In today’s high pressure business landscape, sustainability is no longer a nice-to-have but an imperative to stay competitive with customers, investors, talent, and other stakeholders.
Sustainability leaders recognize that purpose-built software to streamline and centralize data collection and reporting is crucial for them to reach their objectives, yet they often face an uphill struggle to secure budget.
This guide will help you build your business case with recommendations on key points, types of supporting data, stakeholders to engage, and benefits of sustainability management software for you to gain budget approval to invest in a software solution.
Contents
- Quantify the Benefits
- Align Improved Sustainability Strategy to Business Value
- Link Sustainability to Corporate Goals
- Engage Stakeholders Early
- Prepare a Detailed Budget Proposal
- Solidify Your Business Case
1. Quantify the Benefits
You should have a rationale for why you want dedicated sustainability management and reporting software with the benefits you expect it will provide.
Numbers speak louder than words. If you suggest this purchase will make sustainability reporting more efficient, can you quantify how many hours it will save you? Be sure to focus on factors that drive business value including efficiency gains, cost savings, revenue growth, and risk mitigation.
To support you in quantifying direct impact, this first step takes a look at typical benefits companies have seen by implementing sustainability reporting software with helpful figures based on research done by Forrester Consulting on behalf of carbon accounting and ESG software vendors. While the results will vary by company, the numbers referenced are the best publicly available data to the direct return on investment sustainability management and reporting software can offer.
Efficiency gains – Consider the general and administrative tasks sustainability team members oversee and the proportion of their time as well as the number of hours they dedicated to each task. Review the following tasks and the efficiency gains Forrester uncovered to see if they may align to your team’s responsibilities.
Sustainability Task Analysis
| Sustainability Task | Potential Time Reduction with Software (from Forrester) | Estimated Cost of Work per Hour (from Forrester) |
|---|---|---|
| Collect, validate, and (internally) share emissions data | 60-80% time reduction | US $39/hour |
| Aggregate, calculate, and report emissions data | 50% time reduction | US $38/hour |
| Complete and file regulatory and voluntary sustainability reports | 20-40% time reduction | US $45/hour |
Cost savings – Along with the per hour savings due to greater efficiency, demonstrating fully avoided costs, or hard cost savings, can strengthen your case for software. Common expenses sustainability programs incur stem from external audits and from commissioning external consultants. Forrester Consulting uncovered cost-savings that software can provide through interviews with carbon accounting and ESG software users.
Sustainability Cost Analysis
| Sustainability Cost | Total Cost Reduction with Software (from Forrester) | Estimated Annual Cost Before Software (from Forrester) |
|---|---|---|
| Auditing costs | 50% reduction | US $156K over 3 years |
| Outsourced consultancy fees | 100% reduction | US $1.1M over 3 years |
Revenue growth – It can be tricky to quantify the impact sustainability management and reporting has on revenue growth, as it tends to impact sales are marketing more indirectly via reputation and product innovation than directly.
In KPMG’s 2024 Sustainability Organization Survey, results show that respondents believe “Identifying risks and opportunities for business growth,” “Developing new products or services with a sustainability focus,” and “Enhance brand reputation and market positioning” are three of the top four areas (from 12 overall) where respondents used ESG insights from reporting data to support their broader business objectives or strategy.
Section 2 of this guide provides more depth for how an improved sustainability strategy benefits organizations, specifically Access to Customers and Stronger Reputation to support this component of business value.
If you need more data to support this component, then do some research on case studies of successful green rebranding or gather intelligence on competitors that promote sustainability to support your case.
Risk mitigation – No one gets excited to spend money reducing risks; ideally, risks would take care of themselves. Unfortunately, risks are everywhere in business. Environmental risk (think natural disasters or resource scarcity), compliance risk (new regulations or stakeholder transparency requirements), and reputational risk are all directly related to sustainability at your firm.
Risk mitigation ties into the other three parts of this section nicely. Is inefficiency leading to human error and risk of mistakes in official reports? What’s the opportunity cost of higher overhead for your sustainability reporting, and does that lead to risk? Might your revenue be at risk if you fall behind your competitors based on perceived sustainability performance or reputation?
Drawing a line between improved risk visibility and greater confidence in compliance can reinforce your business case for sustainability management software. See Section 2 for more details on compliance risk and potential penalties, specifically.
2. Align Improved Sustainability Strategy to Business Value
Employing numbers to support how software can improve your sustainability programs and initiatives is a strong way to share how it will benefit your initiatives. But tying an improved sustainability program to greater business benefits, you’ll have created a more robust case for securing budget for your team.
Sustainability is often, wrongfully, perceived as a cost center. This perception will frame budget requests as expenses versus investments, which have very different connotations with finance teams and executive leadership.
Consider the value your sustainability initiatives provide the company and how investing in your department’s success can lead to better business outcomes. A 2023 Infosys survey of 2,500 executives found that 90% of them believed their sustainability and ESG initiatives showed moderate to significant positive financial returns.
Pinpointing specific benefits of strong sustainability strategies and programs, such as the ones listed below, can provide a compelling case.
Common benefits of sustainability programs include-
Greater access to customers
- In both business-to-consumer (B2C) and business-to-business (B2B) segments, customers are becoming more selective with the companies from whom they buy.
Accenture’s 2023 Consumer Pulse Survey showed 83% of respondents increased their sustainable shopping in the last 12 months, and the environment was the second biggest concern for the next 6-12 months, ahead of personal financial situation.
On the B2B side, there’s been an emergence of companies implementing sustainability requirements for their suppliers. Walmart’s Project Gigaton is one of the most successful cases of a supplier sustainability program. Others, such as Intel, AMD, and DuPont with the Semiconductor Climate Consortium, have banded together taking a united approach to sustainability expectations of business partners. Many others have supplier codes of conduct or employ EcoVadis to engage with their partners on sustainability.
If you aren’t demonstrating serious consideration to sustainability with data to support your efforts and progress, your business could be missing out on key customer segments and may face challenges maintaining your existing customer base.
Look at who your business sells to and identify if there are risks or opportunities that a stronger sustainability strategy can directly impact.
Reduced compliance risk
- Voluntary sustainability disclosure standards like GRI, SASB, and CDP are nothing new to many organizations; however, by virtue of being voluntary, the stakes of good versus inadequate reports have been difficult to quantify. Regulations in the EU like CSRD and California with SB 253 and SB 261 along with the adoption of ISSB standards in multiple countries have changed this perspective.
As penalties for regulatory non-compliance such as fines, disqualification for government contracts, or even permit refusal continue to take shape, the ability to comply with different sustainability disclosure standards is becoming more imperative.
On the opportunistic side, streamlining compliance can open your business to new markets for an advantage over competitors that are slower to adapt. Even if your company is fortunate enough to avoid such regulatory demands, think of your current and future customers and how they may need to disclose supply chain data that includes your performance. The decision not to invest in your sustainability success is, itself, a decision.
Greater access to capital
- Whether your company is a boot-strapping start-up or a cash-rich enterprise, your ability access to additional capital and investment is important to the business at large. Don’t make assumptions based on your knowledge alone, since other parts of the business may have priorities that require raising additional capital for their expenditures.
Banks and investors look at sustainability risks and opportunities with their loan and equity plans. Evidence of public sustainability disclosures reduce risk and can help improve your company’s position and terms in capital engagements.
Stronger reputation
- Brand equity and reputation can be hard to quantify; however, individual components such as appealing to customers’ green interests, maintain strong cash flow and credit, preventing scandals, and promoting corporate responsibility all contribute to your company’s perception.
Deloitte observed in its 2024 Sustainability Action Report that executives at publicly traded companies with over $500 million in annual revenue stated that brand reputation was the top business outcome they expected to see from enhanced ESG reporting.
Hopefully, you can draw the connection of these components building upon each other. Meeting customer, regulator, and investor demands while increasing brand equity via strong sustainability performance align for potential to improve profitability and shareholder returns.
To help contextualize these components, see if you can find any reports for your industry that highlight customer trends with regards to sustainability and reputation and identify sustainability reporting and performance regulatory requirements in jurisdictions where you do business including regulations to which your customers expect you to comply. If you are aware of any initiatives related to raising capital or brand equity, include those details too. Aligning to specific corporate goals, such as these, leads us to the next section.
3. Link Sustainability to Corporate Goals
Generic benefits of a strong sustainability strategy are helpful, but tying outcomes to your company’s specific mission and goals will likely resonate even more. Here are a few areas to look for inspiration to align with objectives that will resonate with senior leadership.
- Sustainability charter. You may not have an official charter, but at least reference why your company decided to have a sustainability strategy or program in the first place. Reminding your audience of this is the most direct line to value since it uses another person’s idea to advocate for your objective.
- Corporate values and mission. Businesses of a certain size and maturity often establish corporate values and a mission often with hints toward altruism. If your company states it wants to make the world a better place, then you can tie better a better sustainability strategy supported by software as a means to achieving this corporate mission.
- Official reports. Look at the goals and momentum stated in your previous sustainability report; are you living up to them or could you be making progress faster? If your organization is publicly traded on a US exchange, then it’s required to list risk factors in Item 1A of its annual 10-K report. Item 1: Business and Item 7: Management’s Discussion and Analysis (MD&A) can also offer insights on specific areas where sustainability may impact the business observations.
- Leaders within the business. Remove doubt and make as few assumptions as possible, ask colleagues, especially those in leadership roles, if they are aware of or involved with any initiatives or strategies where sustainability performance might be a variable.
4. Engage Stakeholders Early
Involving key stakeholders from the beginning is a valuable step to reinforce for your proposal. By engaging stakeholders from the outset, you have the opportunity to understand, address, and incorporate their insights, expectations, and concerns ahead of presenting your proposal.
In your engagements, you may find motivated advocates or vocal detractors, both of which provide details for topics you’ll need to address for your proposal to succeed. There will always be tradeoffs when budgets are limited, so keep in mind that other people’s priorities that be downgraded should your software requisition succeed.
Stakeholders you involve will feel a greater sense of ownership (even if it’s minimal ownership versus none at all) making it harder for them to impulsively reject your proposal. People are more likely to reject a proposal when they have invested zero time, energy, or thought to it ahead of the formal budget request. Asking individuals for guidance and appealing to their expertise before asking for budget can soften their opposing stances.
A single engagement may not be enough. Maintaining communication throughout your proposal process and getting feedback will help ensure your project aligns with stakeholder requirements and goals. If you successfully address stakeholder suggestions, concerns, and objections, then you will gain additional support for your initiative and investment in sustainability software.
Who to involve:
- Executive Sponsors: Identify and engage executive sponsors who can champion your cause at the leadership level. How well do you know the budget owner? Which executives are motivated to improve your sustainability performance and disclosures? If your company is public, there may be transparency related to sustainability in executive compensation packages.
- Information Technology: Understand the technology evaluation process for your firm. Is it limited to a questionnaire and proof of security certifications like SOC 1 and 2 or is it more rigorous with penetration test scores or more? You don’t want to spend time with potential vendors who will not pass your IT tests, nor do you want IT due diligence to delay your purchase.
Establishing this connection early will build trust, lower resistance, and help your IT prepare ahead of their evaluation.
- Cross-Functional Teams: Will you or your team be the only ones using this sustainability platform? Getting feedback from the teams you collaborate with for sustainability reporting including the challenges they face by not having a dedicated solution, will help you to build broader support. This can typically involve finance, legal, facilities management, EHS, and others depending on your industry. The key with these stakeholders is to make it easy for them to support you, and address how supporting your software proposal will make their jobs easier too.
5. Prepare a Detailed Budget Proposal
Hopefully, this guide has demonstrated that the actual money spent is only part of the proposal, and the rationale behind it can carry as much, or more, weight. Furthermore, you may not have clear details on the costs until it’s nearly time to submit your budget request; vendors typically expect qualification and demos before disclosing price. Build most of your proposal ahead of time, so adding in costs can be a reasonably simple exercise of plugging in numbers.
How to break down the costs:
- Initial Costs: The majority of cloud-based platforms today follow a subscription or SaaS model where you will pay for use on an annual basis. Frequently, there are also start-up costs that can involve implementation, configuration, training, and other service expenses.
- Ongoing Costs: Annual charges for access to the software may not be the only recurring costs. Be sure your vendors are clear if there are support fees, if updates are included or extra, and if there are usage limits or potential overages.
- Cost-Benefit Analysis: With the initial and ongoing costs understood, be sure to evaluate the value each vendor provides for the prices they quote. Outside of the generic benefits of sustainability software and stronger sustainability programs that they can help support, it’s important to scrutinize what each of your shortlisted vendors is offering you within the quote price.
- Are they pushing product features that you might never use?
- Are they underselling to win your business with a low price, and you’ll find later that important capabilities require an upgrade?
- Are there non-software components like dedicated customer success that may enhance the value of their offering?
Demonstrating a thoughtful evaluation including strengths, limitations, and risks with each solution – even if you are confident you’ve made your vendor decision – provides evidence to the budget holder that you went through proper diligence.
6. Solidify Your Business Case
Hopefully the guidance thus far has helped you tie improved sustainability management and reporting to the greater business’s goals with data and context to support your position against the costs of adopting your software solution of choice. Ask yourself these final questions to make sure you’ve tied up as many loose ends as possible.
- Do the conclusions and numbers you’re presenting make sense? Getting a second opinion can help sense check your work. If you feel like any of your conclusions are a stretch, then remove them. Sound logic without numbers is stronger than numbers that won’t survive scrutiny.
- Are there any outstanding objections to your initiative? Settle as many objections as you can and acknowledge the rest to avoid last-minute setbacks.
- Are there alternatives to software that may present a challenge?
- Do you have any competitors that have made a splash with sustainable positioning, and might competitive threat help your case?
- What is the cost of doing nothing and how can it support your proposal?
- Who will take ownership of the solution once it’s purchased?
- Working backwards, by what date do you want the software to be implemented and how long does the vendor expect implementation to take?
- Are there other reasons to support urgency of doing it now versus waiting?
- Have you engaged with advocates or other sponsors who will add extra support?
Conclusion
There are many benefits to purchasing sustainability management and reporting software to help your team meet its goals more efficiently and with greater confidence as outlined in this guide.
While not every company will require you to construct a robust budget proposal to secure software to support your initiatives, professionals who do face this hurdle will find that a well-anchored business case with quantified benefits and alignment to business goals will put you in a stronger position to overcome objections. Scouting for allies by involving stakeholders from the outset and meticulously planning the budget, you can effectively advocate for the software’s adoption.
It can take a lot of effort, but if successful, you will help your organization not only meets its sustainability targets but also enhance its overall operational efficiency, market competitiveness, and lead positive impacts to communities, the environment, and other stakeholders.