Social Sustainability Issues Top ESG Software Spend

August 1, 2022

While environmental issues have dominated the ESG/sustainability narrative, a recent International Data Corporation (IDC) survey finds that social sustainability topics account for the largest share of use cases for sustainability software. These human and social capital uses include diversity, equity and inclusion, employee health and safety, data privacy, human rights, and product access and affordability.

The 2022 Global Sustainability Software Buyer Value Survey provides insight into IT buyers’ priorities and spending intentions regarding software that helps achieve sustainability goals. Sustainability software solutions are designed to help organizations track and report their environmental, social, and governance (ESG) performance and provide relevant data to improve their operational performance.

This requires software providers to think about ESG use cases holistically, especially in the context of complex issue areas such as employee health and wellbeing, decarbonization, and sustainable supply chain management. And given that improving operating costs and fulfilling executive mandates are among the top investment drivers for sustainability software, the software needs to help organizations actively manage their sustainability performance, instead of simply "checking off boxes" for ESG reporting.

"Environmental issues like decarbonization have traditionally topped the list as sustainability priorities for many organizations. However, over the past few years, the impact that the pandemic has had on the workforce has raised the level of emphasis by organizations on social sustainability issues such as employee health, safety, and wellbeing”, said Bjoern Stengel, Global Sustainability Research and Practice Lead, Sustainable Strategies and Technologies at IDC. "Software vendors play a critical role in helping organizations operationalize ESG and move from target setting and strategizing to creating measurable impact in regard to their most material ESG issues."

Other key findings from IDC's survey include:

Addressing social sustainability issues related to human capital management are amongst the top business value benefits that organizations expect to achieve by utilizing sustainability software solutions.

Sustainability/ESG software plays an important role across all use cases related to internal operations, highlighting the need for comprehensive solutions that capture information across different issue areas.

Unlike in previous IDC surveys, respondents to this year's sustainability software survey say that IT plays a bigger role in enabling organizations to track their ESG performance for reporting purposes and driving desired business outcomes. The blend of responsible IT and line of business functions requires software vendors to successfully convey their value proposition to both buyer groups.