Strategic Focus: ESG Reporting Will Force Firms To Consolidate Legacy EHS IT Systems

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Executive Summary

For three decades firms have invested in digital solutions to manage environmental, health and safety processes. In the 1990s and the 2000s firms often bought EHS IT systems at a site or divisional level, or for a region. Operational groups such as industrial hygienists, chemical compliance experts and environmental engineers procured their own best-of-breed solutions from vendors such as Enviance, Medgate, MSDSonline and opsInfo. Whilst integrated EHS software platforms became more prevalent from 2015 onwards, the majority of large enterprises with revenues above $5 billion still run a multitude of new and old EHS IT systems, with some operating as many as 200 different applications. This report explains why a highly fragmented EHS IT estate is not compatible with enterprise-wide ESG disclosures and points to the implications for corporates, services firms and tech vendors.

Table of contents

New ESG Reporting Dictates Require Robust EHS Data Management Capabilities
A Fragmented EHS IT Estate Poses Multiple Problems For ESG Reporting
Consultants Should Amp Up Their EHS Digital Transformation Tunes
EHS Software Vendors Need To Ride The Consolidation Wave – Or Lose Out Big Time

Table of figures

Figure 1. Example ESG Reporting System Architecture For A $5-Billion-Plus Revenue Organization
Figure 2.
Implications Of A Fragmented EHS Ecosystem For ESG Compliance
Figure 3.
Business Functions Responsible For Implementing ESG Strategies
Figure 4.
Lockheed Martin To-Be EHS And ESG Systems Architecture Diagram
Figure 5.
The Crowded ESG Reporting And Data Management Software Market 


About the authors

Christopher Sayers

Industry Analyst

Chris is an Industry Analyst in the Verdantix EHS practice. His current research agenda focuses on digital mental health and wellbeing solutions. Chris joined Verdantix in 2020 and has previous experience at EY, where he specialised in robotic process automation (RPA). He holds an M.Eng. in Engineering Science from Oxford University with a concentration in machine learning and machine vision.

David Metcalfe


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.

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