that “the critical aspect for all these solutions is to connect with other software platforms to both source data as well as to push data into other solutions.”

That’s why, if a company has significant investments with a particular enterprise vendor for ERP, for example, it often makes sense to consider their sustainability products for integration purposes.

Still, as Reppy notes, “the tech landscape is still evolving in this space and there are variations by sector.” So a chief concern, whether bolting onto an existing enterprise implementation or integrating a new point solution, is ensuring that your ESG solution will be able to access data from the wide range of systems necessary for reporting purposes, as well as to send data back to other systems for performance enhancement decisions.

Factor price and scope — and consider growing as you go

Cost is always a consideration. And broader capabilities may come with a bigger price tag. But there may also be modular solutions that companies can implement with fewer features enabled early on that can grow along with organizational needs and maturity. The good news is that “given the range of vendors and solutions in the market, there really is something for everyone,” says Craven.

Choose with an eye on the future

When deciding on ESG software, CIOs should consider their organization’s ESG journey over the next five years, says Schellman’s Gosselin. And they should dig into any vendor’s planned product development roadmap to ensure a long-term fit.

Developing close relationships with ESG vendors is critical, not only because their products will grow over time but also because ESG reporting itself will evolve to include much more complex and challenging areas such as Scope 3 emissions.

“Treat your solutions provider like a partner and extension of your team so that they can help best customize their solution for your company’s needs,” advises Mahon of Werner Enterprises, which implemented Salesforce’s Net Zero Cloud with Workiva’s reporting platform to track, analyze, and report reliable environmental data after extensive research to settle on the right partners.

EY’s Reppy says flexibility and scalability are crucial selection criteria “especially in a space where most products are not yet mature” — and one in which regulations will continue to develop rapidly. Still, although there may be no perfect solutions today, Reppy believes that smart decisions and good partnerships will lay a solid foundation now and for the future.

IDC’s Craven agrees that partnerships are key.

“ESG software deployment is complex and, if done correctly, interwoven throughout enterprise systems,” she says. “Given the changing nature of the landscape, choose a trusted vendor that will likely be able to evolve with your organization’s needs.”