Digital Solutions Help Firms To Identify And Mitigate ESG Risks And Climate Risks

With share prices – and tenure in executive roles – increasingly correlated with the ability to identify, mitigate and manage ESG and climate-related risks, it should be no surprise that there has been a surge of investment in digital solutions that help solve part of the problem. In the recent Verdantix benchmark of 44 corporate ESG and sustainability software solutions we identified significant variance in the availability of ESGtech solutions for four different use cases.

For firms seeking to undertake daily monitoring of public sentiment with regards to their exposure to ESG risks, Verdantix identified just two firms – alva and Nasdaq – with proven functionality targeted at issuers rather than financial investors. We expect more to enter this market as the value of close to real-time ESG risk monitoring proves itself. For all the focus on TCFD reporting, it was surprising to find that just 16 of the 44 vendors we assessed offer functionality for climate change risk assessment for physical assets or energy transition risks. Schneider Electric stood out as the strongest provider in this category. Other credible providers include Ecometrica, Envizi, Figbytes, IsoMetrix, Novisto and UL. Sustainability materiality assessments also identify the need to understand stakeholder concerns and how they may cause ESG risks. Our benchmark identified 16 proven providers of stakeholder intelligence digital solutions with EHS vendors Enablon, Intelex, IsoMetrix and Sphera offering the broadest capabilities. Firms seeking to improve supply chain ESG risk management can chose from 21 vendors. Whilst EcoVadis stood out from the crowd, other vendors with complete offerings include Assent Compliance, Benchmark Digital and iPoint.      

ESG Risk Management

David Metcalfe

CEO, Verdantix

David is the CEO of Verdantix and co-founded the firm in 2008. Based on his 20 years of experience in technology strategy and research roles he provides guidance on digital strategies to C-level executives at technology providers, partners at private equity firms and function heads at large corporations. His current focus is on helping clients understand their market opportunity tied to ESG investment trends and their impact on corporate sustainability strategies. During his 12 years running Verdantix – including 4 leading the New York office – he has helped dozens of clients grow their businesses through fund raising, acquisitions and international growth. David was previously SVP Research at Forrester and Head of Analysis & Forecasting at BT. He holds a PhD from Cambridge University and also worked as a Research Associate at the Harvard Business School.