ESG And Sustainability Archives - Page 2 Of 4

The Power of Purpose: How Impact Sourcing Specialists are Transforming Lives | Blog

May 1, 2023

Seeing impact sourcing in action at Vindhya e-Infomedia validated to Everest Group that this growing business practice is more than a feel-good story but a win-win for individuals, companies, and communities. Hearing about the positive benefits firsthand from people with disabilities employed at the Bengaluru center left a lasting impression on the analysts who share their perspectives in this blog.

The Everest Group team was excited to see impact sourcing in practice, some for the first time, at Vindhya e-Infomedia, but they also had questions about whether impact sourcing would live up to its promise.

The visit to the Bengaluru center exceeded their expectations and reinforced that impact sourcing is a business imperative in today’s ESG-focused times. Highlights of the trip were meeting Vindhya e-Infomedia Founder and Managing Director Pavithra Y. Sundareshan and hearing from its employees.

Rita Soni with Pavithra Sundareshan, Founder and Managing Director, Vindhya e-Infomedia

Impact sourcing specialist Vindhya e-Infomedia was founded in 2006 with a vision of uniting business with impact. It has centers in Bengaluru, Hyderabad, Nagpur, Mysore, and Krishnagiri (Tamil Nadu) and plans to expand across India and abroad.

Employing people with disabilities as its main workforce, the company provides data entry, claims processing, customer onboarding, payroll, and data management processes to such clients as Airtel, IBM, and SAP AG. With its team of more than 2,400 employees based in cities, Vindhya defies the stereotype that only small companies in India operate Business Process Outsourcing (BPO) centers in rural areas.

Impact sourcing specialists like Vindhya e-Infomedia intentionally hire people from marginalized communities and train them to deliver IT and BPO services. These providers offer economic opportunities to individuals who face difficulties in finding employment, such as people with disabilities, those from marginalized communities or without formal educational degrees, and single parents.

Hiring people from these target groups often requires organizations to enhance their physical and digital infrastructures and/or modify policies to create a conducive work environment. However, the idea is not to create separate work areas for impact hires but rather to bring inclusivity to everything at the workplace – a belief that runs at the very core of Vindhya’s operating system.

Inspiring employee stories

Impact sourcing has the power to change the trajectories of individuals’ lives, as the team learned from hearing about the backgrounds, job profiles, and aspirations of employees at the Bengaluru center. Their resilience, persistence, and tremendous willpower to achieve was uplifting to the analysts who focus their work on impact sourcing.

The team was truly inspired! Here are the stories of four individuals who demonstrated the ways impact sourcing is benefitting individuals, families, and communities:

Vidya Patil

Vidya Patil has been associated with Vindhya for eight years and currently handles banking payment collections and customer communications. Speaking in her native Marathi, she shared: “विंध्या सोबतचा ८ वर्षांचा हा प्रवास माझ्यासाठी अविश्वसनीय होता. अपंग व्यक्ती असुनही, विंध्या येथे नोकरी मिळाल्याने मला आर्थिक स्वातंत्र्य आणि स्वावलंबन मिळाले. या नोकरीमुळे, कुटुंबाबर अवलंबून असणार्या मला, कुटुंबाचा पोशिंदा बनवले. तसेच मला माझ्या भाचीच्या उच्च शिक्षणासाठी समर्थन करण्यासही सक्षम केले. विंध्याहे केवळ कामाचे ठिकाण नसुन; ते माझ्यासाठी दुसरे कुटुंब आहे. माझ्या भावाच्या आरोग्य आणीबाणीच्या काळात‌ त्यांनी दिलेल्या आर्थिक आणि भावनिक आधारासाठी, मी विंध्याची कायम ऋणी राहील”

“The job at Vindhya gave me financial freedom and self-reliance. It has transitioned me from being a dependent to a caretaker and a breadwinner for my family. With this job, I could support my family as well as support my niece’s higher education. Vindhya provided immense financial and emotional support to me during my brother’s medical emergency. Vindhya is not just a workplace but a family itself, and I will always be utterly grateful to Vindhya.”

Aman Birari in conversation with Vidya Patil

Digbijoy Adak

Digbijoy Adak spoke in Bengali about his experiences overcoming barriers to gain self-sufficiency: “আমি দশম ক্লাস অবধি পড়াশোনা করেছি | আমি কম্পিউটার ব্যবহার করতে জানি | যেহেতু আমার পড়াশোনা বেশি নয়, আমি কোনো ভালো সম্মানযোগ্য কাজ পাইনি | জীবন যাপনের জন্য আমি একটা ছোট অর্কেস্ট্রা দলের সঙ্গে কাজ করতাম | এই সময় আমি ভিন্ধিয়া কম্পানি সম্পর্কে জানতে পারি | আমার এক বন্ধু সেখানে কাজ করছিলো আর আমাকে এই ব্যাপারে জানিয়েছিল | আমি এখন খুবই খুশি | আমি ভিন্ধিয়া-তে কাজ করতে পেরে একজন স্বাবলম্বী এবং স্বনির্ভর মানুষ হিসেবে পরিচিতি পেয়েছি |”

“I had completed my 10^th grade education and knew how to use computers. However, since I was not highly educated, I was not able to find a good respectable job. I used to work with a small orchestra group for my livelihood. During that time, I came to know about Vindhya. A friend of mine was working here and informed me about it. I am very happy now. I have found a job in Vindhya and have become a self-sufficient and independent person.”

What he did not say directly but implied, is that his disability has been an unjust cause of discrimination in the past. At Vindhya, one’s disability status is not a barrier to a good job.

N Yashoda

Having a hearing impairment does not prevent N Yashoda from excelling at converting documents from paper to digital. With her lip-reading skills and the aid of an experienced sign language translator/guide, Yashoda has fully integrated into Vindhya’s operations.

Madhabi Sardar

Madhabi Sardar has a master’s degree, but a visual impairment prevented her from gaining a decent, well-paid job – until Vindhya. She now heads the braille team and aims to become a singing maestro in the future, showing it’s never too late to dream big.

The real significance of this business practice can be seen in the countless lives touched by the dignity of a good job, as these inspiring and heart-warming stories show.

Impact sourcing obstacles

Like any journey, even this one has obstacles. Impact sourcing often requires an extensive process to access the right talent. Additionally, investments in skilling and upskilling resources pose a challenge in managing high training costs.

The lack of benchmarks to measure key performance indicators (KPIs) or evaluate success makes it difficult to prepare appropriate success stories and business cases for impact sourcing. However, impact sourcing specialists are implementing robust practices to mitigate these challenges, and meaningful collaboration among all involved stakeholders is needed.

The visit was an eye-opening, humbling experience for the team who saw that the benefits of impact sourcing go beyond providing a paycheck but also give individuals a sense of community and belonging.

Aman Birari, Rita Soni and Anik Dutta showing the hand sign for love with Vindhya’s Pavithra Sundareshan (second from the left).

Pavitra’s parting words that impact sourcing is about ‘shared prosperity’ resounded with the analysts. Building partnerships to create an impact that benefits all involved stakeholders is needed to move the practice forward.

Everest Group commitment

The visit reinforced Everest Group’s commitment to advancing impact sourcing globally. As a signatory of the Clinton Global Initiative’s “Commitment to Action,” the firm has pledged to bring in half a million impact sourcing full-time equivalents (FTEs) into the ecosystem by the end of 2025 and has committed its research and expertise to help enterprises frame their impact sourcing strategies.

For more insights on measuring and using data for better business outcomes, register for the virtual roundtable, Measuring the Impact of Impact Sourcing. To discuss impact sourcing, reach out to [email protected], [email protected], or [email protected].

Inspiring Development Dialogue Event Demonstrates the Transformative Force of Impact Sourcing | Blog

March 23, 2023

Impact sourcing can transform individual lives, create diverse and inclusive workforces for employers, and deliver economic benefits to entire communities. Hearing first-hand about the power of impact sourcing at the Development Dialogue gathering in India was inspiring for our sustainability analyst, who explores what is impact sourcing in this blog.

An idea does not have an impact unless it is directed at some burning problem in the world.” – Gururaj Deshpande, co-founder of the Deshpande Foundation

This intriguing and thought-provoking statement set the stage for the recent Development Dialogue international gathering in Hubli, an ideal setting to better understand sustainable development issues at a grassroots level and to behold rural transformation at its best.

Our Everest team was uplifted to attend this two-day event led by stalwarts like Infosys Founder Narayana Murthy, iMerit Founder and CEO Radha Basu, and DeHaat Founder and CEO Shashank Kumar among many technology, finance, education, and agriculture experts.

Capturing our interest the most from the event was seeing the entire impact sourcing ecosystem and the important role all stakeholders play – starting with non-governmental organizations (NGOs) that provide valuable skills training to the employers that implement impactful innovation and sourcing in principle and practice.

Why is impact sourcing so critical today?

In a world where technology is driving growth and global competition at an unprecedented pace, people in certain rural pockets of the world are left behind. Many individuals simply want to enter the workforce, earn a decent living, and enjoy a dignified life.

While many governments have implemented policies and programs to help marginalized communities, war-torn countries, and radicalized groups that prohibit females from receiving an education or gaining financial independence still sadly exist.

At this critical juncture, people in these communities desperately need direction, skills, and the confidence to transform their lives. The impact sourcing ecosystem plays a critical role in helping these individuals. Let’s explore this growing business practice further.

What is impact sourcing?

Impact sourcing is a business practice where companies intentionally hire and provide career development opportunities to individuals who may have limited access to formal education, resources, and opportunities.

This powerful concept has the potential to change the trajectories of people from marginalized communities. Here are some real-life examples that we heard at Development Dialogue of how impact sourcing is making a difference that left a lasting impression and demonstrated the power of resilience, courage, and determination:

Vaishnavi, a bright 8th-grade student at a state government high school, is the first girl in her entire family to pursue secondary education. Her impeccable English and story about finding the confidence to talk to her doctor in English about health issues captivated and inspired the audience
Innus Khan was expected to take over his modest family business in While he yearned for independence, his rural upbringing deprived him of essential job skills. He joined Deshpande Foundation to learn English and digital skills and is now Senior Director of Agriculture Initiatives
Rukmini, the first female auto driver in a small village in Uttar Pradesh, is a single mother who received a car loan from Rang De, a social investment institution. Rukmini’s reputation as a responsible driver, particularly for school children, has made her the village’s most sought-after driver. Her journey is a testament to perseverance and strength

Impact sourcing benefits Top of Form

By providing opportunities for individuals who may have limited access to formal education or resources, impact sourcing enables job seekers to gain valuable skills and work experience. Not only does impact sourcing transform individual lives, but it also has a multiplier economic impact on families and entire communities.

At the same time, impact sourcing can help companies create diverse and inclusive workforces and provide a cost-effective solution to the current talent crisis. By tapping into this attractive talent pool, businesses can access a new source of skilled labor, often at lower costs than traditional hiring methods.

This can help businesses reduce operational costs while maintaining high-quality standards and increasing retention rates by hiring dedicated workers that studies show stay with the companies longer.

Impact sourcing commitment

Everest Group believes that by working together, we can help create a more inclusive and sustainable global economy. As a signatory of the Clinton Global Initiative’s “Commitment to Action,” Everest Group has pledged to increase the impact sourcing workforce by connecting hundreds of thousands of marginalized individuals to new jobs.

The company has set a goal to grow the impact sourcing market from its current level of 350,000 Full-Time Equivalent (FTE) employees to half a million in three years. To achieve this goal, Everest Group is providing research and enablement tools, sharing best practices, and collaborating with enterprises, service providers, governments, and NGOs.

Everest Group is developing a playbook to help organizations incorporate impact sourcing into hiring practices. Please continue to follow this space for the latest developments and contact Susmitha Devisetty or Anik Dutta with any questions.

For more insights from our team from Development Dialogue 2023, please see Driving Social Transformation: The Power of Impact Sourcing on India’s Rural Economy.

Learn more about how to grow sustainability within your organization in our webinar, Sustainability in the New Year: Follow Through on Resolutions for People and the Planet.

Driving Social Transformation: The Power of Impact Sourcing on India’s Rural Economy | Blog

March 17, 2023

By working together, employers, training institutions, the government, and other stakeholders can create a sustainable and inclusive impact sourcing movement in India that empowers the rural population and drives overall social transformation. Read on to learn about the benefits of impact sourcing and the role each group can play to advance this powerful business practice.

My eyes were fully opened to the transformative impact social organizations can have on rural populations as a first-time attendee to Development Dialogue 2023, an international gathering of diverse sectors with the common purpose of creating sustainable solutions, organized by the Deshpande Foundation in Hubli, Karnataka, India.

While I had done some basic research on the foundation’s operations, I never expected to be surprised by the social impact on the local rural economic development from their work that includes farmer support, start-up and micro-entrepreneur programs, and a youth skilling initiative.

Hearing a 14-year-old girl from a small village near Hubli conversing in fluent English with tremendous confidence with dignitaries such as Infosys Founder N.R. Narayana Murthy and Founder and CEO of iMerit Radha Basu amazed me.

This was the moment I realized the real empowerment and impact that NGOs and organizations such as Deshpande Foundation have on the rural population. These enabling institutions educate and train the rural youth population with job-ready communications and technical skills to improve their employment prospects and advance impact sourcing in India.

What is impact sourcing?

Impact sourcing involves intentionally hiring and providing career development opportunities to people from marginalized communities. This business practice aims to meet objectives such as maintaining service quality and cost at parity with traditional Business Process Outsourcing (BPO) and Information Technology Service (ITS) providers, fulfilling Corporate Social Responsibility (CSR), Environmental Social Governance (ESG), and diversity objectives of both the business and their clients, and leveraging the unique assets of the target marginalized group.

Impact sourcing creates opportunities for such groups as economically-disadvantaged individuals, women, minorities, LGBTQ+ individuals, survivors of gender-based violence, persons with disabilities, veterans, military spouses, refugees, rural residents, and single parents.

Impact sourcing in India

As one of the fastest-growing economies in the world, India has rapidly expanded its metro cities and developing urban regions in recent years. Almost all higher education facilities and formal sector employment opportunities are concentrated in the metros or tier-I cities.

Meanwhile, more than 64% of the population resides in rural areas with limited growth options. BPO companies in metro and tier-I cities face a severe talent crunch due to high contact center agent attrition rates. Shifting urban BPO centers to rural areas not only reduces operational expenses but also provides job opportunities to the rural population.

To drive major social impact through inclusive hiring models, India needs to create a policy and institutional environment to improve employment opportunities for the rural population that includes the value chain’s three main stakeholders: government support, NGOs/training institutes, and employer organizations.

Currently, India needs more private organizations, NGOs, and training institutes focusing on sustainable rural economic and social development. Increased impact sourcing initiatives are critical to improve job opportunities and drive overall social transformation. Let’s look at the role each of these groups can play:

Role of skilling institutions

Some of the prominent NGOs and training institutes working towards these goals include:

Deshpande Foundation, through Deshpande Skilling, focuses on skill development and training elementary and middle-school students as well as graduates from tier II and III towns and villages
Anudip Foundation, an NGO in partnership with the National Skill Development Corporation (NSDC), concentrates on providing technical training to Indian youth from underprivileged communities
Youth4Jobs focuses on the education and employment of persons with disabilities. Many similar NGOs focus on making unemployed youth job-ready by skilling them with technical education and developing soft skills

Support from government

To promote impact sourcing among disadvantaged rural communities, the government has launched numerous initiatives for skill development, including Pradhan Mantri Kaushal Vikas Yojana (PMKVY), the Employability Enhancement Training Programme (EETP), and the National Employability Enhancement Mission (NEEM).

NASSCOM Foundation frequently uses the mantra of “technology for good” and “changing India bit by bit” to encourage private organizations to actively participate in creating a sustainable impact sourcing movement.

Need for private sector participation

While some organizations such as B2R, Genpact, HGS, iMerit, IndiVillage, Infosys, Rural Shores, and Vindhya have taken steps towards impact sourcing and rural BPO, India needs active participation from all major private organizations.

Impact sourcing offers a compelling business case that goes beyond “doing good.” Studies have shown that impact-sourcing workers are more tenacious, dedicated, and hardworking, with very low attrition rates.

Shifting to rural areas not only reduces infrastructure and operational expenses but also lowers recruitment and training costs, resulting in overall cost savings for organizations. Enterprises also gain community support and social recognition by practicing impact sourcing while contributing to social transformation.

Everest Group, in partnership with the Clinton Global Initiative (CGI), has pledged to increase the impact sourcing workforce across the globe. Through our Commitment to Action proposal, the firm provides a platform for impact sourcing stakeholders to connect and access our research on the global impact sourcing market.

To learn more about Deshpande Foundations’ Development Dialogue event, read this blog, Inspiring Development Dialogue Event Demonstrates the Transformative Force of Impact Sourcing.

If you have questions or want to join other organizations that have already taken this pledge, contact Aman Birari.

Learn more about impact sourcing trends and drivers leading to impact sourcing demand in our LinkedIn Live session, What Are the Benefits and Barriers of Impact Sourcing in CXM?

Can Joint Innovation and Public-private Partnerships Prove to be the Noah’s Ark for Africa? | Blog

December 6, 2022

Almost 200 countries came together at the Climate Change Conference (COP 27) in Egypt last month to take action toward achieving the world’s collective climate goals. Among the event highlights was the establishment of a fund to assist the nations most vulnerable and impacted by the effects of climate change. Read on for key takeaways from COP 27 and implications for the Global South.

The much-anticipated conference, dubbed the Africa COP, marked 30 years since the adoption of the United Nations Framework Convention on Climate Change (UNFCCC). While much has transpired and the planet has come a long way in its fight against climate change since then, some nations have been left behind in achieving their carbon goals and are not experiencing the intended benefits.

Developing nations have long sought financial assistance to rebuild their social and physical infrastructure, but the World Bank and other publicly-funded lending institutions have failed to fulfill these growing needs. To address this issue, the UNFCCC, backed by the United Nations Environment Program and several attendee governments, launched a five-year work program to fund and promote smart technology solutions in developing nations, opening ground for tech providers to display their capabilities in the space.

COP 27 proved to be an instrumental platform for service providers and Big Tech players to engage in sustainability conversations and highlight their contributions towards the planet and its people.

The bridge towards a sustainable future must be pillared by collaboration and joint innovation in technology. Partnerships can be seen as the key to climate adaptation and mitigation. Many of these collaborations focus on marrying Artificial Intelligence (AI) and satellite technology. Some examples include:

IBM is partnering with UK’s Science and Technology Facilities Council, among others, to leverage innovations in indexing multidimensional climate data to rapidly discover climate-relevant information from aerial imagery, maps, Internet of Things (IoT), drones, light detection and ranging (LiDAR) scanning, satellites, weather predictions, and climate change projections
Microsoft collaborated with Planet Labs PBC and The Nature Conservancy to build the Global Renewables Watch – a first-of-its-kind living atlas intended to map and measure all utility-scale solar and wind installations on Earth using AI and satellite imagery
Using high-quality geospatial data for disaster predictions and mitigation is very common in the more developed countries, whereas the Global South often lacks the resources and talent to generate and analyze reliable climate data. Partnerships among various stakeholders can bridge the climate data gap. Microsoft has committed to democratizing climate solutions in Africa by combining its AI prowess with Planet Labs PBC’s satellite imagery

The Loss and Damage Fund marked a momentous win for the Global South

As organizations do their part to help the Global South, COP 27 set a milestone by recognizing the disproportionate exposure of the poorer nations in Africa, Asia, and Latin America to climate change consequences. Established after years of appeals by the developing nations to compensate for losses due to climate disasters, the fund is viewed as a major political step to provide the appellants with a sense of justice and rebuild trust among nations.

Let’s take a look at other key implications for the Global South:

Africa’s climate needs remain underfunded – While a step in the right direction, the Loss and Damage fund needs to be backed by effective policies and infrastructure to be beneficial. Historically, the funds promised by developed nations toward climate impact haven’t been fully disbursed or equitably distributed. The Climate Policy Initiative (CPI) noted that of the meager 25% of global climate investments that crossed the borders towards developing nations, Sub-Saharan Africa mobilized only 3% despite being the most vulnerable to climate adversities

Global efforts and African needs are misaligned – Africa’s situation calls for urgent climate impact adaptation, but global climate funds and collaborations announced by service providers are only directed towards mitigation of climate impact

African leaders will rethink their engagement with multilateral initiatives – African nations will further their strategies for adaptation and energy generation considering their primary concerns of poverty alleviation and economic development. Thus, the African region ranks as an attractive climate-related investment opportunity for private players. According to CPI data, private finance comprises half the global climate finance yet stands at just about 14% in Africa

ESG regulations in Africa will become more stringent – As African nations advance in their sustainability journeys and try to attract foreign private investment, they will follow the global trend and strengthen their ESG regulations. Among many countries planning to launch such frameworks this year, Uganda referenced a “sustainable financial system” in its recent five-year plan

This opens several opportunities for service providers and consultants as more enterprises will require their expertise to transition to sustainable models. The increased volumes of ESG data generated will create opportunities for data analytics players, helping to bridge the climate data gap.

The world remains bullish on Africa’s future

COP 27 concluded on an optimistic note as technology, transparent funding, and developing nations’ needs became central to the climate resilience discussions. Innovative solutions across sectors are moving stakeholders closer to achieving their climate pledges.

Organizations are collaborating and prioritizing community impact in developing nations. Public-private partnerships toward sustainable models will make technology and welfare more accessible in these regions. With changing geo-political scenarios, Africa will prove to be an attractive opportunity for various investors and service providers.

To discuss further, please reach out to Rita Soni and Ambika Kini.

Rita Soni, Principal Analyst, Impact Sourcing & Sustainability Research

Email ID: [email protected]

LinkedIn: https://www.linkedin.com/in/ritansoni/

Twitter: https://twitter.com/ritaNsoni

Ambika Kini, Senior Analyst

Email ID: [email protected]

LinkedIn: https://www.linkedin.com/in/ambika-kini/

The Role of ESG in IT Services Pricing: Is There a Case for a Green Premium? | Blog

November 30, 2022

Service providers who lead in green engineering and can produce significantly more carbon-efficient software have an opportunity to price their sustainable IT services at higher premiums and pioneer this emerging space. Read on to explore more on IT services pricing in today’s ESG-focused marketplace.

In the book How to Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need, Bill Gates popularizes the concept of a Green Premium. Simply put, a Green Premium is the incremental charge/cost that buyers must pay to use a clean technology over a “dirty” one.

Now, this isn’t a new notion by any means. Consumers pay more for products that are marked “organic” and happily shell out extra bucks for greener packaging or responsibly-sourced coffee. Green Premiums exist because organizations typically incur more costs to deliver cleaner products and services. But they also generate pricing power due to differentiation.

This concept has mostly restricted itself to mass usage products in a business-to-consumer setting. Can IT service providers replicate this in the enterprise technology marketplace? By introducing sustainability into the technology services, is there a case for a Green Premium?

We believe two distinct paths can lead to a Green Premium in IT services pricing – an external-facing route and an internal one. Let’s explore the external opportunity first.

Green software

While building software, the most important priorities are typically user-centric – user experience, performance, latency, security, etc. Developing carbon-efficient software has never been a core objective. And in the process, the impact of emerging technologies has largely gone unnoticed. Only recently has a host of research been published pointing out the tremendous negative impact the likes of blockchain and artificial intelligence could have on the planet. For example, according to a study performed at the University of Massachusetts, Amherst in 2019, training a single Artificial Intelligence model can cause as much carbon emission as five cars in their lifetimes. No one saw that coming!

But we do see emerging signs of this changing. There is an industry-wide push towards greener software development practices. This includes steps such as considering the carbon impact of architectural decisions, choosing more energy-efficient languages, using data practices that reduce redundancy, and building more hardware-efficient applications. Given that this is an emerging field, there is no single service provider who does it better. And this creates a unique opportunity for service providers to aim for leadership in this blue ocean and materially differentiate their services

Providers who can lead in green software engineering and produce significantly more carbon-efficient software will differentiate themselves from competitors around parameters that genuinely matter to enterprises today. Alongside typical cost savings quoted in most proposals, future slide decks might have a percentage reduction in carbon emissions as one of the key benefits to the enterprise.

Getting the internal act together

Now, let’s explore the internal route that could lead to Green Premiums. Alongside providing green software engineering practices, service providers need to focus on achieving environmental, social, and governance (ESG) goals. A provider who leads in green software engineering but scores low on ESG metrics might not be able to establish credibility with clients.

Sooner than later, enterprises will inevitably start to consider ESG as a key parameter in their sourcing strategy. Traditionally, ESG parameters were mere check-the-box or good-to-have selection criteria. But according to Everest Group research, they are now becoming deal-breakers – or makers – in many instances. We expect to start seeing enterprises look for energy efficiency, impact sourcing, community impact, board-level governance, and transparency/disclosure standards. Service providers who score high on these metrics will be able to materially differentiate themselves against the competition.

The way forward

The primary challenge in this entire process lies in being able to calculate the exact Green Premium of sustainable IT services. No consensus exists yet. Both internal-facing ESG initiatives and cutting-edge green software engineering practices require investments from service providers and are inherently more expensive. A first mover in this space will face this challenge but also have an opportunity to literally set the benchmark.

In an increasingly commoditized industry, ESG offers promise for technology service providers to set themselves apart by creating truly differentiated services. As any ardent observer of the industry will acknowledge, such occasions are few and far between.

Are you a service provider aiming for leadership in this space? As an enterprise, are your providers exploring this opportunity to the fullest? Let me know by reaching out to [email protected] to discuss the emerging topic of ESG and its impact on IT services pricing.

Also, don’t miss our webinar, Key Issues for 2023: Rise Above Economic Uncertainty and Succeed, as we explore major concerns, expectations, and key trends expected to amplify in 2023.

Unlock a New Source of Value Creation – Integrate Sustainability into the GBS Charter to Help BFS Firms Realize Their ESG Goals | Blog

November 16, 2022

Global Business Services (GBS) organizations have a big opportunity to champion Environment, Social, and Governance (ESG) in banking and financial services (BFS) institutions. To learn about six ways GBS organizations can help enterprises reach their ESG goals and unlock greater value, read on.

ESG is creating new opportunities for BFS Global Business Services organizations. Fast-evolving consumer awareness about social, political, and environmental values, emerging regulations, and increased demand for sustainable financial products are pressuring BFS firms to prioritize ESG goals in operations and employment.

Let’s explore the significant role GBS units can play in enabling ESG for enterprises.

ESG products and services emerge

To meet new customer and investor expectations along with regulatory mandates, BFS organizations are building ESG products and services – such as green loans, sustainability-linked loans, and carbon-neutral banking – to make their operations sustainable.

Capital market firms are embracing green underwriting, while asset and wealth managers are steadily moving toward ESG investing. These organizations are also focusing on workplace diversity, pay equity, and good governance structure to meet their ESG aspirations.

This has created a big opportunity for GBS organizations to move from being measured for their labor arbitrage and cost efficiency to the value they can deliver to enterprises. These units can become vital to the enterprise’s ESG agenda by expanding their sustainable service offerings and conducting ESG-specific due diligence and risk assessment. GBS centers’ strong visibility across the enterprise’s functions, operations, and capabilities to support their ESG initiatives will drive this new focus.

Six ways GBS organizations can support enterprise ESG goals and commitments

As BFS organizations increasingly look for ways to support and grow their businesses with an impact-driven mindset, GBS organizations should be at the forefront of defining and internalizing ESG goals.

The new environment has opened up many avenues for GBS organizations to maximize the value they can deliver and become ESG enablers for their enterprises. For a deep dive into the opportunities summarized below, please read our newly released research.

See how GBS organizations can promote ESG initiatives within the enterprise in the image below.

GBS organizations can enable the following key opportunities for BFS firms:

Enhance sustainable investing practices – Support enterprise banks by running/enhancing sustainable investment initiatives, such as portfolio optimization and expansion, and positive and negative screening of these portfolios
Develop new sustainable products – Identify feasible opportunities to expand the green product portfolio for their respective enterprises following the regulatory and competitive landscape
Proactive ESG risk monitoring – Build on their roles in supporting enterprises in managing various risk types such as liquidity, credit, and operational so GBS can be leveraged as specialist ESG risk management centers by enterprises
ESG performance tracking and reporting – Set up dedicated ESG performance reporting teams at GBS centers, which, in turn, will own the management and execution of ESG performance tracking and reporting tasks
ESG compliance reporting – Track ESG-specific regulatory developments across different countries where the enterprise has an operational footprint. Accordingly, it can assess the impact of newly introduced mandates or disclosures requirements on the enterprise’s existing compliance processes
Implement ESG commitments of the enterprise – Undertake sustainability initiatives to integrate the ESG goals of the enterprise across its own operations, people, and functions. For example, a leading US investment bank committed to incorporating sustainability-focused features such as energy-efficient lighting and minimized water consumption policies in its new technology base in Poland. Similarly, a major European bank’s GBS center has been working since 2009 on a Train Green Program aimed at creating sustainability awareness among school children

Call to action for BFS GBS leaders

As GBS organizations take on more strategic roles, it becomes imperative for them to step up and become ESG enablers for their enterprises. To do this, GBS leadership must champion the development of ESG-specific capabilities and prioritize initiatives to drive enterprises’ ESG agendas, while embedding ESG and sustainability practices into their service delivery and operations.

To discuss how we can assist your enterprise with achieving your ESG goals, reach out to Sakshi Garg [email protected], Piyush Dubey [email protected], and Mohini Jindal [email protected].

Discover more about how to integrate sustainability and ESG initiatives into your organization in our upcoming webinar, Driving Larger-scale Adoption of Impact Sourcing from the Inside Out.

CIOs Meeting ESG Commitments Must Go Beyond Reducing Carbon Footprint | Blog

November 9, 2022

Environmental, Social, and Governance (ESG) initiatives and investments are growing in importance and starting to significantly influence the marketplace, particularly for services and products. Almost every large company in the world now has an ESG agenda, comprising CEO and leadership team formal commitments to their boards and other stakeholders. Those commitments now are moving down in the organization to the different functional heads, including the CIO, for IT’s share of the responsibility for meeting the company’s commitments.

New Sustainability and ESG Investment Regulations will Spur a Second Digitalization Wave in Wealth Management | Blog

October 22, 2022

The clock is ticking for asset managers to provide arduous and complex Environmental, Social, and Governance (ESG) data on financial funds mandated under the Markets in Financial Instruments Directive (MiFID II) by January 2023. To meet European regulations, the wealth management industry will need to embrace advanced digital tools to account for investors’ ESG preferences – leading to a second digitalization wave. Read on to learn how this will impact technology providers.

The global wealth management industry is at an inflection point. The strong growth in assets under management for wealth managers has been fueled in part by the digitization wave sweeping this industry.

Generational wealth transfer and the rise of the next breed of investors have redefined advisory services from a physical to a hybrid model. This step change in wealth management firms’ traditional customer base has led to increasing demand for tailored and digital customer experiences.

The first digitization wave resulted in firms increasingly collaborating with FinTechs, building in-house innovation capabilities, and adopting digital technologies such as Artificial Intelligence (AI) and analytics to develop new products, services, robo-advisors, and business models.

With the rise of sustainability and ESG preferences in investing, a second wave is coming

As investors and advisors settled into the new normal and wealth management services became accessible to all, another demand pattern emerged. Next-generation investors are cautiously choosing the right wealth manager to help manage their wealth.

Today’s new client base is increasingly attracted to companies with strong sustainability and ESG standings and wants evidence from wealth managers of funds’ internal and external sustainability commitments.

However, the rise of greenwashing poses serious reputational risks for wealth managers. The lack of a single source of truth in analyzing ESG data means that no standard terminology exists to accurately classify any company’s ESG standing.

Investors are baffled by the sheer increase in ESG funds entering the market and are concerned about their authenticity. Millions of dollars in penalties have been levied on large financial services enterprises over greenwashing claims this year alone.

New MiFID II guidelines on ESG

To fight greenwashing, the European Union has passed MiFID regulations to promote sustainable finance products and facilitate greater transparency for all participants. Under this amendment, advisors will need to identify client ESG preferences and incorporate sustainable products in portfolios accordingly.

However, classifying ESG data for each fund across 580 mandatory, conditional, and optional fields is a mammoth task. The disparate data sources make it difficult for enterprises to accurately account for ESG scores. Another bigger emerging problem is how all this data will be used to connect to investors’ sustainability preferences.

Because of the data complexity and challenges facing asset managers to comply, the original deadline has been extended from August 2023 to January 2023.

What will this mean for wealth technology providers?

The industry already faces competition from emerging FinTechs who capture market share and provide contextualized experiences. On top of this, a significant gap exists between the new guidelines and the current state of investment platforms to meet these requirements.

Asset and wealth managers will need to assess whether their current platform can ensure compliance with this changing regulation and partner with technology providers to modernize their digital solutions.

This will be challenging as we believe the user interface in many wealth management technology platforms has not evolved at the same pace as the core functionality, which will hamper the industrialized delivery of personalized and contextualized experiences at scale across hyper-segments.

The new regulations will require adding an ESG layer to existing platforms to account for investors’ preferences. As sustainability and ESG preferences become ingrained and drive technological changes in current platforms, expect to see a second wave of digital advancements coming.

Wealth technology providers will have to accelerate their ESG roadmaps in the next 12-18 months and show value from these initiatives. We recommend providers take the following actions:

Craft roadmaps to ensure their technology platforms comply with the new regulation
Engage proactively with wealth management clients to help them navigate the nuances of the regulatory change
Invest in a partnership ecosystem for ESG data providers that can help enterprise clients solve the data gap

The compliance deadline extension has given wealth managers much-needed extra time to assess their technology offerings and develop roadmaps to incorporate ESG preferences. With the compliance date fast approaching, providers will need to move quickly to invest in their platforms to provide the digital solutions the wealth management industry needs to meet the MiFID II ESG amendments.

Has your organization made changes to meet the sustainability and ESG investment regulations? Please reach out to [email protected] to share your experiences and learnings.

Also, don’t miss our LinkedIn Live event, Sustainability and the CIO’s Office: A Powerful Connection, to learn how the diversity of people and power of technology can strengthen your sustainability strategy.

Ready, Set, Go – Scope 1, 2, and 3 “Emissions” Extended: How ESG Standards Must Measure People and the Planet | Blog

October 11, 2022

While the decades-old greenhouse gas emissions scopes are a ubiquitous tool for reporting carbon footprints, the reporting standard needs to evolve and extend. Organizations must also measure their impact on people to provide a holistic picture of their sustainability performance. Read on for our new model for extending the global standard of scope 1, 2, and 3.

Scope 1, 2, and 3 emissions explained

More than nine out of ten Fortune 500 companies use the following three scopes to measure, report, and manage their Greenhouse Gas (GHG) emissions:

Scope 1 – your facilities –emissions from fuel sources a company owns and controls

Scope 2 – controlled by you, procured by you –emissions through purchasing electricity

Scope 3 – influenced by you, extending stakeholders –emissions considered indirect to the company due to less control including the supply chain, transportation, and asset portfolios. For many industrial sectors, this is the largest scope

SDGs are comprehensive and all-inclusive, and they do need a comprehensive take on sustainability by enterprises

Sustainable Development Goals, which were adopted in 2015 by the international community, encompass both social and environmental aspects of sustainability. SDGs are witnessing a bigger global collaboration than the Millennial Development Goals (MDGs) and create more space for the private sector’s involvement in realizing the goals. Rooted in human rights, and weaving them with environmental issues, SDGs give a robust opportunity to the private firms to explore their role in slowing down the global warming and making the world a more inclusive space.

With SDGs being a comprehensive take on both social and environmental aspects of sustainability, enterprises need an equally comprehensive outlook on their role in realizing the goals. Enterprises have started zeroing down on their carbon footprint using GHG Protocol. However, they are still falling short on measuring their social footprint and generate the right insight using their social footprint data. While there are several metrices and global standards to measure the social footprint of an organization, these standards are diverse and lack comprehensiveness.

While GHG emissions protocols comprehensively capture an organization’s carbon footprint, a broader focus is required. Expanding these scopes to encompass sustainability’s social aspects will truly serve the aspirational SDGs the world wants to achieve under the United Nations’ 2030 Agenda for Sustainable Development.

Extending the three scopes for success

With this set up, we can all agree the ubiquitous GHG emissions scopes can be extended to include a social footprint for a holistic approach. Using the same logic, we at Everest Group recommend including the following elements in your social scopes:

Scope 1 – your people – A company’s positive and negative influences on employees count towards the social scope 1 footprint. This includes workplace diversity, gender pay gaps, accessibility, employee physical and mental health, parental leave (including maternity, paternity, and adoption benefits), and job security

Scope 2 – controlled by you, procured by you – A company’s positive and negative influence on contractual and outsourced employees, customers (e.g., fair pricing practices), and supplier diversity programs broaden the social footprint.

Scope 3 – influenced by you, extending stakeholders – A company’s wider impact on its customers, supply chain, community, and other stakeholders. It can include:

Expanded production and services to underserved markets
Welfare policies for suppliers’ personnel throughout the value chain
Considering consumer physical and mental well-being in designs
Providing employment opportunities to local communities
Ensuring sustainable resource exploitation and value-sharing ecosystem with local communities
Implementing impactful and relevant CSR initiatives to serve the community

Measuring the total sustainability picture

Although these elements are covered in different national and international laws, standards, and company policies, developing a common definition for social footprints is necessary. Generating indices or scores is one way to measure and rank companies on their performance in these key areas.

In addition to taking into account the people aspects in consolidated ESG scores, the standards should also examine the impact companies have on the planet that goes beyond simply measuring aspects of environmental degradation like deforestation, waste production, and plastic production in siloes.

An international ESG standard should integrate all these elements. Having an integrated ESG score that consolidates the people and planet aspects of sustainability holistically would shed valuable light on a firm’s true sustainability-led values.

With diligence and global collaboration between businesses, governments, and international organizations to develop these standards, the environmental and people aspects of sustainability can be bridged.

What can’t be measured can’t be managed. Everest Group strongly advocates for a comprehensive indexing of enterprises’ social and environmental footprints. With just eight years until 2030, we need to begin evolving our measuring standards now to achieve SDGs in a true sense.

To have scope 1,2, and 3 model explained in greater detail, contact us at [email protected], [email protected], or [email protected].

Learn about Everest Group’s pledge to help organizations around the world increase the number of jobs provided to workers in marginalized communities through impact sourcing – while providing businesses with access to the best talent with high levels of reliability, productivity, and engagement. Our Commitment to Action is to grow the impact sourcing market from its current level of 350,000 FTEs to half a million in three years.

The Ukraine-Russia War is Impacting Global Sustainability Initiatives and Derailing Progress in Meeting SDG Goals | Blog

August 4, 2022

The Ukraine-Russia War has hindered the progress of nations and businesses toward achieving global sustainability goals. Along with its humanitarian and economic consequences, the crisis has altered investment in energy, defense, and autocratic states. Can the enthusiasm the world felt just seven years ago about reaching Sustainable Development Goals (SDGs) be recaptured, and what does the future hold for sustainability enablement service providers? Read on to find out.

The optimism around achieving SDGs, also known as the Global Goals, has waned since its adoption by the United Nations in 2015 with the promise of improving people’s lives and preserving natural resources.

Global sustainability initiatives have been impacted by the Ukraine-Russia War, the pandemic, and supply chain issues. According to the UN, income for about 60% of the global workforce declined during the pandemic. Supply chain issues further exacerbated the economic contraction and humanitarian losses by inflating food and fuel prices.

The war is impacting progress in accomplishing SDGs, directly through its humanitarian and economic consequences, and indirectly through its effect on Environmental, Social, and Governance (ESG) investments.

The following three major challenges have emerged due to changing perceptions about ESG investments in light of this crisis:

The war has ramifications on global energy transition

The Ukraine-Russia war has slowed down the global energy transition to renewables in two ways:

Increased metal and gas prices slowing renewable technology investment – The region is a leading supplier of “energy transition metals” like nickel, palladium, copper, and lithium. Russia accounts for 7% of the world’s mined nickel and 33% of the world’s mined palladium, which are used in electric vehicle batteries and to reduce automobile emissions, respectively. Ukraine is the largest supplier of noble gases like krypton, which is used in renewable technologies. The war has reduced the already sluggish rate of renewable technology investment by increasing the prices of these metals and gases.

Ramped up coal production and fossil fuel investment – Russia accounts for 17% of the world’s natural gas supply, which is perceived as a transition fuel globally. Before countries develop sustained sources of renewable energy, natural gas is replacing fossil fuels due to its lower carbon emissions. The issue is more pronounced in Europe, as about 80% of Russia’s natural gas is exported to Europe, fulfilling about 40% of Europe’s gas demand. The war has inflated gas prices. Although the US has agreed to supply more gas to the region, this raises the question of sustained gas supply and puts pressure on European governments to accelerate their net-zero strategies. The market is optimistic that Europe will transition to clean energy faster than expected because it needs to become energy self-reliant.

Slow investment in renewable energy has further dipped since 2018. While renewable energy requires patient and risk-tolerant investors, fossil-fuel investment generates considerable returns quickly due to the massive existing hydrocarbon infrastructure. In the war’s wake, fossil fuels are seeing an investment frenzy, with Canada, the US, Norway, Italy, and Japan increasing production. Many countries across Europe again are ramping up coal production to avoid depending on Russian gas. In the short run, it seems that the world has taken steps back on global warming

Investment in defense is being reclassified as sustainable

Before the war, steering away from investing in arms and ammunition was considered prudent and ESG conforming. However, the war has brought back fears of traditional warfare. Now, many nations have started taking a U-turn from this narrative by categorizing defense investment as sustainable for national security and global alliances. Many global defense suppliers’ share prices spiked upward the first day Russia invaded Ukraine.

Many European nations, including Germany, Poland, and Sweden, have announced increases in their defense budgets. SEB Investment Management, a leading asset-management firm in the Nordics, has revised its sustainability policy to allow some of its equities and corporate bonds to be invested in the defense sector. With skepticism associated with traditional warfare restored, investors and governments are bound to pump more money into arms and other defense products.

Investors are steering away from autocratic states

Investors are facing heightened reputational risks for associating with authoritarian regimes. The boundary between investing in government bonds of an autocratic state and investing in companies conducting business in/with the autocratic states is now blurred for investors. Western investors are striking Russia off their investment list, especially if the investment is ESG-compliant. This can dampen investments in other autocratic states and the businesses associated with them.

How does the war impact sustainability enablement service providers?

The war has temporarily derailed the uptake of renewable energy investments. To start, this will impact enterprises’ Scope 2 emissions reduction goals. Scope 2 emissions are generated from purchased electricity, and reducing these emissions requires enterprises to turn towards renewable electricity sources.

The sustainability enablement technology industry also will experience a short-term supply crunch of semiconductor chips, which is an important input in producing sustainability technologies.

To deal with these choppy waters, organizations will need help from consulting and technology providers to shift their sustainability mix to access net-zero strategies to still achieve their committed targets for global sustainability initiatives.

Moreover, as the sustainability ecosystem matures, forward-looking investments in scaling undertakings such as enhancing trust in data and reporting (avoiding greenwashing claims), scaling operations to accelerate net-zero targets, and creating persistent governance systems will continue to create momentum.

To further discuss global sustainability initiatives, contact [email protected], [email protected], and [email protected]

You can read more about the impacts of Russia’s military action in Ukraine on services jobs and global sourcing in our blog, “Will Ukraine’s Invasion Have a Domino Effect on Other Geopolitical Equations?”

Category: ESG and Sustainability

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Scope 1, 2, and 3 emissions explained

SDGs are comprehensive and all-inclusive, and they do need a comprehensive take on sustainability by enterprises

Extending the three scopes for success

Measuring the total sustainability picture

How does the war impact sustainability enablement service providers?

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