Category: ESG and Sustainability

Gen AI, Sustainability, and a New Workforce | Podcast

August 16, 2024

Catch Everest Group’s Rita Soni in this podcast as the speakers delve into the environmental and social impacts of generative AI starting with the workforce of the future. They explore how impact sourcing can help mitigate AI’s looming energy crisis. Discover why tech companies are hiring and training people from disadvantaged communities and why this strategy will be crucial in the coming years as the demand for AI continues to grow.

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Greening the Games: Sustainability at the Paris Olympics 2024 | Blog

August 14, 2024

Mega events should and could represent the best of us in sustainability!

Mega events like the Olympics are celebrated for bringing the world together and showcasing the pinnacle of human achievement, but they also carry a significant environmental burden…

The vast scale of these events demands extensive resources, from the construction of venues to the transportation of athletes, officials, and spectators, all of which contribute to a substantial carbon footprint. This environmental impact extends beyond carbon emissions, affecting local communities through resource consumption, waste generation, and sometimes even displacement.

The need to incorporate sustainability into these events has never been more pressing. As the world grapples with the realities of climate change, events like the Olympics have the potential to either exacerbate the problem or contribute positively to global efforts. If deliberately responsible, mega events can leave a lasting positive legacy on the world, promoting sustainable practices, boosting local economies, and enhancing community well-being. Conversely, managing irresponsibly can lead to environmental damage, financial waste, and even greenwashing.

A recent example is the 2022 FIFA World Cup in Qatar, which advertised itself as the first carbon-neutral tournament of its kind. Despite these claims, experts raised serious doubts, suggesting that the goal was achieved more through creative accounting, than through meaningful reductions in carbon emissions. This has underscored the importance of transparency and genuine commitment in sustainability efforts, particularly for events of this scale.

The Paris Olympics 2024, set in the same city where the historic Paris Agreement on climate change was adopted, represented a critical opportunity to demonstrate how large-scale events could reduce their environmental impact. By prioritizing sustainability, the games now finished, can set a new standard for future events, ensuring that they contribute to the fight against climate change rather than detract from it.

A look back: sustainability in past Olympics

The Olympic Games in Paris have made notable strides in sustainability, each building on the lessons of its predecessors. The 2000 Sydney Olympics emphasized energy efficiency and recycling, while the 2012 London Olympics excelled in water conservation, sourcing 40% of its water from recycled rainwater.

The 2020 Tokyo Olympics introduced hydrogen-powered transport and used recycled materials in infrastructure, but still faced criticism for its carbon footprint. The 2022 Beijing Winter Olympics showcased innovative technologies like natural CO2 refrigeration and solar power, yet struggled with the environmental demands of winter sports. Despite these advances, challenges such as high costs, balancing sustainability with attendee experience, and the difficulty of accurately measuring progress and impact persist, in the process making the journey towards seeing a truly sustainable ‘mega event’ complex and ongoing. These efforts highlight both the progress and challenges in making such large-scale events truly sustainable, setting the stage for the ambitious goals of the Paris Olympics 2024.

Paris 2024: a blueprint for sustainable games

The Tokyo Olympics in 2020 is estimated to have produced 2.73 million tonnes of CO2, despite having almost no spectators. The Paris Olympics 2024 has set an ambitious target to be the greenest games yet, aiming for a 50% reduction in carbon emissions, compared to the average of London 2012 and Rio 2016. This commitment to sustainability is woven into every aspect of the event, from the construction of venues to transportation and energy use.

Key measures include:

  • Use of existing infrastructure: Paris 2024 will use 95% existing or temporary venues, reducing the need for new construction and minimizing the environmental impact associated with building new facilities.
  • Renewable energy: The games will be powered by 100% renewable energy, with a focus on local sources like wind and solar power.
  • Sustainable transportation: The event will promote the use of public transportation, cycling, and walking for spectators, and electric or hybrid vehicles for official transport. Over 80% of venues are within 10km of the Olympic Village and all are served by public transport. The vehicle fleet has been trimmed by 40% compared to previous games, with electric, hybrid and hydrogen vehicles.
  • Implementing a circular economy strategy: This is to be based on three principles: using fewer resources, making better use of resources, and ensuring resources have a second life after the games. For example, 75% of sports equipment will be rented or loaned, and 75% of screens, computers and printers will be rented.

The role of technology service partners in achieving sustainability:

Service providers play a crucial role in helping mega events like the Olympics achieve their sustainability goals. By leveraging advanced technologies and innovative solutions, these partners can significantly reduce the environmental impact of such large-scale events. For instance, information technology (IT) providers can optimize energy use through smart infrastructure management, utilizing data analytics and artificial intelligence (AI) to monitor and adjust energy consumption in real-time. This not only reduces waste but also enhances the efficiency of operations across venues.

Cloud computing and virtualization technologies also enable organizers to minimize the need for physical infrastructure, reducing both the carbon footprint and the resources required for construction and maintenance. Additionally, IT service providers can offer robust carbon tracking and reporting tools, ensuring transparency and accuracy in measuring the event’s environmental impact. These tools are essential for validating sustainability claims and avoiding accusations of greenwashing.

Moreover, digital platforms powered by these providers can facilitate sustainable practices among attendees, such as promoting the use of public transportation or enabling waste reduction through digital ticketing and cashless transactions. IT services also enhance communication and coordination among stakeholders, ensuring that sustainability initiatives are effectively implemented and monitored throughout the event.

Key partners such as Atos, Deloitte, and Schneider Electric are already making significant contributions to the Paris Olympics 2024. Atos, as the Worldwide IT Partner, implementing DevSecOps practices and deploying nearly 600 containerized microservices, which reduce the need for physical servers and enhance operational efficiency.

Deloitte has entered a decade long partnership with the International Olympic Committee to digital transformation, sustainability, and DEI initiatives, including launching a maturity assessment tool to advance gender equality and inclusion in event planning. Schneider Electric, leveraging EcoAct, is helping the Games achieve their goals with carbon offset management and consulting. Deloitte provides strategic consulting to develop comprehensive sustainability strategies, and Salesforce helps manage stakeholder engagement and sustainability reporting. Together, these IT service providers are instrumental in turning ambitious sustainability goals into reality, ensuring that the Games are not only a showcase of athletic excellence but also a model for environmental stewardship.

The future of sustainable sports events:

The Paris Olympics 2024 are setting a new benchmark for sustainability in mega events, but this is only the beginning. As technology continues to advance, future Olympic Games, and other major sporting events will have even greater opportunities to reduce their environmental impact. Emerging technologies such as AI-driven energy management, advanced carbon capture methods, and more efficient digital platforms will enable even more sustainable practices.

Looking ahead, sustainability enablement technology services will not only reduce the carbon footprint of sports events, but also enhance the fan experience by providing real-time data on environmental impact, interactive platforms for eco-friendly engagement, and more. The future of sports is not just about breaking records on the field but also about setting new standards for environmental stewardship.

Conclusion

The Olympics have always represented the pinnacle of human capability and achievement, bringing together athletes and nations from across the globe in a celebration of excellence and unity.

The Paris Olympics 2024 are not just a stage for athletic prowess, but a platform to showcase the very best of what humanity can achieve in terms of sustainability. By partnering with leading technology and service providers, the organizers are demonstrating that it’s possible to host a world-class event while significantly reducing its environmental impact.

As these games have unfolded in front of our very eyes, now let them be a testament to our collective commitment to a sustainable future, where the spirit of competition is matched by a dedication to preserving our planet for generations to come. As the curtain has come down on the greatest spectacle on earth, these Olympics will now represent the normalizing of a people and planet optimistic mission.

Future-proofing Insurance: Embracing Sustainability in Insurance for a Resilient Future | Blog

July 17, 2024

Sustainability in insurance transcends traditional practices, weaving Environmental, Social, and Governance (ESG) elements into the core of day-to-day operations, thereby safeguarding the future of stakeholders and the planet. In this evolving industry, embracing sustainability is no longer optional but essential for mitigating climate risks, meeting regulatory demands, and ensuring long-term value in a world facing complex environmental and social challenges. Reach out to us to explore this topic further.

The shift toward sustainability in insurance

Sustainability is becoming increasingly critical in the insurance sector due to the escalating unpredictability of losses driven by climate change, economic instability, and social inequalities. As per a report by the National Oceanic and Atmospheric Administration (NOAA), in 2023 alone, the United States witnessed 25 climate-related disasters that each resulted in damages exceeding US$1 billion, nearly doubling the annual average from the previous five years and leading to 464 fatalities. Such extreme weather events, occurring in regions where they were previously uncommon, are compelling insurers to acknowledge their responsibility in environmental protection. Additionally, shifts in consumer behavior are influencing the move towards sustainable practices. A growing number of consumers, about 25%, are now willing to pay a premium for environmentally friendly products, such as electric vehicles and sustainably sourced clothing, expecting that the companies they patronize uphold similar ethical standards.

Regulatory changes are also pushing the insurance industry towards greater transparency and sustainability. In the first half of 2023, there were over 1,715 adjustments to the US state insurance regulations, many of which address climate issues. A notable example is the California Climate Risk Disclosure Survey, which requires insurers to disclose how they are managing climate-related risks. Moreover, entities such as the Securities and Exchange Commission (SEC) are preparing to enforce new mandates requiring climate risk disclosures, potentially impacting publicly traded insurance firms that do not proactively address climate change.

As a result, insurers have started developing and offering new products across personal, commercial, and specialty lines. In personal lines, companies have begun offering green property insurance, which covers eco-friendly materials and energy-efficient upgrades following a loss, as well as discounts for hybrid or electric vehicle owners to encourage sustainable transportation choices. In commercial lines, insurers in geographies like the US and EU now provide insurance for renewable energy projects and green building coverage, helping businesses transition to sustainable practices. These include coverage for renewable energy equipment, green construction materials, and tools to manage climate-related risks. Specialty lines see innovations driven by InsurTech, such as parametric insurance for climate risks and the use of IoT devices for real-time environmental monitoring, enhancing risk mitigation and encouraging eco-friendly behaviors.

Sustainable insurance in action

Insurers integrating sustainable practices into their value chains include:

  • AXA (2015), launching the AXA Climate School to educate clients on climate risks, enhancing client trust and risk management
  • Zurich Insurance Group (2017), initiating the Zurich Forest Project for reforestation, boosting their brand reputation and environmental impact
  • Allianz (2018), incorporating ESG factors into underwriting and investments, improving investment resilience and attracting ESG-conscious clients
  • Swiss Re (2019), ceasing re/insurance for the most carbon-intensive oil and gas companies, aligning with climate goals and reducing exposure to high-risk industries
  • Aviva (2020), setting a net-zero carbon target by 2040, enhancing long-term sustainability and appealing to eco-friendly investors
  • Munich Re (2021), investing in green bonds and applying ESG criteria to their investment portfolio, supporting sustainable projects and strengthening their market position in the green economy

Currently, while the integration of sustainability into corporate strategies is becoming crucial for many firms, the actual implementation of these strategies in a tangible way remains a very early stage for many companies. According to a global survey, 25% of insurers identified “grasping ESG-related regulations and guidelines” as their primary challenge in advancing their ESG initiatives. This was followed by 17% who cited “determining the most effective actions to take on ESG” as a key hurdle and 15% who pointed to “aligning ESG efforts with customer expectations” as a significant concern.

Challenges in implementing sustainable insurance

Besides the difficulties of managing risks in a world altered by climate change, the insurance sector also contends with issues arising from regulatory, operational, and market-related complexities.

  1. Regulatory uncertainty – Insurers need to navigate a complex web of local and international ESG-related regulations that can vary significantly from one jurisdiction to another. The lack of standardized regulatory frameworks makes it difficult for global insurance companies to implement uniform strategies across all markets. This regulatory complexity requires insurers to invest heavily in legal expertise and compliance functions to ensure they meet all applicable guidelines
  2. Lack of standardized metrics and data deficiency – The insurance industry relies heavily on accurate data to assess risks and set premiums. However, there is currently no universally accepted methodology for quantifying ESG risks, which complicates the integration of sustainability into traditional risk models. This lack of standardized data not only hinders the assessment and pricing of risks but also makes it difficult to track progress and measure the impact of sustainability initiatives
  3. Liability risks – One of the significant challenges for insurers in implementing sustainability is managing liability risks stemming from compensation claims related to climate change damages. As climate change increases the frequency and severity of extreme weather events, the potential for substantial claims also rises, impacting the liability side of insurers’ balance sheets. Additionally, there is an increased risk of litigation, with insurers potentially facing legal challenges for failing to manage or disclose climate-related risks adequately
  4. Affordability and availability of coverage – Affordability and availability of coverage pose significant challenges in implementing sustainability in the insurance industry. As climate change leads to more frequent and severe natural disasters, insurance costs rise, making coverage less affordable. High-risk areas, such as flood or hurricane-prone regions, for example, face higher premiums or loss of coverage, leaving communities vulnerable. This not only affects individual policyholders but also has broader economic implications, leading to underinsurance or no insurance in these zones
  5. Aligning sustainability with market and customer expectations – Insurers must balance the need to implement sustainable practices with the need to remain competitive and meet the expectations of their clients. This involves developing new insurance products and services that not only comply with ESG standards but also appeal to a market that is increasingly sensitive to sustainability issues

Shaping tomorrow’s insurance industry

In the insurance sector, several unpredictable developments stand out, including emerging risks such as an aging population, climate change, and cyber threats, along with the rise of the sharing economy affecting freelancer, auto, and home insurance markets and the integration of technology in the smart economy. Social factors, such as evolving consumer expectations for corporate responsibility and equitable services, also play a crucial role, as do governance issues like regulatory changes and corporate transparency. While accurately forecasting the future remains a challenge, identifying catalysts for market changes is possible. By combining historical data with industry insights, we can use a specifically designed model to construct various future scenarios. These scenarios illustrate potential outcomes and opportunities driven by key trends in environmental, social, and governance (ESG) aspects under different conditions [Exhibit 1]. With this approach, we can strategize effectively, choosing paths that optimize financial gains, enhance social impact, or minimize risks.

Slide1 1

Driving sustainability in insurance is not just about compliance with regulatory changes and risk management; it also involves capitalizing on new opportunities and fostering a more sustainable, resilient world. As financial intermediaries and risk managers, insurers have a unique ability to drive and support sustainable practices across different industries and communities. The following strategic key objectives present a structured approach for insurance companies to embed sustainability into each stage of their value chain, along with key performance metrics to align with broader societal goals [Exhibit 2].

Slide2

By embedding sustainability into its core identity and fostering innovation, the insurance industry can go beyond managing risks to actively stewarding the planet and its people. This transformation will not only reshape the industry but also significantly contribute to a sustainable, resilient, and equitable global future.

To discuss more on the importance of sustainability in the insurance space, please reach out to Debasruti Mitra at [email protected] and [email protected]  and stay updated by accessing Everest Group’s latest research on Insurance Business Processes.

Watch the webinar, What’s Next in Financial Services? Driving Transformation Through Sourcing, Technology, and Operations, to learn how the banking, financial services, and insurance (BFSI) industry is driving business transformation in response to evolving customer needs and the rapid adoption of AI and cloud technologies.

Sustainability in Retail and CPG: A Reactive Approach Will No Longer Work | Blog

July 4, 2024

With increasing customer preferences for environmentally friendly products and evolving government regulations, retail and consumer packaged goods (RCPG) enterprises are being compelled to embrace sustainable practices. Read on to learn how they are actively engaging with the rapidly evolving sustainability technology ecosystem to expedite their ESG journeys.

Contact us to speak to an analyst on this topic.

Sustainability has long been a pivotal issue, but changing consumer behavior, a shifting regulatory landscape, and escalating climate change impacts have intensified pressure on industries to address their Environmental, Social, and Governance (ESG) footprint. Our recent research revealed that:

79% of consumers are willing to switch brands based on their environmental and social practices.

5% of revenue is the cost of waste and waste disposal on average for retailers and CPG companies.

Companies with consistently high ESG performance tended to score more than 2x on total shareholder return than those with medium ESG performance.

The retail consumer packaged goods (RCPG) industry is now more committed than ever to sustainable practices, recognizing the urgency of integrating sustainability in retail and CPG operations. This involves mitigating climate risks, enhancing long-term resilience, and contributing to a sustainable future through technological investments, product innovation, supply chain optimization, and transparent disclosures. Many firms have embarked on the journey to become purpose-driven organizations, embedding sustainability into their core business strategies.

From our analysis, the following key areas emerge:

  1. ESG data management: Centralized systems for collecting and analyzing ESG data help companies track their sustainability performance and identify areas for improvement. These systems enhance operational efficiency by automating data collection and reporting processes.

For instance, Walmart leverages an ESG data management system to track and report its sustainability performance, focusing on monitoring energy consumption, carbon emissions, and waste management

  1. Supply chain traceability: Advanced technologies like blockchain and IoT enable companies to monitor their supply chains in real-time, ensuring transparency and accountability from source to shelf. This helps in managing ethical sourcing and reducing the risk of supply chain disruptions.

For instance, Nestlé uses blockchain technology to track milk and palm oil supply chains, ensuring sustainable and ethical sourcing while providing transparency from origin to the final product

  1. Climate risk analytics: Predictive analytics tools assess the impact of climate change on business operations, enabling companies to proactively mitigate risks. These tools support scenario planning and help attract investment by demonstrating a commitment to managing environmental risks.

For instance, PepsiCo uses predictive analytics tools to evaluate the impact of climate change on agricultural supply chains. This allows the company to develop strategies to mitigate risks related to crop yields and water availability, ensuring long-term sustainability

  1. Circular economy practices: Embracing circular economy principles, such as using recycled materials and designing products for longevity, helps reduce waste and resource consumption.

For instance, SHEIN has launched a new apparel collection made from “deadstock,” the excess, unsold, and leftover fabric inventory that is typically discarded by fashion brands. SHEIN is utilizing Queen of Raw’s proprietary software, Materia MX, to source existing materials from brands and retailers looking to responsibly clear out their excess fabric inventory rather than have it go to waste in landfills

  1. Sustainable Consumer Experience: Digital labels and QR codes provide consumers with detailed information about the sustainability attributes of products, enhancing transparency and building brand loyalty.

For instance, Patagonia uses QR codes to provide customers with detailed information about product sustainability, enhancing consumer trust and reducing the need for single-use tags, thereby promoting a more sustainable consumer experience

  1. Waste minimization: Advanced inventory management systems and IoT sensors help companies monitor stock levels in real time, reducing waste from overstocking and spoilage.

For instance, Tesco uses IoT technology for real-time inventory tracking, reducing waste from overstocking and spoilage, enhancing sustainability by ensuring products are sold before expiration

A framework to guide RCPG enterprises in their sustainable business model transformation journey

As enterprises navigate the transformation to derive more value from their sustainability investments, The Everest Group framework for guiding Retail Consumer Packaged Goods (RCPG) enterprises in sustainable business model transformation involves four key steps: Commit, Define, Invest, and Sustain. This approach provides a structured path to integrating sustainability into core business strategies.

sustainability blog

 

The outlook for sustainability in retail and CPG

Consumer demand for sustainable products continues to rise as awareness of environmental impacts grows. This drives innovation and investment in sustainable practices, resulting in new products and business models that prioritize sustainability. Companies that embrace these changes will build stronger, more resilient brands. Ultimately, successful companies will be those that integrate sustainability into their core strategies, ensuring every aspect of their operations is environmentally mindful. This approach not only contributes to a healthier planet but also creates value for stakeholders and ensures long-term success in an increasingly eco-conscious marketplace. By embedding sustainability into their business models and leveraging advanced technologies, retail, and CPG companies can achieve environmental goals while driving growth and profitability.

Everest Group will continue to follow the evolution in this space. To discuss sustainability in retail and the CPG industry, please reach out to Abhishek Mundra, [email protected], Ambika Kini, [email protected], and Shraddha Pandey, [email protected].

How to Integrate Sustainability into Procurement Practices and Impact Sourcing with Everest Group’s Rita N. Soni | Podcast

May 15, 2024

In this podcast, Everest Group’s Rita Soni emphasizes the importance of integrating sustainability into procurement practices, highlighting impact sourcing to address social inequities. By prioritizing hiring from marginalized communities or supporting initiatives like second chance hiring, businesses can not only create positive societal impact but also gain tangible benefits such as lower absenteeism and higher retention rates.

As businesses seek to expand into new markets, particularly in emerging economies, Rita Soni underscores the significance of patience and understanding local dynamics. Partnering with local providers, leveraging recruitment firms, and investing in training initiatives are essential steps to navigate the challenges and capitalize on the opportunities presented by diverse markets, ensuring sustainable growth and success.

Tune into the podcast

From Buzzwords to Reality: Impact Sourcing and AI for Social and Business Advancement | Blog

May 14, 2024

Discover the transformative power of impact sourcing firsthand through Everest Group’s sustainability teams’ eye-opening visit to a NextWealth center in rural India.

Stepping out of our vehicle after a six–hour trip from our office in Bengaluru, Karnataka, to visit Mahendra NextWealth’s center in Mallasamudram (near Salem) in Tamil Nadu, little did we know how profoundly our convictions about impact sourcing would deepen. Terms such as automation, AI, inclusion, and sustainability are typically discussed as separate buzzwords in organizations; impact sourcing commendably brings them together. The Everest Group team quickly saw NextWealth’s operationalization of the impact sourcing model seamlessly combines the two worlds. Let’s share more about what we saw during our visit in this blog.

Seeing impact sourcing in action

NextWealth was founded in 2008 to employ graduates in less populated small Indian towns with colleges but limited job opportunities. The founders are Wipro veterans who have made a conscious decision to create opportunities that do not require migration to cities, maintaining social cohesion. Yet the service offerings do not differ from traditional providers, including AI/Machine Learning (AI/ML), Information Technology (IT) services, and Business Process Services (BPS) under a managed services model. Their diverse set of clients include tech, e-commerce, fintech, banking, financial services and insurance (BFSI), and healthcare.

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The Everest Group team with the NextWealth team in Mallasamudram, Tamil Nadu, India.

Leveraging impact sourcing to drive business growth: a three-pillar approach

Everest Group has written extensively about the variety of ways businesses can integrate impact sourcing with their operational strategies. NextWealth specifically achieves this by using a three–pillar approach focused on:

  1. Strategic talent location: Hiring the right talent by establishing centers in areas with an ample workforce yet limited career opportunities in those locations
  1. Promising markets: Targeting high-growth services such as data annotation and AI solutions that allow the company to scale operations
  1. Systematic skills development: Creating step-by-step-based training modules for the delivery of services, resulting in increased efficiency and quality, as well as transferable talent

 

Impact sourcing through strategic location selection 

The primary qualifications for impact sourcing are employing typically excluded individuals in a deliberate manner. NextWealth intentionally hires graduates, particularly women, with limited access to quality jobs from India’s smaller cities, creating positive social impact and business gains. The centers are established in towns with colleges, thereby guaranteeing a stream of graduates. These locations also have a reliable internet connection (physical and digital infrastructure), a stable operating and business environment, and cultural ties to the community, including Chittoor, Hubli, Bhilai, Vellore, Puducherry, and Udaipur.  

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NextWealth’s team briefs the Everest Group analysts on how they use data annotation to automate security scans for luggage at airports and railway stations.

Delivery of high-growth services through sustained employment and skilling

Much of the societal discussion about generative AI (gen AI) is the elimination of jobs because of efficiency and automated tasks. Instead, we saw how embracing gen AI can also enable job creation. The NextWealth delivery we witnessed included AI/ML training data solutions, customer experience (CX) design, and auditing these solutions. We saw self-checkout store error analyses, product fraud detection design, and product placement with marketing tools. These services are delivered after rigorous training on the solutions and feedback loops to improve quality/efficiency.

The ultimate objective of impact sourcing is social impact 

Here are some of the social impact outcomes that particularly impressed the analysts and left a lasting mark:  

  • The recruitment focus on women has begun to reshape the perception of their role in society. Their marriage age in surrounding communities has increased by 2.5 years 
  • Hybrid work options have enabled many who might otherwise be unable to pursue careers 
  • The low attrition rate of about 12% is an indicator of a positive workplace culture and employee experience. It has also afforded the opportunity to promote within 

As we set out on our journey back from Mallasarudram to Bengaluru, the fatigue of the trip was overshadowed by the wonder of what we had just experienced. While we are aware of the constant Darwinian evolution of the global services industry, it was truly incredible to witness in practice a firm leveraging impact sourcing to create broader societal impact through a sustainable and prosperous business model. 

Read more about Everest Group’s impact sourcing research and our latest report, Impact Sourcing for Sustainable Development and a Brighter Future: Impact Sourcing State of the Market 2023. Contact the analysts who visited NextWealth: Rita N. Soni, Aiswarya Barjatya, Kanishka Chakraborty, and Mohammed Riyaz.

Navigating the Summit: Tech’s Role in Achieving the World Economic Forum’s 2024 Vision | Blog

January 16, 2024

Technology stands at the forefront in realizing Davos 2024’s vision of “Rebuilding Trust.” By providing innovative strategies and solutions, the technology sector can help address cybersecurity, job creation, artificial intelligence, and climate challenges. For a preview of the critical topics that world leaders will address at the annual event, read on.

As we stand on the precipice of a new year, the global community is gearing up for the World Economic Forum’s annual meeting in Davos. This pivotal event from Jan. 15-19 brings together leaders from across industries to collectively address the world’s most pressing challenges.

In 2024, the spotlight is on “Rebuilding Trust,” with a focus on restoring collective agency and reinforcing fundamental principles of transparency, consistency, and accountability among leaders. Let’s take a glimpse into the themes that will shape the conversations at Davos. Also, see this LinkedIn Live, Pressing Global Issues and Solutions in Tech: Reflections on WEF Davos ’24, for key takeaways from the WEF annual meeting and major trends in the climate and sustainability tech and services industry that are changing the marketplace in 2024.

The 2024 theme: Rebuilding trust

The overarching theme for Davos 2024 underscores the critical need to rebuild trust in a world marked by fractures and uncertainties. The summit aims to catalyze actionable solutions that transcend borders and industries, placing businesses at the forefront of global collaboration.

Against this backdrop, the role of the technology and technology services sectors takes center stage, offering innovative strategies and solutions to address the following four subtopics outlined for this year’s summit:

  1. Achieving security and cooperation in a fractured world

In an era of geopolitical complexities, achieving security and cooperation is paramount. The technology sector, with its expertise in cybersecurity and collaborative technologies, has a unique role to play. Beyond safeguarding digital assets, tech can foster global cooperation through secure communication platforms and advanced analytics for early threat detection.

  1. Creating growth and jobs for a new era

For the technology services sector, the second subtopic hits close to home. The emphasis on creating growth and jobs in a new era aligns with impact sourcing, an inclusive talent strategy that empowers marginalized communities by providing them with meaningful employment opportunities. As we navigate an ever-evolving workforce landscape, technology can be a driving force in fostering inclusive economic growth.

  1. Artificial intelligence as a driving force for the economy and society

Artificial Intelligence (AI) has already transformed the technology and technology services sectors, and its impact is only poised to expand further. From personalizing training programs to enhancing productivity and offering expanded service offerings, AI is a linchpin in shaping the future of work. Davos provides an unparalleled platform to discuss responsible AI practices that prioritize ethical considerations and human-centric approaches.

  1. A long-term strategy for climate, nature, and energy

The urgency of addressing climate change has never been more evident. The technology sector is pivotal in developing sustainable solutions and innovative approaches to mitigate climate change’s impact. From energy-efficient technologies to data-driven insights for environmental conservation, tech leaders at Davos can forge a path toward a greener, more sustainable future.

As Everest Group anticipates the discussions at Davos, we recognize the transformative role that the technology and technology services sectors can play. By aligning with the summit’s themes and subtopics, the tech industry has the potential to contribute significantly to rebuilding trust and shaping a more inclusive, sustainable, and prosperous global future. for a LinkedIn Live conversation on Feb. 7 with analysts Arpita Dwivedi and Rita N. Soni, and tech expert Marisa Zalabak as we navigate the summit and bring you insights into the pivotal role of technology in achieving Davos 2024’s vision.

A Bright Start at COP28: Progress and Pledges for a Sustainable Future with Technology as a Key Enabler | Blog

December 11, 2023

Our Everest Group team is pleased to share their analysis of positive developments from the first two days of COP28, with a specific focus on the global technology and tech services industries, in this blog. With positive momentum building, the outlook in the collective journey toward a more sustainable future is looking brighter.

Day 1: A historic leap forward

Creation of the loss and damage fund for the global south

The first day of COP28 was nothing short of historic. The formal creation of the Loss and Damage Fund for the Global South was a key highlight. This initiative marks a crucial step in addressing the disproportionate impact of climate change on vulnerable nations. The commitment of US$400 million in pledges is a testament to the global community’s dedication to creating a more equitable and resilient world.

Contributions from multiple nations to support climate adaptation in vulnerable regions

Notable contributors to the fund include the COP28 hosts, the UAE, with a generous pledge of US$100 million. Germany and the US also stepped up, pledging US$100 million and US$17 million, respectively. The UK, demonstrating its commitment to climate action, pledged £60 million. These pledges will undoubtedly play a pivotal role in supporting climate adaptation and mitigation efforts in the most vulnerable regions.

What does this mean for the sustainability enablement services market?

The funding can act as a political push for these nations to adopt technology to enable sustainable businesses and mitigate climate risks. Currently, Everest Group has observed a surge in sustainability technology adoption in developing countries. Environmental, Social, and Governance (ESG) data reporting, Artificial Intelligence (AI)-driven crop management, and Internet of Things (IoT)-led water management solutions are gaining traction. Evolving reporting standards and the imperative for climate-resilient business practices will drive the scalability of sustainability-enabling technologies in these regions.

Day 2: The United States takes center stage by addressing methane management as a crucial step for reaching net zero emissions

Environmental Protection Agency (EPA) announces regulations on methane leaks

The second day of COP28 brought a wave of positive news, particularly from the United States. Michael S. Regan, Administrator of the EPA, announced groundbreaking regulations aimed at addressing leaks of greenhouse gases (GHGs) like methane. Methane, the second most abundant greenhouse gas, contributes significantly to global warming.

Methane management requires predictive technologies and strict reporting frameworks

Efficient methane management requires precise methane measurement and prioritizing reporting. While the EPA has taken an important step towards regulating methane leaks, methane-emitting industries (like oil and gas) need to move towards a ‘predict and prevent’ model of methane management. These industries should leverage AI and IoT-based methane management platforms that track and measure methane emissions and prevent methane leaks using predictive analytics.

Duke Energy, for example, has collaborated with Accenture and Microsoft to build a first-of-its-kind, end-to-end Azure-based cloud platform that monitors baseline methane emissions from natural gas distribution assets (e.g., pipelines, gas meters), using satellite monitoring, analytics, and AI.

Industry coalitions underpin methane management, as players recognize the value of collaboration in reaching net zero emissions

The Global Decarbonization Accelerator, a coalition of 50 oil and gas companies representing over 40% of global production, made a resounding commitment to reduce methane emissions by 80-90% by 2030. This ambitious pledge demonstrates a growing industry recognition of the urgent need to transition towards cleaner and more sustainable practices.

In addition to industry commitments and public sector regulation, philanthropic efforts also took the spotlight. Bloomberg Philanthropies unveiled a $40 million program focused on transparency and accountability in methane reduction initiatives. This program is a crucial step towards ensuring that efforts to curb methane emissions are not only ambitious but also measurable and accountable. We see the potential for scaled partnerships with the private sector. A model of shared responsibility and accountability, with collaboration as a central vision, is necessary for methane mitigation.

What does this mean for the sustainability enablement services market?

The players in the sustainability enablement services landscape can expect higher demand for net zero services, along with solutions like emission management platforms and tools. Technology players and service providers should focus on forming collaborations with their client groups to advance research and pilot more solutions in this space.

Moving forward with optimism

As we reflect on the first two days of COP28, it is clear that we are witnessing a historic turning point in the global fight against climate change. The establishment of the Loss and Damage Fund, coupled with significant pledges, coalitions, and regulatory advancements, sends a powerful message that the world is ready to take bold action.

Everest Group constituents in the global technology and technology services industries have an important role to play in these efforts. We remain committed to helping providers navigate the sustainability enablement opportunity to help guide their clients toward a more resilient and environmentally conscious future.

As we continue our journey through COP28, let’s remain optimistic and committed to the shared goal of a sustainable and resilient future. Together, we can turn these pledges into impactful actions that will benefit not only our current generation but also those to come. Reach out to Rita Soni, [email protected], Arpita Dwivedi, [email protected], Meenakshi Narayanan, [email protected], or Ambika Kini, [email protected] for further discussion.

To learn more about key takeaways from the COP28 conference, watch our LinkedIn Live session, Building a Sustainable Future: Reflections on COP28 and Insights for 2024.

Promoting Advanced Technologies at COP28 Can Propel Immediate Energy Optimization Action | Blog

December 7, 2023

As nations gather at COP28, prioritizing technology-driven optimization can pave the way for sustainable energy progression. Explore how advanced energy monitoring and optimization technologies can help enterprises transition from fossil fuels to renewables.

Note, this blog is part of Everest Group’s continued coverage of COP28. For our analysis of the first two days of the United Nations Climate Change conference, see our prior posting.

COP28 marks a crucial moment for discussions on moving from fossil fuels to renewables. This year’s meeting is especially important as nations reveal their plans for tackling climate change. The urgency is clear, highlighted by the Global Stocktake revealing the world is falling short of the Paris Agreement goals. COP28 is a key moment for the energy sector, offering an opportunity for governments to make bold commitments and speed up the transition.

In this context, enterprises worldwide are increasingly recognizing the imperative to transition towards renewable energy sources, driven by both environmental concerns and a growing commitment to sustainable practices. The appeal of renewables, such as solar and wind power, lies in their potential to mitigate climate change and reduce dependence on finite fossil fuels. However, despite this burgeoning enthusiasm, enterprises encounter a myriad of constraints in their quest for increased renewable energy adoption. Let’s explore this further.

Enterprises face these major obstacles in realizing their ambitious energy transition agenda:

  • High initial investment costs: The transition to renewable energy often involves significant upfront capital expenditures for the installation of solar panels, wind turbines, or other clean energy infrastructure. Many enterprises, particularly smaller businesses, find it challenging to justify these initial costs despite the long-term benefits
  • Intermittency and reliability concerns: Some renewable energy sources, such as solar and wind, are intermittent and dependent on weather conditions. This unpredictability can lead to concerns about the reliability of energy supply, especially for businesses that require a continuous and stable power source
  • Regulatory hurdles and policy uncertainty: Enterprises operating in different regions face varying regulatory frameworks and policies related to renewable energy. Inconsistent or unclear regulations can create uncertainty and hinder long-term planning for energy transition strategies
  • Limited availability of suitable infrastructure: The implementation of renewable energy projects often requires ample space and specific geographical conditions. Finding suitable land or locations for solar farms, wind turbines, or other renewable facilities can be a logistical challenge, particularly in densely populated areas where land is scarce or expensive

Amidst these challenges, the shift from fossil fuels to renewables finds a bridge in the optimization and monitoring of existing energy usage through advanced technologies. Leading enterprises have started joining forces with tech players and service providers to track and enhance energy efficiency in operations, paving the way for a sustainable energy transition.

Despite a booming market in sustainability enablement services offering advanced energy-efficient solutions, enterprises hesitate due to cost concerns. Yet, key players are actively investing in cutting-edge technologies to drive energy efficiency for their clients.

Three standout solutions have emerged at the forefront of major players’ sustainability services portfolios:

  • Artificial Intelligence (AI) and Internet of Things (IoT)-based energy monitoring: Revolutionizing energy optimization, IoT and AI-based systems offer real-time insights into consumption patterns. Smart sensors and meters seamlessly integrate into a connected network, continuously collecting detailed data. AI algorithms analyze this information, unveiling inefficiencies, anomalies, and optimization opportunities. The power of predictive analytics forecasts future energy demands, enabling proactive measures to mitigate inefficiencies and cut overall consumption. Infosys Energy Management Solution and TCS Clever Energy are examples of energy monitoring and tracking systems
  • AI-driven predictive maintenance: With artificial intelligence, predictive maintenance transforms energy optimization by foreseeing and addressing equipment issues before performance impact. Historical and real-time data analysis allows AI algorithms to predict faults, facilitating timely interventions that prevent unexpected downtime and associated energy inefficiencies. This data-driven, proactive approach reshapes traditional maintenance paradigms, significantly contributing to enhanced energy efficiency and operational excellence. Capgemini’s predictive asset maintenance services and Accenture’s intelligent asset management services are examples of AI-driven predictive maintenance solutions for enterprises
  • Occupancy and building management with AI: AI-driven systems for occupancy and building management contribute to energy efficiency by intelligently regulating lighting, heating, and cooling based on real-time occupancy data. Smart sensors and AI algorithms learn patterns of occupancy, preferences, and environmental conditions to optimize energy usage in commercial buildings. Infosys’ Smart Spaces offering focuses on energy efficiency for commercial buildings, data centers, and workspaces. Hitachi’s Intelligent Building Management System also focuses on making buildings more energy efficient

Service providers have started crafting umbrella brands for sustainability services, with energy monitoring taking center stage in their portfolios. While energy monitoring and reporting systems are branded as niche sustainability solutions, the environmental impact of solutions like predictive maintenance and smart building management systems are significant. As enterprises intensify net-zero commitments, we foresee a surge in demand for these solutions, with a special focus on sustainability. We are optimistic about the market, with a tinge of prudence.

While sophisticated energy monitoring and optimization solutions are plentiful, enterprises hesitate to invest in sustainability technologies due to perceived high costs and short-term return concerns. However, service providers are strategically bundling sustainability benefits with operational optimization engagements, along with providing niche energy-related solutions to enterprises.

Everest Group anticipates a surge in the energy-efficiency solutions market within the next two to three years. The forthcoming focus on energy efficiency at COP28 could serve as the catalyst needed to propel this market into flourishing growth.

To discuss further, reach out to Rita Soni, [email protected], Arpita Dwivedi, [email protected], Meenakshi Narayanan, [email protected], or Ambika Kini, [email protected].

To learn more about the progress made in 2023 to build a more sustainable future and key takeaways from the COP28 conference, watch our LinkedIn Live session, Building a Sustainable Future: Reflections on COP28 and Insights for 2024.

A Comprehensive Approach to Meeting the Talent Demands of Sustainability Services | Blog

December 5, 2023

As the sustainability sector rapidly expands, the demand for skilled professionals is soaring. Read on to learn about the skill requirements needed in the sustainability service market and how to bridge the talent gap.

In recent years, the world has witnessed a remarkable surge in awareness regarding environmental responsibility and sustainability. This shift in mindset has fueled the growth of the sustainability services market as organizations increasingly recognize the need to adopt eco-friendly practices.

Yet, as the sustainability sector continues to evolve, service providers confront a formidable challenge in the form of a critical shortage of skilled talent. In this blog, we will delve into the pressing talent-related issues faced by sustainability service providers and explore the innovative ways they are addressing these deficiencies through avenues like strategic hiring, acqui-hiring, and upskilling.

The diverse skill set required

The field of sustainability services presents a multifaceted landscape of skills and expertise that are in high demand. For instance, service providers in this sector require professionals who can proficiently handle advanced data analytics to assess environmental impacts. A comprehensive understanding of sustainability reporting frameworks is also imperative, as is the ability to conduct climate scenario analysis and risk assessment.

In essence, the diversity of skill sets required encompasses environmental science, economics, engineering, and a commitment to sustainability that transcends traditional disciplinary boundaries.

Challenges in finding talent

As service providers look to recruit skilled sustainability experts, they are finding themselves up against significant roadblocks, including:

  • A limited pool of professionals: Sustainability services is a relatively new field, and professionals with the required experience and expertise are scarce
  • An evolving landscape: The sustainability sector is continuously evolving, with new technologies and frameworks emerging regularly. This makes it challenging to find candidates who can keep up with the rapidly changing landscape
  • Cross-disciplinary requirements: The interdisciplinary nature of sustainability work makes it difficult to find candidates with expertise in all the required areas

Addressing the talent gap

Bridging the talent gap for sustainability services requires a multifaceted approach that encompasses strategic recruitment and upskilling.

  1. Strategic hiring

Sustainability service providers are looking for candidates who may not have a perfect match of skills but possess a strong foundation and are open to learning and adapting. Most of the sustainability professionals being hired hold a master’s degree, with almost 78% coming from a STEM background.

Everest Group’s GREEN framework provides a comprehensive approach to talent development in sustainability services, addressing geographic considerations, regulatory expertise, educational diversity, practical experience, and technological innovation to meet the increasing demand in this field.

Everest Group’s GREEN framework

Service providers like Accenture, which have an aggressive inorganic growth philosophy, focus more on acqui-hiring, the practice of acquiring smaller companies primarily to gain access to their talent. It allows providers to quickly expand their workforce and access niche expertise.

However, prioritizing upskilling as a long-term strategy emerges as a more effective approach for tackling the talent gap.

  1. Upskilling the workforce

Service providers have a multitude of options to support their employees in their upskilling endeavors. These include motivating employees to pursue external certifications, offering internally designed courses, and tying up with learning and development providers.

    • Industry-accredited certifications – Sustainability certifications are a testament to a thorough grasp of pertinent industry benchmarks, elevating professionals’ standing within their respective domains. The selection of a certification largely depends on the particular domain of sustainability and the career aspirations of the individual. These certifications could be general sustainability and climate professional certifications, sustainability reporting courses, energy-related certifications, green building certifications, etc.
    • Internal courses – Service providers often develop an internal catalog of courses to educate their workforce on sustainability and related aspects. These courses can be aimed at executive leadership, normal workforce, or both. Deloitte offers a curriculum of sustainability training courses available to all its employees virtually and through the network of Deloitte Universities
    • Collaboration with educational institutions – By working closely with universities and colleges, they can shape curricula to align with industry requirements, ensuring that graduates are better prepared for the workforce. These partnerships also offer internships and co-op programs that provide students with hands-on experience and job opportunities upon graduation. Capgemini Invent, for example, has leveraged the ESSEC Business School for various courses, including one on the foundations of sustainable transformation

After creating the talent pool required, building the ideal organizational structure becomes imperative for maximizing the potential of the sustainability enablement services talent. The organization can streamline business initiatives by aligning roles, responsibilities, and workflows, enabling seamless collaboration among experts from diverse backgrounds.

To explore the above strategies in detail, check out our viewpoint: A Provider’s Playbook to Bridging the Sustainability Skills Gap. This report sheds light on the sourcing, skilling, and organizational structuring strategies tailored to the unique needs of service providers in the sustainability space. To discuss further or for inquiries, please reach out to Rita Soni, Principal Analyst, Sustainability Research and Impact Sourcing, [email protected], Arpita Dwivedi, Practice Director, Sustainability and Talent, [email protected], or Ambika Kini, Senior Analyst, Sustainability Technology and Services, [email protected].

To hear our takeaways from Cop28 watch our LinkedIn Live session, Building a Sustainable Future: Reflections on COP28 and Insights for 2024.

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