Choosing sustainability software: Key criteria, benefits, and best tools from the Fraunhofer study

In light of increasing regulatory demands such as the Corporate Sustainability Reporting Directive (CSRD), companies are under growing pressure to transparently document their environmental and social responsibilities. Traditional tools like Excel are reaching their limits, as they cannot adequately meet the complex compliance and sustainability reporting requirements, and often struggle with processing large volumes of data accurately. This has led to rising interest in specialized sustainability software solutions that support companies in enhancing efficiency and implementing sustainability standards. The market for such tools has grown significantly, as highlighted by a Fraunhofer study that evaluated over 90 solutions.

In this article, we provide an overview of different types of sustainability software, their benefits, and examples of software providers.

Regulatory framework and key standards

When selecting suitable sustainability software, it is crucial to consider the regulatory framework and the specific requirements of relevant standards, such as CSRD, EU Taxonomy, or CBAM. Additionally, it is essential to analyze key sustainability aspects of the industry and stakeholder interests to ensure the chosen provider meets these requirements well.

In mechanical engineering, for example, aspects such as product quality and reliability, environmental impacts of production and supply chains, and ethical sourcing of raw materials are significant. Identifying these key areas ensures that the selected software meets specific requirements and provides added value.

Comparing industry references helps assess whether the software is used in similar companies within comparable industries, as some applications are specialized for large corporations, while others cater to mid-sized companies.

Software requirements

Process managers should assess whether their company already produces sustainability reports that can serve as a foundation or is initiating reporting for the first time. Furthermore, consideration should be given to whether the focus is solely on meeting basic requirements or if the gathered data will also be used as part of a sustainability strategy for optimization across departments and locations. The software’s capability to integrate relevant primary data from critical business areas is also essential.

Types of sustainability software

There are various categories of sustainability tools that assist companies in capturing emissions data and ESG reporting:

1. Carbon Accounting Management: These tools are specifically designed to calculate, monitor, and manage a company’s CO₂ emissions. They enable a detailed analysis of emission sources and aid in planning and implementing reduction measures.
2. ESG Reporting: ESG reporting software (Environmental, Social, Governance) helps companies capture, analyze, and report their sustainability performance in areas of environmental impact, social responsibility, and corporate governance. It offers a comprehensive platform to ensure compliance with reporting standards and regulatory requirements.
3. Combined Solutions: Carbon Accounting & ESG Reporting: These software solutions integrate both carbon accounting management and ESG reporting. They provide a holistic platform to compile, analyze, and report emissions data and other ESG metrics in alignment with applicable standards and requirements.

Benefits of using sustainability software

The use of sustainability software offers numerous advantages:‍

1. Standard-Compliant Reporting: Appropriate software ensures that reports meet international standards such as the CSRD, enhancing transparency and stakeholder trust.‍
2. Resource Efficiency and Cost Reduction: Efficient software identifies optimization potential and supports the implementation of efficiency measures, leading to long-term cost savings.
3. Data Integration and Management: Automating data collection and updates minimizes errors and improves data quality.
4. Meeting Customer and Stakeholder Requirements: The software helps transparently present the company’s sustainability performance, thereby strengthening stakeholder trust.

Fraunhofer study – Overview of the best software solutions for Carbon Accounting and ESG Reporting

The study provides companies with a comprehensive overview of more than 90 software solutions and highlights the close connection between digitalization and sustainability. The analysis evaluates the tools based on various criteria. A total of 38 of these solutions are described in detailed profiles, including a short description, key facts, and a list of reference customers who already use the tool.

The following companies were evaluated:

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Excerpt from the Fraunhofer study on various ESG and carbon accounting software solutions:

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Conclusion

Selecting the right software can be challenging and time-consuming. Therefore, it's essential to define internal needs precisely in advance and approach the selection process strategically. This methodical approach enables an informed decision that aligns with the company's requirements and goals, supporting sustainable success.

Tanso Software

Tanso offers industrial companies a comprehensive, modular solution for various sustainability areas. It provides user-friendly ESG reporting according to CSRD or other standards such as CBAM and EU Taxonomy, adaptable to specific needs. For advanced users, Tanso offers extensive analysis capabilities and specializes in data-intensive and methodologically complex areas like Scope 3 emissions calculation or Product Carbon Footprints. If you're interested in learning more about our software, you can book a meeting here.