If ever there was a moment for Diligent to shine, it is now. With an increasing spotlight on the environmental, social and governance (ESG) practices of companies, the US-headquartered software company is offering businesses a way to simplify it all.
Founded in 1994, Diligent provides a software platform that helps organisations manage governance-related issues more effectively, from governance, risk and compliance and audit to ESG. Its cloud-based subscription service is used by more than one million people in over 25,000 customers worldwide.
ESG reporting in particular has gone from being a “nice to have” add-on to a must-have. It’s a software business that recent research, carried out by analysts for Markets and Markets Research, forecast would reach $1.5 billion by 2027, as more countries require businesses of a certain size to report on ESG.
All of that is good news for Diligent’s Galway office, which has been growing steadily since it was established almost three years ago. The company came to Ireland in 2020, initially locating itself it in the innovation hub Portershed while it was establishing a permanent home for its European hub.
At the time, it had plans to create 200 jobs. Chief executive Brian Stafford says that figure is now at almost 300, and it includes a broad set of roles, from support to accounting and finance to marketing to product development.
“We want to make sure we build a vibrant community here,” said Stafford.
It has been working steadily towards that goal. Aside from the initial 200 jobs it pledged to create, Diligent also acquired Limerick-based Accuvio for an undisclosed sum in 2021. And it is continuing to grow.
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Reporting on ESG is something that might be relatively new to many companies, but it has been on the radar for some time.
“One of the complexities of ESG is various organisations will define it very differently, with some organisations defining it as broadly as possible and other organisations defining it more narrowly and more specific to the environment, climate or carbon footprint. But in any scenario, it is becoming a requirement for organisations to, at the very least, disclose what metrics they have associated with sustainability, their carbon footprint, potentially net-zero commitments, and other stats around diversity and governance,” said Stafford.
“Organisations have taken a wide range of tactics with what they disclose. Some are doing it because it is required by either by the exchanges they operate in or the countries they operate in. There are other organisations which have completely and totally embraced it and said this is a key driver of business.”
At the heart of it all is transparency, Stafford said, with more companies asking what their ESG strategy is and how they can achieve it, and ultimately, where the investment needs to go.
“We are huge fans of transparency and disclosure, and our tools help you do that. Ultimately with more transparency it gives individuals, investors and customers the ability to choose who they ultimately want to work for,” he said. “If some companies take a much more aggressive strategy on that front, then investors or employees will decide where they want to spend their time or their investment dollars, but the first and most important step is actually starting out with disclosing and sharing that information and being public and transparent.”
With the company talking so earnestly about transparency, you would expect them to adopt the same standards. It has; Diligent recently published its own sustainability report, although as a privately held company, it is not yet obliged to do so in the US. But Stafford said it was important to the company to get it out there.
“We are relatively large in size, and we thought it was important to practise what we preach and put our metrics and data out there,” he said.
Diligent has a growing market that is ready for its services, and with that comes growth. It has been helped, in part, by the tech downturn that has seen well-known names shed hundreds of jobs, including Google, Meta and Microsoft. The sudden influx of available talent has helped the company in its search for the skilled people it needs, while at the same time it has avoided the large-scale layoffs seen elsewhere in the tech industry.
“I would say it was tougher to find that talent a couple of years ago than it is now. The job market within tech has cooled down a little bit, and because of that we do find it easier to fill roles get a more diverse set of talents to our company,” said Stafford. “Our business has been a pretty resilient business within tech, as a leader in governance, risk compliance and ESG software. Those are all areas that companies need to maintain or increase their investment and so we’ve been fortunate on that front.”
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One criticism that sustainability initiatives, and other ESG offerings, have suffered from in the past is greenwashing – making a company seem more environmentally friendly through some vague promises or unsubstantiated claims. But that is set to change, with regulatory disclosures from companies that have to be audited and backed up.
“What many companies have done over the last few years has been making proclamations or announcements that are more, I would argue, marketing-related – making net-zero commitments to 2040 a few years ago or whatever commitments that people made,” said Stafford. “Now what is happening, which is different, is people are asking for data and support behind those metrics.”
That means things are getting official – and the penalties for being less than truthful will follow. Diligent’s role is to provide companies with that audit trail, calculating the required information on ESG effectively, and backing it up with data. It also helps companies work across multiple jurisdictions, where regulations and requirements may vary.
“The regulatory and disclosure environment for companies is incredibly complex. And it’s even more complex for multinational companies where every country they operate… requires something different,” said Stafford. “The job of our software is to make that very simple for the organisation.”
Diligent is hoping that its new tool, Board Reporting for Audit, will help with that task. The dashboard streamlines an audit for an organisation’s board, offering up easily digestible intelligence. Internal audit data is consolidated into one dashboard so company boards can monitor controls, track audit plan progress and find important insights that can drive the organisation forward.
And with that new business comes the opportunity for Galway to continue to grow, albeit at a more moderated pace than the past few years.
“We ramped up from having no presence in Galway to having a presence that is approaching 300 over the course last 2½ years or so. We went through a massive phase of growth, competing for every last employee that we could fill our office with here,” said Stafford.” We are now entering a phase of perpetual growth. It’s always our European hub. It’s a fantastic location, great set of people and we expect to continue to grow and add more employees to it.”
