Sustainability Management Software

Forrester's framing of this category sets a demanding standard: given the diversity of data that must be collected, cleaned, and standardised, sustainability management must be as rigorous as financial management.

That is the right ambition and it is worth being clear about what it implies. Financial reporting rests on centuries of accounting standards, audited inputs, a licensed profession, and legal consequences for getting it wrong. Sustainability reporting rests on standards still being written, inputs that are largely unaudited, and figures that are substantially estimated rather than measured.

The software in this category exists to close that gap. Whether it can is the question underneath every purchase in it.

What the software does

Forrester defines the market as software performing sustainability data collection, calculation, and reporting, helping organisations assess, plan, and execute strategies that meet demands from customers, regulators, and investors, address compliance requirements across standards and frameworks, and manage sustainability opportunities and risks.

Its own summary is blunter and more useful: environmental sustainability is a compliance, accounting, and data management problem.

Four use cases define the scope. Sustainability data collection and management. Carbon accounting and calculation. Reporting and disclosure. And ESG risk management.

The first is where the work actually is. An organisation's emissions data sits in utility invoices, fleet records, travel bookings, procurement systems, facilities management, and thousands of supplier relationships, in different formats, in different countries, on different schedules. Turning that into a figure someone will sign is data engineering before it is anything else.

Worth distinguishing this from the adjacent category of ESG data and analytics providers, which sells you data about other companies for investment and risk purposes. This category helps you produce data about yourself. Opposite direction, different buyer, frequently confused.

The lineage

The Forrester New Wave: Sustainability Management Software, Q1 2022, authored by Renee Murphy and Salvatore Schiano, evaluated fourteen providers against ten criteria as an emerging market: CEMAsys, Diligent, FigBytes, IBM, OneTrust, Persefoni, Salesforce, SINAI Technologies, Sphera, Sweep, UL, Watershed, Wolters Kluwer Enablon, and Worldfavor.

The Sustainability Management Software Landscape, Q1 2024 mapped twenty five providers, with Forrester describing buyer choices in the market as muddied.

The Forrester Wave: Sustainability Management Software, Q2 2024 scored thirteen providers against twenty four criteria across current offering, strategy, and market presence.

FigBytes placed as a Leader with the highest possible score in seven criteria: ESG strategy, vision, roadmap, pricing flexibility and transparency, workflow creation, ESG supplier management, and supplier engagement.

Persefoni placed as a Leader with maximum scores in nine criteria.

Watershed also placed as a Leader, described by Forrester as a well-rounded thought partner with a strong vision built on improving reporting, product carbon footprint calculation, and granular material impact calculation.

The finding that complicates the purchase

Among the themes Forrester identified after its previous evaluation, one stands out: differentiation among these platforms in their core functionality is thin, and getting thinner.

That is an unusual thing for an analyst firm to say in the same research that scores vendors against twenty four criteria, and it should change how a buyer approaches the market.

The reason for the convergence is structural. Core functionality here means ingesting activity data, applying emission factors, and producing output aligned to a reporting framework. The emission factors come from public databases. The frameworks are published standards. The calculation methodology is defined by protocol rather than invented by vendors.

When the inputs, the arithmetic, and the output format are all externally specified, the room for product differentiation is genuinely narrow.

Which relocates the decision. If the calculation is commoditising, what remains are the things around it: the breadth of source system connectors, the supplier engagement machinery, the workflow for collecting data from people who do not want to provide it, the audit trail, and the pricing model.

FigBytes' maximum scores are instructive in that light. ESG supplier management, supplier engagement, workflow creation, and pricing flexibility and transparency are all operational rather than analytical. Three of the four concern getting data out of other organisations.

Most of the number is estimated

The central technical difficulty in this category is that the largest part of most organisations' emissions is not measured by them.

Direct emissions from owned operations, and purchased energy, are reasonably tractable. Meters exist, invoices exist, and the calculation is arithmetic.

Value chain emissions are a different problem. They cover purchased goods and services, transportation, business travel, employee commuting, use of sold products, and end-of-life treatment. For most organisations this is the overwhelming majority of the total, and almost none of it is directly observable.

The practical consequence is that these figures are produced by spend-based estimation. You take how much you spent with a supplier, apply an industry-average emission factor per unit of currency, and record the result.

That method has a well-known property: it responds to price rather than to physical reality. Negotiating a ten percent discount from a supplier reduces your reported emissions by ten percent without a single molecule changing. Inflation increases them.

Vendors are moving toward supplier-specific data and product-level footprints precisely because of this, and Watershed's cited vision around product carbon footprint and granular material impact calculation is a description of that direction. Getting there requires suppliers to provide actual data, which is why supplier engagement scores so heavily, and why it is the hardest part.

For a buyer the useful question is what proportion of a reported figure would be primary supplier data rather than spend-based estimation, and what the platform does to increase that proportion over time. A vendor with a good answer is solving the real problem. One that emphasises calculation speed is solving the easy one.

The business case moved

Forrester identified the drivers for this market's growth explicitly in 2024: the SEC's climate-related disclosure rules, California's climate disclosure legislation, and the EU's corporate sustainability reporting directive.

All three have since become less stable than they appeared when those purchases were justified.

In the United States, the SEC's climate disclosure rules were adopted and then stayed amid litigation, and the Commission subsequently ceased defending them. California's disclosure laws have faced legal challenge, with implementation timing contested. In the European Union, the omnibus simplification package substantially reduced the scope of the sustainability reporting directive, cutting the number of companies in scope and deferring obligations for others.

Stating what has happened is not a view on whether it should have. The point for a buyer is narrower and practical: a software purchase justified primarily by an imminent compliance obligation may now be sitting on a business case whose foundation has shifted.

Three positions follow, and organisations are visibly taking all three.

Some are scaling back, treating the reduced obligation as permission to defer.

Some are proceeding on the view that the direction of travel is unchanged even if timing slipped, that customers and investors ask regardless of regulators, and that the data work takes years whenever it starts.

And some are continuing because the obligation persists for them regardless. Large European entities, companies with listed debt, and suppliers to firms still in scope face requirements that flow down contractually whether or not their own reporting duty survived.

That third group is worth noting, because it is how sustainability reporting propagates. A manufacturer removed from direct scope may still receive data requests from customers who remain in scope, and answering those requires the same infrastructure.

What survives the uncertainty

Set aside the regulatory question and a durable case remains, though it is narrower than the one that was sold.

Energy and resource data collection is operationally useful independent of disclosure. An organisation that cannot see its energy consumption by site cannot manage it, and that visibility has a payback that does not depend on any regulator.

Supplier data infrastructure has uses beyond emissions. The same collection machinery serves supply chain due diligence obligations, product compliance requirements, and the material and provenance data that product-level regulation is beginning to demand in Europe.

And the reporting capability retains value for anyone who has made public commitments, because a target announced without a measurement system is a claim you cannot substantiate, and substantiation requirements around environmental claims have been tightening in several jurisdictions.

What does not survive is the version of the business case built on a single deadline. Forrester's observation that core functional differentiation is thin points the same way: if the product is converging, the value has to come from what the organisation does with it, not from the calculation itself.

The measured position, on the evidence, is that this is a data infrastructure investment with a long payback rather than a compliance project with an end date, and it should be scoped and funded accordingly.

Forrester does not endorse any vendor named here, and tier placement should not be read as a recommendation to buy. Regulatory positions described here change frequently and should be verified against current sources.