Category: ESG and Sustainability

Diversity is Gaining Ground in BPS – Why Your Organization Should Care | Blog

While not new concepts to the services industry, the COVID-19 pandemic has increased the number of boardroom discussions on diverse hiring practices, especially with the ongoing talent shortage. Having a diverse workforce can provide numerous benefits, making it the way forward for the Business Process Services (BPS) industry. To learn more about why your organization should pay attention to supplier diversity, Impact Sourcing (IS), and Diversity, Equity, and Inclusion (DE&I), read on.

What do these terms mean?

  • Supplier diversity: Constitutes the percentage of diverse providers within an enterprise’s supplier portfolio. This overarching term means encouraging partnering with businesses owned by minorities, women, veterans and service-disabled veterans, members of the LGBT community, and other historically underutilized businesses, and small business concerns for business procurement
  • Impact sourcing: Socially responsible business process outsourcing that enables global companies to improve business outcomes by hiring and providing career development opportunities to people who generally have limited employment prospects
  • DE&I: According to datapeople.io:
    • Diversity is the demographic makeup of an organization’s workforce. The unique aspects that make one person different from another person is diversity, whether it’s gender, ethnicity, physical ability, age, national origin, socioeconomic background, religion, or a combination of any of those aspects (known as intersectionality)
    • Equity levels an uneven playing field by providing everyone with equal access to opportunity
    • Inclusion is the environment an organization fosters for candidates and employees. An inclusive workplace is one where all candidates and employees feel welcome. It provides all candidates with equal opportunities for employment, job success, and organizational advancement

Why should we pay attention?

Diversity is an important conversation happening right now because hiring individuals with diverse backgrounds and thoughts can result in greater innovation and more creativity. Bringing together different perspectives influenced by varied life experiences can enhance the creation, function, and delivery of products and services. Along with this richness in thinking come tangible financial benefits beyond lower operational costs. Thus, impact sourcing is impactful sourcing – for the bottom line too!

According to Everest Group research, hiring IS workers and having a diverse workforce can provide the following benefits:

Tangible benefits Intangible benefits
Lower Total Cost of Ownership (TCO) TCO for IS workers is 3-10%   less compared to traditional workers because of lower attrition costs Greater Employee Engagement – Having an involved and motivated workforce generates long-term savings as companies spend less time recruiting and training
Operational performance – IS workers have a track record of meeting target Key Performance Indicators (KPIs) Competitive advantage – Being viewed as a socially-responsible employer can help companies win business and attract employees
Multilingual/vernacular language services delivery – Diversity and impact sourcing help companies access a large pool of skilled, high-potential yet under-utilized talent Fulfillment of corporate social responsibility and diversity objectives – Companies can contribute towards their CSR goals by employing IS and diverse workers
Lower attrition – Attrition among IS workers is significantly lower than traditional workers Direct and indirect positive community impact – Five to six family members or related individuals benefit from every IS worker hired

Why now?

We’re seeing the Great Resignation and a talent war play out in the services industry. As companies reassess their talent and hiring strategies and working models for the future of work, they’re thinking about previously untapped talent in rural areas and tier-3 and -4 towns and cities. These locations have gained attractiveness due to the pandemic-induced mainstream prevalence of hybrid and remote working, ubiquitous high-speed internet, and infrastructure availability for a work-from-anywhere setup.

Hiring from diverse communities is a win-win for all, especially now. At the same time, establishing and practicing norms and values of inclusion and equity among employees will help foster more engaged and productive employees, lowering attrition and associated new-hire training costs.

Which service providers are actively focusing on diversity?

Growing numbers of providers are making this area a priority. Since diversity has been around for a long time, large BPO firms such as Startek, Sutherland, and Teleperformance, among others, have been focusing on diversity for its direct and indirect benefits. Smaller providers also are leveraging diversity and impact sourcing as the cornerstone of their talent strategies. Some examples include:

Supplier diversity:

  • Alorica – The largest minority-owned BPO and a global certified Minority Business Enterprise. It is also certified by the National Minority Supplier Development Council (NMSDC) and the Southern California Minority Supplier Development Council (SCMSDC)
  • GlowTouch – A Women’s Business Enterprise National Council (WBENC)-certified woman-owned enterprise
  • Triple Impact – Through its alliance with the Military Spouse Employee Partnership (MSEP), it has access to a vast talent pool of military spouses

Impact sourcing specialists:

  • Humans in the Loop – A social enterprise powering the Artificial Intelligence (AI) solutions of the future, with a mission to improve the lives of conflict-affected people through the use of technology and innovation. It works with refugees and asylum seekers in Eastern Europe and the Middle East
  • Vindhya – An India-based company that employs and empowers people with disabilities, women, trans individuals, and others from marginalized communities, providing contact center support, data management, and accessibility testing services
  • Televerde – Empowers incarcerated women in the US and UK by providing training, education, and jobs to help them re-enter their communities and build meaningful and rewarding careers

DE&I:

  • Employee-led groups – Companies such as [24]7.ai, Cognizant, Comdata Group, Conduent, Datamatics, EXL, Infosys, NTT DATA, Qualfon, Sitel Group, TCS, Teleperformance, TELUS International, Transcosmos, TTEC, VXI, Webhelp, WNS, and Wipro have D&I committees, diversity councils, and employee groups
  • Partnerships – Genpact has multiple partnerships with organizations such as Coqual, Moving Ahead, and 30% Club to promote diversity
  • Company initiatives – Accenture is making progress toward its goal of having a “gender-balanced” workforce by 2025 and Mphasis is creating an Alumni Club to gradually integrate second-career women back into their offices

Does it work in the real world?

Impact sourcing is making a meaningful difference for people with limited employment opportunities. One example is Teleperformance, which hired more than 70,000 IS workers last year alone and employs 40,000-plus workers without secondary school education at their offices across the globe.

Teleperformance started hiring IS workers in South Africa in 2013-14, primarily for domestic delivery, and has consistently found these individuals achieve the same performance levels as traditional workers, according to an Everest Group study conducted with Teleperformance in 2016. Encouraged by these positive experiences, the company worked with a training academy to train and hire IS workers specifically for its international BPO operations.

Our interviews with other market participants indicate that even companies that do not measure the performance of IS workers have reported lower attrition among IS workers, and there are multiple instances of these talented workers growing their roles to senior and managerial positions.

Positive Outlook

Customers want to interact with organizations that have employees who look like them, and people also want to work for companies that care about their communities. While diversity and Environmental, Social, and Governance (ESG) present challenges such as inadequate data disclosures, “greenwashing,” and difficulty in calculating estimated Return on Investment (RoI), they can be a vital part of a company’s Corporate Social Responsibility (CSR) policy. They are thus becoming increasingly important as an enterprise procurement requirement.

We believe that good social practices should be embedded within work rather than be a separate undertaking. Diversity is not just beneficial for companies commercially but also reaps huge non-tangible benefits in terms of improving brand image, increasing employee retention, and generating goodwill – making it the way forward for the services industry.

To learn more about impact sourcing, read this related blog. If you are interested in discussing these topics, reach out to [email protected] or [email protected].

Making It Count: Why the Latest IPCC Report Should Compel Enterprises to Rethink the ‘E’ in Their ESG Strategies | Blog

The repercussions of climate change and global warming have been exposed in more ways than one over the past 12 months. The heart-breaking pictures of forest fires and increased natural disasters would cause even the fiercest of climate-change skeptics to look up and take notice. The latest reckoning has come from one of the top authorities on climate change – the Intergovernmental Panel on Climate Change (IPCC).

Its recent warning of a ‘code red for humanity’ signals the urgent need for enterprises to strengthen their commitment to the “E” in Environmental, Social, and Governance (ESG) strategies. Read on for more on our continued analysis of this important issue and what steps your organization can take toward achieving a more sustainable future.

IPCC and its latest findings

As the United Nations body responsible for conducting scientific assessments on one of the gravest issues facing our world — climate change, IPCC conducts studies to determine its repercussions, the future risks that it presents, and avenues to mitigate the ravages of this phenomenon.

In its latest Climate Change 2021 report, the IPCC presents a realistic picture of the impact of climate change and details measures the world can take while there is still time to act.

Among the report findings are the following:

  • Human influence is unequivocally responsible for the warming of the atmosphere, ocean, and land, which has resulted in widespread and rapid changes in the atmosphere, ocean, cryosphere, and biosphere
  • The scale of recent changes across the climate system as a whole and the present state of many aspects of the climate system are unprecedented. Case in point – in 2019, the levels of carbon dioxide (CO2) in the atmosphere were higher than at any time in at least the last 2 million years; also, global mean sea levels have risen faster since 1900 than over any preceding century in at least the last 3000 years
  • Global surface temperature will continue to increase until at least the mid-century under all emissions scenarios considered. Global warming of 1.5 degrees Celsius and 2 degrees Celsius will be exceeded during the 21st century unless deep reductions in CO2 and other greenhouse gas emissions occur in the coming decades

Image 1

What important role do corporations play?

Corporations globally bear a huge onus to prevent global warming and reverse its effects. Their activities also directly contribute to the likelihood of the world achieving the COP 21 commitment to limiting global increase in temperatures to well below 2 degrees Celsius and preferably to 1.5 degrees Celsius, compared to the pre-industrial period. But the IPCC report warns that, unless impactful measures are taken, these figures are most likely to be breached during the 21st century itself.

And while corporations worldwide have started putting more emphasis on their commitment to do their part to mitigate their environmental impact through ESG initiatives, there is an essential need for them to pivot their ‘E’ in ESG plans towards concrete steps to more meaningfully contribute towards a sustainable future.

An analysis of the recent wildfires around the world demonstrates the urgency of ‘E.’ While wildfires are a phenomenon that take place during the hot and dry season, the recently exacerbated instances of these fires are immensely worrying. Here’s how the world has been increasingly grappling with forest fires:

Image 2 The Siberian wildfires

The eastern regions of Russia (constituting some of the coldest parts of the world, including parts of Siberia) have been experiencing unprecedented forest fires in 2021. From July to mid-August, this region had more than 300 active forest fires, and at one point, Siberian wildfires were bigger than all wildfires raging in the rest of the world. NASA reported that the smoke from the Siberian wildfires reached the North Pole for the first time in recorded history. Long story short – the Arctic is burning at scales never seen before, and global warming is a major culprit behind it.

  • The Greece wildfires

The devastating fires raging during mid-August in Greece have been described by the Greek Prime Minister as “a natural disaster of unprecedented proportions.”

The rising global temperatures could lead to increased heatwaves which would spell drier weather conditions, leading to more extreme wildfires and, in turn, contribute to global warming – a vicious circle indeed.

  • The U.S. wildfires

Wildfires in the U.S. are causing huge devastation. Recently, the fires in Tahoe Basin, California, have forced thousands to evacuate. As these fires continue raging in the backyards of some of the most prominent organizations of the world, scientists have said that climate change has made this region much warmer and drier thus rendering it susceptible to more frequent and destructive wildfires.

Where does the ‘E’ of ESG come into the picture here?

Corporations often engage in what is known as carbon offsetting to meet emissions targets. Carbon offsets are essentially meant to account for a company’s carbon production and balancing the scales on it. An example of carbon offsetting could be a steel company engaging in afforestation or reforestation to ‘offset’ a certain percentage of the carbon produced by their operations.

Image 3

But the recent wildfires raise pressing questions for corporations such as: What if the forest under their afforestation project itself becomes a victim of wildfires? Does such a corporation account for the carbon produced due to this fire rather than offset and report the same in its ESG filings? What lies beyond afforestation as a means of carbon offsetting?

The way forward for corporations

Here are some ways enterprises can take action:

  • Realize that carbon offsets, while helpful, do not present the comprehensive solution: Essentially, the risk of relying heavily on carbon offsets would convert efforts into a ‘balancing game’ rather than a ‘mitigating game.’ So, while any future emissions are being balanced by a reforestation project, what happens to the existing carbon already contributing to rising temperatures? Hence, enterprises must also take active measures to seek carbon footprint mitigation
  • Diversify carbon offsets: Instead of having high exposure to a certain carbon offset activity, corporations should diversify their offset activities – following the golden rule of diversification and risk optimization. Considering the marginal cost of abatement as a metric to calculate their carbon footprint reduction against costs could be a viable way forward
  • Report with transparency: Corporations run the risk of ‘greenwashing’ if they fail to communicate the actual impact of their ESG initiatives. Now more than ever, with increasing interests and scrutiny, corporations who are truthful with their ESG filings could reap more benefits than their counterparts who are not as transparent. Sharing information and experiences with other companies on the initiatives that create the most impact and the ones that do not will help achieve results at scale because when it comes to the environment, it’s always a ‘team-game’
  • Adopt ESG technology: With their massive and expanding footprints, enterprises must think about the different layers within the sustainability technology stack – from advisory and applications to data, cloud, and infrastructure. Learn more about the scope of services provided by the technology market around sustainability here: ESG tech stack- Everest Group

While voices on the other side may question the real impact and efficacy of ESG efforts by enterprises, we believe it is a little too soon to declare ESG as passe. As ESG gains more maturity, reliable data and studies will help corporations, governments, civil society bodies, NGOs, and other stakeholders course correct.

At this juncture, one is reminded of one of the classic dialogues from the movie Shawshank Redemption: “Remember, hope is a good thing, maybe the best of things, and no good thing ever dies.” But only with collective and impactful actions can we have the luxury of bearing the much-needed hope for a future without code-reds.

To discuss your ESG efforts, please feel free to contact Aakash Jaiswal, Senior Analyst, at [email protected], or Rita Soni, Principal Analyst, Impact Sourcing and Sustainability Research at [email protected].

Where Business Meets Purpose: Launching Our Inaugural Impact Sourcing Specialist State of the Market | Blog

We are very excited to share the launch of Everest Group’s inaugural Impact Sourcing Specialist State of the Market Report. The report will compare global services companies where the primary talent strategy is impact sourcing. I had the honor of conducting a similar study in 2013 with a focus on India for NASSCOM Foundation, funded by the Rockefeller Foundation. But what a difference nearly a decade can make in the growth of impact sourcing.

Learn how to participate and receive the RFI

The increased adoption of this business practice has been driven by social movements across the globe that have prompted greater attention to equity and inclusion within society, impacting the business community. The United Nations’ launch of the Sustainable Development Goals in 2015 brought major public attention and an increased focus on global partnerships. The momentum was furthered in 2019 by the US association of CEOs Business Roundtable redefining the purpose of a corporation to promote an “economy that serves all Americans” and recognizing all stakeholders as being essential.

In recent years, many grassroots social movements are calling for social justice globally. Near continuous climate change disasters and the ongoing global pandemic have made the world feel a lot smaller and further highlighted the plight of marginalized communities. Finally, as a Gen Xer, I must give credit where credit is due – members of Gen Z are actively looking for purpose and are launching and joining impact sourcing companies to address needs in their communities.

With the combination of these factors, we have seen a growing movement for mission-driven companies within the global services industry. Today, impact sourcing specialists span the globe from developing communities in South Africa to middle-income parts of the U.S. and Europe. The companies are creating livelihoods for a wider range of marginalized communities with different operating models to accommodate these groups.

“Rural” has expanded from the Himalayas to Appalachian mining towns. Persons with disabilities now include neurodiversity alongside physical disabilities. Women are at long last being included in distinctive and meaningful ways in an industry that has struggled with diversity. And the list goes on to include veterans, refugees, native populations, and the incarcerated.

Impact sourcing operating models are also more diverse. Our initial analysis of the market shows many creative sales strategies, multi-country delivery approaches, innovative training programs, and unique employment models, to name a few. We have also learned about partnerships, M&A, and investor interest beyond the usual impact investors. This is an exciting turning point for the impact sourcing movement and space to be in!

Another big change since 2013 is the list of ecosystem builders has grown and strengthened the movement. We are proud to partner with leading global associations, networks, and platforms that are advancing impact sourcing including BSR/Global Impact Sourcing Coalition, the International Association of Outsourcing Professionals (IAOP), Business Process Enabling South Africa (BPESA), Intelligent Sourcing, and many more.

Your help is needed to continue to build collective insights into this vital market. Our State of the Market study will provide impact sourcing specialists with a unique opportunity to compare themselves to peers. It also will provide buyers with valuable insight into the latest services the market has to offer, locations, and companies using impact sourcing as a talent strategy.

Connect with us to learn how to get involved with this confidential study and assessment. If you self-identify as an impact sourcing specialist, please click the participate link below to receive the Request for Information (RFI) packet. Thank you in advance for participating.

Participate and Receive the RFI

Resources:

Case for Impact Sourcing

What’s in a Name – Defining Our Journey toward Sustainability 4.0 | Blog

More and more companies today are undertaking sustainability-related initiatives in response to pressing global, social, and environmental issues. Leading organizations are finding ways to instill betterment into their businesses, from educating and involving employees in grassroots community efforts to embedding greater purpose into their core business models.

Companies have learned that good does not come from charities and non-profits alone. Businesses already play a vital role in the economy by creating jobs, fostering innovation, and providing essential goods. Adding sustainability initiatives helps considerably in creating shared impact. In the last few years, we’ve seen large organizations significantly increase their sustainability reporting. And companies are discovering that, in doing good, not only are they giving back, but they are achieving business value and competitive advantage.

With the pandemic and social unrest creating greater pressure for change, forward-looking companies are now taking their sustainability efforts to the next level and realizing the business advantages this brings. To learn how, read on.

What does this mean at Everest Group? 

Within ESG or Environmental, Social, and Governance, the “social” component is particularly relevant to Everest Group. Our industry is about people and driven by people, making it practical to interweave economic and social betterment into the business model from the base – while also adding the “good” into business practices. With the global services industry naturally being people-driven at its core, Everest Group can advocate for human capital development, or ensuring people are offered equal opportunities and chances to succeed.

Everest Group is prioritizing Impact Sourcing under the sustainability umbrella. This growing business practice involves intentionally hiring and nurturing careers for people from marginalized communities who have fewer chances of employment and prioritizing suppliers that do so.

With the UN declaring a ‘code red for humanity’ for climate change, the environment is also a critical need to address. With the breadth and reach of our industry knowledge, we can help to bolster the opportunity to leverage sustainability principles to make an impact. Through partnerships, Everest Group helps businesses embrace social and environmental initiatives that will also deliver business impact within the services industry.

Purpose framework

Finding competitive advantage in the growing sustainability market

Years ago, it was simple to say that a business existed only for shareholder profit maximization. Adding responsibility to business models brings it into the 21st Century purpose-driven economy. Now is the ideal time to acknowledge sustainability efforts with the issues we face today affecting all locations and industries, whether environmental or social.

Today, over 90 percent of large global enterprises are reporting on sustainability in some form, representing a great increase from around 70 percent about eight years ago. And ESG investments have increased among the top 30 IT service providers tracked by Everest Group by 51 percent alone since early 2020, all of which illustrate the growth of the sustainability market.

Enterprises and service providers are starting to see the benefits of embedding sustainability into their practices. Sales are rising because consumers want to know they are spending their money on products that lend to a larger purpose. Further, prospective employees are now beginning to navigate toward companies where they know ethical and sustainable practices are part of the business.

Moreover, large corporations are making bold commitments towards more diverse suppliers, lower carbon emissions, and incorporating environmentally-safe production processes.

 What does this mean for your company?

One of the initial challenges of becoming purpose-driven is putting a description and goal behind what the company wants to achieve. The evolution of sustainability has allowed companies to apply it at different levels and define their journey. As companies move through the levels, they discover just how much can be achieved. The conversation has evolved with a multitude of terms now used to define sustainability as illustrated below:

Screenshot 2021 09 14 093240

1.0 Checkbook Philanthropy: In the earliest stages, sustainability involves encouraging employees to give back, either through volunteering or choosing a non-profit to contribute to. Getting employees involved also inspires goodwill within the community and provides knowledge of the community’s needs.

2.0 Triple Bottom Line (people, planet, profits): Then, sustainability progressed to the next level, where the idea of the triple-bottom-line lens of people, planet, and profits arrives. Here businesses look to see if they can mitigate any effects they might have on people and the planet such as companies checking to see if they may be putting their employees at financial, health or any other risk.

3.0 Responsible Business: At this point, companies begin to think about how they can mitigate their environmental and social impacts by considering steps such as reducing travel or moving to a hybrid work from home model to lower emissions. This is when businesses also recognize the business opportunity in doing good, as previously described.

4.0 Purpose Driven: In this stage, sustainability becomes more purpose-driven within the company. Impact initiatives are not just about shareholder maximization; it is now about stakeholder engagement and becoming a purpose-driven business. Stakeholders help broaden the company’s network, whether it’s the community it operates in, the employees, or the planet. Level four broadens the “good movement” and says, “we’re here to serve.”

What do we call it and what’s to come?

We are using the term sustainability in the broadest context of ESG. But as we engage our stakeholders the words will evolve for context and include such terms as supplier diversity/DEIB (diversity, equity, inclusion and belonging), Corporate Social Responsibility (CSR), and purpose.

Whether a company is starting at level one or moving quickly into the more advanced levels of sustainability, it should begin to plan a governance model that will allow it to successfully achieve objectives and measure them. We’re also beginning to hear new roles emerge for those leading the strategy charge and aligning initiatives across departments, business units, and stakeholders such as Chief Sustainability Officer, Chief Responsibility Officer, and more.

With ambitious global goals being set across the ESG spectrum, our objective at Everest Group is to celebrate the progress towards reaching them.

If you would like to discuss sustainability further or have any questions, please reach out to [email protected].

Can “Code Red for Humanity” Be the Signal for Using Digital for Good? | Blog

A landmark United Nations report issued an alarming warning on climate change, calling it a “code red for humanity.” While the situation seems dire, recent positive developments in the sustainability arena keep the hopes for a greener future alive. Read on to learn what immediate steps enterprises can take now to move the needle on sustainability goals through digital transformation.

The UN Intergovernmental Panel on Climate Change (IPCC) assessment report released last week continues to make waves across countries, governments, corporations, and non-governmental organizations (NGOs). It touched a nerve even with those segments of the population who are rarely engaged with climate issues, a sign of rising sustainability consciousness in the zeitgeist.

While awareness toward building a sustainable future has been in the spotlight for over a decade now, it is important to understand the following reasons why the IPCC report has managed to create significant noise:

  1. Timing of the report: Coming just a couple of months before the critical UN Climate Change Conference (COP26) this fall in Glasgow, Scotland, the new report will play a key role in the negotiations. IPCC’s previous assessment in 2013 and 2014 paved the way for the Paris climate agreement
  2. The warnings are clearer and direr: The confidence of the assertions made by the authors is the real strength of this new publication. The clearest of these points is humanity’s responsibility for climate change
  3. Visible effects: As countries continue to grapple with the pandemic, the climate impact over the past few months has significantly worsened. The dangers of climate change are no longer something far away in the future, impacting people in distant lands. It’s here and now and affecting every region and population segment across the world
  4. Rapid changes are needed now: Even after 197 countries signed up to the Paris climate agreement in 2015, the IPCC report claims that we won’t be able to keep the rise in global temperatures below 1.5 degrees Celsius or even 2 degrees Celsius this century unless immediate and sustained deep cuts in carbon take place

 

“Hope is a good thing, maybe the best of things, and no good thing ever dies…” 

The situation is a reality check. However, we see positive signs that possibilities still abound for a greener, cleaner future such as:

  1. Concerted, profound, and immediate efforts can avert the catastrophe: Immediate deep cuts in emissions of greenhouse gases could stabilize rising temperatures. Scientists believe if we can cut global emissions in half by 2030 and reach net zero by the middle of this century, we can halt and possibly reverse the rise in temperatures
  2. The rise of the environmentally-conscious Generation Green: Gen Z and millennials are rewriting the rules of conscious investments and consumption, and taking charge of the sustainability agenda by sustainable investing and their willingness to pay more for eco-friendly products and hold institutions accountable for their actions
  3. The report paves the way for directing accountability: By strengthening the scientific evidence between human emissions and extreme weather, the UN report provides a new, powerful means for stakeholders everywhere to hold corporations and governments legally accountable for the climate emergency
  4. Evolution from checkbook philanthropy to building purposedriven enterprises: While at the beginning of the sustainability journey, the focus largely remained on ad hoc initiatives, where now conversations have transformed into a purpose-driven movement. Businesses are not just focused on maximizing return for shareholders, but on overall stakeholder engagement to build purpose-driven enterprises

Four Steps Enterprises Can Take Now   

Now that we have managed to grab the attention of all audiences, the need of the hour is to get the ball rolling. Here are some steps enterprises can take as they embark upon their sustainability journeys:

  1. Turn intentions into actions: Enterprises globally are pro-actively reporting sustainability. Over 90% of all S&P 500 firms do some sort of sustainability reporting, which is significantly higher than a decade ago. Supplier announcements of sustainability-specific investments have risen significantly over the last 12-15 months, highlighting the strong intent by both sides to drive environmental, social, and governance (ESG) messaging in the market (exhibit below).

 

However, despite having the right intentions, enterprises globally still struggle to envision a comprehensive and actionable ESG strategy that they can adopt. This is where the expanding sustainability vendor ecosystem can play an important role in bringing together the external expertise, tools, and offerings that can help enterprises succeed in their sustainability agendas.

Picture1 4

  1. Set more attainable targets based on accurate predictions: As the impact of greenhouse emissions becomes clearer, it paves the way for enterprises to define quantifiable targets and measure, monitor, and report these goals to guide all decisions and truly become purpose driven. Enterprises can get decision-making guidance from the rising number of specialized data providers who are going deep into ESG areas, focusing on specific industries, lines of business, and action items
  2. Leverage the technology ecosystem to build, implement, and scale sustainability agendas: With their massive and expanding footprints, it’s important for enterprises to think about the different layers within the sustainability technology stack from advisory to applications, data, cloud, and infrastructure. How enterprises scale sustainability across their technology landscape can have significant downstream implications. We believe that strategic partners who can assist clients in end-to-end ideation, implementation, and scaling their sustainability programs will play central roles going forward Picture2
  3. Institute an operating model for sustainability: Business operations and workflows need to embed purpose elements within core business strategies and processes as organizations move up the sustainability maturity curve. This requires thinking about the critical components of sustainability through an operating model shift. Our view of this operating model encompasses key elements such as data, technology, and operations, underpinned by a robust foundation of governance and talent as presented below: Picture3

We covered some of our thinking in a recent webinar on Digital for Good: Shape Your Sustainability Journey and will continue to share our insights as we monitor the latest developments in this space. How are you planning your sustainability journey? We’d love to hear from you by emailing us at [email protected] and [email protected].

Infusing Diversity, Equity, and Inclusion (DE&I) Into Talent Management Strategies: Why It Matters | Blog

While improving Diversity, Equity, and Inclusion (DE&I) has always been a goal for most HR managers, the events that erupted in 2020 called attention to the need for change in the workplace. Following the unending tragedies of racial injustice in America, now, more than ever, it is crucial for organizations to raise awareness and take the right steps toward achieving this. DE&I has become a mission-critical piece of any organization’s culture, HR policies, and efforts into modernizing the workplace. To learn more on how to create successful DE&I strategies, read on.

Defining DE&I

Let’s take a look at the key definitions of each of these terms:

Diversity – The presence of differences within a given setting

In a workplace, these could relate to race, gender, gender identity, age, religion, sexual orientation, ethnicity, nationality, socioeconomic status, physical ability, experience, or knowledge. It is a relational concept and shows up in the composition of teams and organizations. This does not refer to a person being diverse, but rather the company and its teams – it is about the “differences” between people within an ecosystem. Diversity is a much deeper concept than perceived and requires individuals to recognize that people are not a set of attributes and that everyone is unique in their own ways.

Equity – Promoting justice, impartiality, and fairness within any procedure, process, or distribution of resources by an organization or institution

Equity recognizes the differences within individuals and considers the needs of all while rebalancing structures and policies to account for disadvantages faced by minority groups – with an ultimate goal of creating fair access and advancement for all. A deep and clear understanding of the root causes of the disparity within a closed space is needed to truly remove equity issues.

One of the points of confusion when discussing equity is the term “equality,” which means that each individual or group of people are given the same resources and opportunities and assumed to take advantage of those. Equity recognizes the difference of circumstances, abilities, and opportunities, and helps an individual rise above this, and further allocates resources to help them reach an equal outcome.

Inclusion – An outcome to ensure those that are diverse feel and are welcomed, are given a voice and have a say

To an outsider looking in at the process, it may often seem as though an individual in an environment that respects diversity and follows equity is set up to feel included – but this is a misconception. These outcomes are only met when a team and/or company is truly inviting to all. It is a measure of how well individuals can participate and voice their opinions openly without being suppressed in the decision-making processes within an organization or group. It is essential to understand what can be done to make everyone feel valued and strive to design-related policies, processes, physical spaces, and products to feel included.

While diversity and inclusion are outcomes, equity is a process and is responsible for upholding the beliefs of diversity- and inclusion-related goals and actions.

Efforts and approach

DE&I often comes up in Everest Group’s discussions with clients on both sides. Enterprises are increasingly interested in improving DE&I practices within their firm. Several providers are also talking about how they are lending their expertise in this area through training, coaching, and leveraging technology to ensure they prevent implicit and explicit bias in the workplace.

Among the key reasons for enterprises to focus on DE&I initiatives are:

  • Larger talent pool: Enterprises driven to hire a variety of individuals from diverse backgrounds can access a wider and under-tapped talent pools
  • Higher employee engagement: DE&I plays a significant role in ensuring employee satisfaction, motivation, and productivity. Losing any of these three could hamper the business outcome of the company
  • Stronger company culture: Engaging with people who have different experiences makes everyone at the firm feel positive about their workplace and creates a sense of greater belonging
  • Greater innovation and creativity: Bringing together people from varied backgrounds promotes more product and service innovation delivered by a company, reinforcing the critical nature of DE&I
  • Better customer alignment: Marketing efforts that reflect the diverse backgrounds of the company’s workforce will help the business build deeper connections with customers and better understand their needs
  • Stronger employer branding: With the competitive talent market, it has become essential for enterprises to look at ways to improve DE&I to attract and retain top talent

How organizations are using DE&I tools  

While enterprises have some DE&I policies in place, it is important to take a more comprehensive approach to ensure these practices exist in the whole hire to retire sphere. To achieve this, vendors in the talent sourcing, management, and engagement space are developing use cases with DE&I as an underlying concept within the existing solutions.

The below exhibits showcases some of these use cases:

Talent sourcing Talent management/engagement
  • Assisting enterprises to develop DE&I supporting job descriptions
  • Partnering with diversity groups to build diverse talent pipelines/pools
  • Leveraging third-party tools such as blind recruitment software (integrated with CRM/ATS software) to anonymize applications and résumés to ensure an unbiased selection process, based only on the candidate’s experience and skills
  • Collecting internal data and developing dashboards to show diversity data in each step of recruitment. Accessing external data to show the talent supply-demand for diverse candidates in any region and their skills
  • Offering consulting and advisory to help enterprises reduce bias from their recruitment process by reprocessing. Conducting training for hiring managers and a diversity assessment of the current organization, followed with recommendations on improvements
  • Building dashboards and using salary benchmarking to understand compensation offered, compare pay equity between different groups of employees, and identify any disparity
  • Harnessing the power of chatbots and analytics, several employee engagement surveys and feedback tools help HR personnel understand the employee sentiments through active listening and deliver actionable insights to them to improve structural imbalances
  • Leveraging tools such as AI and ML to highlight and prevent any instances of unconscious bias, along with tracking such instances to further offer microlearning courses to the user. The ML model continues to learn through multiple instances and continuously improves the set of suggestions for the end-user
  • Using Artificial Intelligence (AI) assistant to present DE&I situations to employees for more proactive learning
  • Tracking key diversity metrics to help enterprises in succession planning, employee development, and performance management

 

Vision for the future  

DE&I in the workplace is an essential business practice that high-performing firms prioritize as crucial to building environments that help their incredible workforce thrive. It is on top of mind these days and will only grow in importance as companies continue to invest in their DE&I programs. Making meaningful efforts can truly benefit a firm’s growth.

To realize the full advantages of a DE&I program, enterprises need to clearly define their vision toward DE&I, develop strategic plans and a formalized framework, measure key metrics tracking the impact of the program developed based on employee feedback, and continue to improve.

How robust is your organization’s DE&I strategy? Share your thoughts with Rachita Mehrishi.

 

The Environment’s Calling: Sustainable Software Application Development Is the Need of the Hour | Blog

An ever-increasing number of intelligent software solutions on the market is fueling the latest innovations in Artificial Intelligence (AI), digital technologies, and other essential applications, but these come with a real price to the environment. What impact is software development having on our carbon footprint, and how can it be mitigated?

Read on for the first in our blog series of Green Software Development, where we explore best practices that will help enterprises and developers limit their carbon footprint while building applications with a sustainability-first agenda.

Research shows that business use of software is on the rise, and the energy-intensive nature of its design and development is impacting the environment.

The number of software applications deployed by large firms across all industries worldwide has increased 68 percent over the past four years, according to an analysis by Okta Inc. cited in the Wall Street Journal. Recent findings hint that training a single AI model can emit as much carbon as five cars in their lifetimes.

As enterprises embrace the triple-bottom-line-framework of social, environmental, and financial impact, a better understanding of the impact of these digital transformation initiatives on our planet is needed to effectively address these crucial issues.

Hence, the concept of green computing becomes imperative, and greenness in software is emerging as a quality attribute.

Picture2 1 

Green software foundation

More firms than ever before are making commitments to be carbon neutral, or carbon negative as the world attempts to confront the critical carbon dilemma.

Accenture, GitHub, Microsoft, and ThoughtWorks are among the companies that have made commitments to help address the global climate crisis. They have come together to form the nonprofit Green Software Foundation to build a trusted ecosystem of people, standards, tooling, and leading practices for building green software.

The Green Software Foundation is a significant step for the software development industry to manage its carbon footprint and work towards reducing or eliminating it wherever possible. The graphic below illustrates the three pillars that form the basis of the foundation and its steering members:

Picture1 2

However, software relies on hardware to run. As power is physically supplied to machines, energy costs are naturally associated with hardware and are most visible in the data center where they increase costs significantly. While most existing research on green IT focuses on the energy efficiency of hardware, a greater focus is needed on the software development side.

Trends shaping green software development

We see the following three key trends being critical to shaping green software development going forward:

  • High-performance coding standards
  • Building self-adaptable solutions
  • Code reusability

High-performance coding standards:  Going forward, the focus should be on building carbon-efficient applications with the goal of achieving carbon-neutrality. Enterprises should aim to get the most value out of the application for every unit of carbon it is responsible for emitting into the environment.

However, we see a lot of overlap between making an application greener and also faster and cheaper. For existing applications, refactoring can be a very powerful strategy to eliminate useless code, paving the way for energy efficiency and carbon-aware applications.

For net-new application development, below are some key recommendations for green developers:

  1. Control flows within applications should be monitored and optimized. Energy is inefficiently used when an application repeats the same activity in a loop without achieving the intended results and uselessly consumes energy (e.g., polling an unreachable server)
  2. Data exchanged between software applications and/or databases (local or remote) can be optimized using data compression or data aggregation techniques. The energy impact from optimization like this can be crucial in data-intensive and Big Data applications
  3. Interaction with the hardware layer must be enhanced through code. With the increasing footprint of Internet of things (IoT) applications, this becomes crucial as the number of peripheral devices increases exponentially

 

Building self-adaptable solutions: By providing different configurations of the same application and activating them at varying times, a trade-off can be achieved between the features provided and the energy consumed. This is very similar to defining the eco-mode of operation for applications used for cars and appliances. Compared to refactoring, self-adaptation introduces a relevant set of changes to the software system and is more of an architectural concern.

Tools available in the market can be very useful to ensure enterprises are making energy-saving decisions from the start. For Android apps, Android Studio has a built-in energy profiler that estimates the energy consumption of the CPU, the network radio, and GPS sensors as well as showing the occurrence of different system events that may affect energy consumption. When developing iOS apps in XCode, a similar profiler can be used for debugging.

Newer application architectures – such as serverless computing or functions-as-a-service (FaaS) – enable even more control over capacity and, by extension, energy consumption.

Reusability of code: Reusing components of code and automating repetitive tasks can reduce the overall development time and, thereby, energy consumption. Reusable code components also come with the added advantage of being defect-free. This can shorten the application testing time and fix defects in the production environment, which, in turn, will have a net-positive environmental impact.

The emergence of a multitude of low-code/no-code platforms can further aid in this process. These platforms can deliver applications at ten times the speed compared to the traditional software development approach, which implies a direct 90 percent reduction in energy consumption per application development.

When combined with AI-assisted development, this can further the scope of reducing the global carbon footprint of applications. We expect that using AI for applications has the potential to boost global GDP by around 3-5% while also reducing the global greenhouse gas emissions by around 2-4% by 2030 relative to business-as-usual. Microsoft’s recent announcement introducing GitHub Copilot, which aims to make AI-assisted development the new norm, is a big stride in that direction.

Future outlook

As we gear up for an eco-friendly tomorrow, green software development is emerging as the next logical step for technology providers, software integrators, and other players in the value chain.

We can expect CIOs to push for more optimized energy consumption in their organizations. From an application development perspective, this can be realized through the ideal use of location services, timers, and notifications – optimizing media and images, and reducing the amount of data being transferred between the server and the app. It also will require enterprises to relook at gathering requirements and documenting design from a green development lens.

More research will be needed to measure the real-time carbon footprint at the code level. As a result, the definition of full-stack development will evolve from its current focus on website and database development to involve managing user behavior on how electricity is bought and sold on a grid in the future.

Going forward, participation from more and more enterprises in this green mission of building a sustainable future seems inevitable and essential.

In our next blog in this series, we will share a checklist enabling enterprises to adopt a greener approach to application modernization and maintenance, ensure green governance, and achieve a green quality index for applications.

To share your thoughts and discuss our research related to green software development, please reach out to [email protected] and [email protected]

Choosing the Right Partners in the Expanding Environmental, Social, and Governance (ESG) Product Ecosystem | Blog

The ESG platform/product vendor ecosystem is expanding at an exponential rate, with banks increasingly collaborating with the larger network following the pandemic. Large banks such as Citibank have collaborated with Truvalue Labs to accelerate their ESG research initiatives. Similarly, in the UK, Lloyds Banking Group has partnered with Sancroft to obtain insights and advice on the best ESG practices. US-based specialist asset manager Trillium Asset Management has collaborated with Trucost to conduct a carbon analysis of its sustainable opportunities strategy.

In our previous blog on ESG, we highlighted that – while the ESG ecosystem is evolving within the Banking and Financial Services (BFS) industry – firms fail to recognize its potential to generate long-term risk-adjusted returns. In this blog, we explain the evolution of the ESG product and platform vendor landscape. These products are helping BFS firms think and act on ESG proactively and tap into several opportunities that the ecosystem offers.

Decoding the ESG vendor landscape

In response to the demand for robust ESG integration, vendors are offering various products and services, ranging from raw data and reports across multiple ESG areas to extremely sophisticated analytics platforms. The focus areas for these firms include stock screening, portfolio construction and analysis, competitive benchmarking, risk management, green bond framework evaluation, second party opinions, scenario analysis, controversy analysis, ratings, and rankings.

The ESG vendor landscape itself can be broadly divided into three categories: data and data analytics providers, technology providers, and ESG advisory firms.

Data and data analytics providers use unique ways of sourcing, categorizing, and quantifying ESG data before building an analytics layer over it. Based on coverage, these providers can be further categorized as ESG market data providers, ESG exclusives, and ESG specialists.

  • Global and well-established financial market data providers now offer ESG data as well. Some of them even consider ESG factors when determining financial ratings.
  • ESG exclusives provide comprehensive ESG data solutions covering majority of asset classes. They extract data from multiple public sources and/or company interviews and apply subjective analysis using diverse ESG metrics to create a comprehensive solution.
  • ESG specialists cover specific ESG factors such as gender equality at companies or the company’s impact on climate and the environment.

Consulting and advisory firms assist financial services firms and other enterprises in building data and governance frameworks, integrating ESG, and facilitating their regulatory reporting strategies. In fact, taking note of ESG’s growing importance, firms such as esg.solutions, NEPC, Sancroft, Callan, State Street, Clearbrook, Goby, ASC Advisors, KKS Advisors, Canterbury Consulting, and Mercer have introduced ESG consulting as a separate arm within their consulting practices. We believe that the ability to highlight ESG issues that affect financial performance will be a differentiating factor in this arena.

The exhibit below showcases the vast and expanding ESG vendor landscape today.

Exhibit: Understanding the ESG vendor landscape

ESG Vendor Landscape

With such an expansive and thriving market for ESG services, it may be difficult for leaders to choose the best-fit vendors.

Selecting the right vendors and ecosystem mix will make a difference

Some characteristics that will help financial institutions distinguish among data and analytics vendors are market coverage, quality and quantity of ESG indicators, investments covered, methodology, sources, support to standard frameworks, and company involvement.

Also, market intermediaries such as stock exchanges, rating agencies, reporting and regulatory bodies, index providers, and ETF providers play an equally important role in developing the right ESG ecosystem. Hence, BFSI firms need to collaborate with the right mix of data, regulatory frameworks, and technologies. It is complicated, but ultimately provides a lucrative opportunity to IT service providers to offer innovative ESG products and solutions and provide custom-built solutions on partner products tailored to banks’ specific needs. This will ease the transition and change management process for banks and financial institutions. A few service providers, consulting leaders, and boutique consulting players have already created frameworks and solutions to help banks with their ESG needs.

We are confident that over the next decade, ESG will not be discussed as a standalone or secondary strategy but will be a mainstream financial services proposition, creating sustainable long-term value, not only for investors and BFSI enterprises but for the entire ecosystem.

If you would like to understand how a platform-centric approach can fast-track your ESG journey, reach out to [email protected], [email protected], or  [email protected].

We also invite ESG data and analytics providers, IT service providers, and consulting firms to reach out to us to get featured in our upcoming research assessing ESG vendors that serve BFSI enterprises. Please refer our Research Participation Guide to understand the scope, objectives, and participation process of the research.

This is the second blog in this series that explores the ESG space; read the first and third blogs for further insights.

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