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.