What is ESG portfolio management software?
ESG portfolio management software solutions allow you to identify your portfolio’s baseline footprint, understand how to achieve ESG goals, and even drive your portfolio companies toward decarbonization by promoting best practices defined by the Science-Based Targets initiative.
Why is ESG portfolio management software important?
Using ESG portfolio management software can benefit your investment firm, your companies, and your stakeholders. Here are the top 4 benefits of using software technology:
- Achieving net-zero targets: The concept of achieving a net-zero balance sheet can sometimes be challenging, especially when it comes to managing portfolio companies. Using a software can help you understand your baseline, which is the first step to achieving net-zero balance and allowing you to work toward reducing your portfolio’s greenhouse gas emissions. The platform provides dashboards that allow you to set up holistic carbon management and set emissions targets for your investment portfolio.
- Centralize your assets: centralized ESG management provides insights into your portfolio’s ESG performance. The platform helps you align your assets and activities with the gold standard developed through science-based targets. It can enable asset managers as well as owners and portfolio companies to perform carbon calculations and reporting based on a common methodology and framework. You will be able to align your companies with your sustainability goals within a common framework.
- Reports to Stakeholders: Carbon disclosure is one of the most important ESG factors that stakeholders care about the most. You can generate reports for your stakeholders in no time. This allows you to focus more on high-level sustainability strategies for your business and portfolio companies.
- Sustainable Investing transparency: You can track responsible practices. Your stakeholders can be assured that you are prioritizing long-term ESG impacts over short-term gains.
What are the most common features of ESG portfolio management software?
Most ESG portfolio management software have a wide range of features. Below are the top 5 features to consider in your software search.
- Scalable ESG data collection: automatic data collection gives you confidence that the ESG data used for each portfolio company is accurate and valid, resulting in high-quality ESG reports.
- Best-in-class compliance: An updated database of the latest standards and regulations ensures that you and your portfolio companies are compliant.
- Customizability: The ability to add your own reporting framework or include custom indicators lets you focus on the data that matters to you and your portfolio companies.
- Detailed analytics and insights: An interactive dashboard to track your ESG performance and portfolio at the company level gives you real-time insights into your portfolio’s ESG performance.
- Empower your portfolio: Put ESG best practices to work in your portfolio companies. Your investment manager knows the practices your portfolio companies are using to achieve their sustainability goals.
- Powerful carbon management: Use a flexible system to calculate and manage the carbon footprint of your company and portfolio companies.
Who are the most frequent buyers of ESG portfolio management software?
It is a useful solution for asset managers, owners, investors, financial institutions, sustainability teams and business operations teams.
Financial institutions such as banks and private equities can use this software to convert their financial transaction data into carbon footprint data that discloses financed emissions in accordance with the GHG Protocol and Partnership for Carbon Accounting Financials (PCAF) standards. As an asset manager and owner, you can calculate the Financed Emissions profile of your investment portfolios.
Your ESG and sustainability team can use the software to perform calculations and generate reports on the carbon and climate impacts of your portfolio companies. The platform supports your operational team in managing your portfolio companies to meet and achieve your global ESG goals.
2022 list of the top 10 ESG Portfolio Management software solutions
- Planetly by OneTrust
- Proof of Impact
- Position Green
- EVORA Global | SIERA
For more software solutions that fit your needs, budget and location, see our dedicated ESG portfolio management software directory.