INTHEBLACK December 2023/January 2024 Special Edition - Flipbook - Page 42
When considering the options,
the software capabilities need to:
• Match the materiality, or issues
identified to be tracked
• Report on relevant standards and
frameworks for data collection
and reporting
• Offer KPI dashboards for
performance reporting
• Model, compare different actions
and support decision-making
• Provide relevant data and analytics
• Track and manage various ESG
programs across the business
• Format and deliver data for
different frameworks, standards
and rating agencies.
ESG software falls into a couple of
different categories, says Geschickter,
from the broad to the more specific.
ESG management and reporting tools
provide broad-based coverage for a gamut
of ESG topics, as identified by broad
standards such as the Global Reporting
Initiative or Sustainability Accounting
Standards Board.
Greenhouse gas (GHG) management
and reporting tools go much deeper
into emissions reporting to more fully
implement the GHG Protocol.
“Scope 3 is a particularly challenging
area, and there are even specialised
tools that focus just on that,”
Geschickter says.
More specifically, gas emissions
management is considered a separate
market by Gartner.
“Think of these solutions if you are
in a ‘smokestack industry’ with high
Scope 1 emissions,” he says.
Financial and accounting businesses
need to keep in mind they may be
seeking external assurance for some
ESG disclosures, either immediately
or in the near future, Geschickter says.
For this, they may need solutions that
have strong data management.
“There are a lot of calculations
and estimates ‘beneath the covers’,
and software and data management
capabilities help you explain how you
arrived at the reported information,”
he says. ●
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WHERE TO START
EY Oceania’s Fiona Hancock says that, before starting to
pursue any single solution, businesses should take a step
back and do a needs assessment. This will identify existing
data and its source, type of reporting needed, data storage
requirements and so on.
“Be aware of all the technical specifications and find
out if there are people in the team to help guide these
things. Then you can start to narrow down the selection
of offerings to work out what’s fit for purpose for your
organisation,” she says.
Chet Geschickter, VP analyst at Gartner, who co-developed
its ESG software market guide, suggests these steps to
prepare for using ESG software:
1. UNDERSTAND REGULATORY REQUIREMENTS
Start by identifying local and international regulations
for reporting non-financial performance information.
“If you are in a financial institution, you may also
be facing regulations related to your loan portfolio,
investments or property and casualty portfolio,”
says Geschickter.
42 INTHEBLACK Dec 2023/Jan 2024 SPECIAL EDITION
2. ESTABLISH GOALS
Next, set the goals and measure progress. This is where
a reporting tool is needed to collate data and provide
transparency. “It needs to give internal users the
intelligence and information they need to make sound
operational and strategic decisions,” says Geschickter.
3. SET A BUDGET
Geschickter says most software platforms have
modest base fees, with add-ons for additional users
or other metrics. Vendor pricing needs to align with
usage requirements.
“If you are in a large enterprise and need a lot
of people entering data, a per-user fee can be a
deal-breaker,” Geschickter notes.
4. DETERMINE SCOPE OF USE
A materiality assessment is an important step, to set
the scope in terms of issue coverage.
“It should include a review of relevant regulations
and reporting requirements,” he says.
