How to Choose Engagement Tracking Software

Most investors use spreadsheets or other office tools for engagement management and tracking. While this might offer a straightforward and flexible setup, it can prove challenging with e.g. data integrity, siloed data, and monitoring progress over time. In this blog, we explain why you need a dedicated stewardship platform and how to choose provider.

Introduction 

Engagement tracking software, Investment Stewardship platform, Sustainability ownership system, - examples of terms used by investors to categorise and describe this kind of solution. It’s reflective of a new and emerging niche of software, with dedicated vendors, like Esgaia.

These softwares primarily address the use cases of activity tracking, progress monitoring, and stakeholder reporting. Focus elements include e.g. data structure and recording, coordination and information sharing, stewardship reporting, and system integrations. 

By centralising stewardship data, optimising workflows and simplifying reporting, these solutions can help increase the overall productivity of involved parties - the ESG and investment teams. But what’s the difference between one provider and another then? Continue reading to find out what questions to ask.

Evaluating alternatives

Many factors come into play in software evaluation processes. Naturally, some are more relevant than others. In this blog, we cover the following six areas with a section for each on their importance and questions to ask software providers: 

1. General business insights

2. Data recording & progress monitoring

3. Statistics & Reporting

4. Data & Operational

5. IT Security, Governance & Development

6. Price model

1. General business insights:

Relevance: Several actors in this niche are either startups with smaller resources, or larger firms but with other core offerings. Questions that prompt insights into the software provider’s track record and future roadmap are therefore important to understanding their different positions and ability to execute. It will help guide your confidence and trust in them as a potential partner that can provide a best-of-breed solution with strong uptake in the market. 

Questions: Consider questions on background and history, customer base (quantity, regions, sizes, covered AuM), and strategic priorities for the stewardship-related offering (short, mid, long-term). Questions about their runway to profitability are also relevant to assess viability, i.e. how close are they to being profitable and what is the likelihood of them surviving a tough economic downturn?

2. Data recording & progress monitoring:

Relevance: For stewardship to become more effective and meet evolving stakeholder expectations, investors need to better assess the status and progress of dialogues over time. From a software perspective, you should be able to ensure complete data capture, monitor progress against asks and objectives over time, capture dialogue sentiment and next steps. 

Questions: Consider questions on how to create records of activities and objectives for specific entities or groups of companies, track escalation activity, and on workspace customisability (e.g. the ability to create and manage record templates, and implement custom fields). Also, make sure to cover workload/engagement program oversight, which can be challenging using office tools.

3. Statistics & Reporting:

Relevance: Stewardship reporting (internal and external) tends to be a burdensome effort devouring resources, especially if data is fragmented, unstructured, or incomplete. You should be able to access and analyse all data, and then export data sets as needed. A bonus is of course if the provider is knowledgeable of industry disclosure frameworks and how the platform can be used to support reporting against these. 

Questions: Consider questions on data collection and export capabilities, e.g. is statistics accessible via analytics dashboards, and can data be extracted across firm, portfolio, entity, objective and interaction level. Possible graph libraries or dedicated disclosure services can also be of interest to help support analytics and reporting.

4. Data & Operational:

Relevance: This area covers aspects of how the platform helps alleviate stewardship-related data and operational silos, information sharing practices, and available system integrations. Importantly, you want to be able to integrate the platform into existing workflows to share active ownership data more effectively across systems and teams, while benefitting from the purpose-built features.

Questions: Consider questions on portfolio mapping, if the platform accounts for holding periods over time (for accuracy in portfolio-level statistics and reporting), how entity management works, what system integrations are available, and user support/guidance.

5. IT Security, Governance & Development:

Relevance: Companies today take their own and users’ data very seriously and want to have full control over who is handling what information, and how that information is stored, processed and secured. You want to ensure the provider has adequate policies and practices in place to meet your requirements in this area.

Questions: Consider questions on data security, incident response and vulnerability management, physical security and data centers, compliance and regulatory requirements, and product development and maintenance.

6. Price model:

Relevance: This one is pretty self-explanatory. As companies increasingly make use of external SaaS solutions to address specific areas, the cost of such services is an important factor in decision-making.

Aside from the choice between build vs buy, given the pricing will look different between providers, consider a scoring framework to more objectively assess pricing and its weight in the full evaluation. Further, service levels will be impacted depending on if the solution is their core product or part of a range of services, so consider requesting an SLA to ensure consistency.

Questions: Consider questions on what the fee structure looks like and what is included, e.g. as it regards onboarding and upload of historical data, user/seat fees, integrations, and possible custom requests. 

The leading investment stewardship platform provider:

If you’ve read this far, it’s likely you’re currently evaluating this. To support your assessment, please see this RfP template based on insights from several RfPs/RfIs we’ve participated in. 

Esgaia is the leading stewardship platform provider globally. Investors use our platform to e.g.:

• manage engagement and voting data in one place

• record, monitor, and report on activities and objectives

• analyse manager stewardship and engagement coverage

• use a graph library and disclosure services for simplified reporting

//The Esgaia team