Tag: ESG and Sustainability

The Impact of Impact: Effectively Measuring Impact Workers’ Metrics | LinkedIn Live

LINKEDIN LIVE

The Impact of Impact: Effectively Measuring Impact Workers’ Metrics

View the event on LinkedIn, which was delivered live on Thursday, June 8, 2023.

Organizations’ methods of tracking performance metrics of impact workers vary across the board. 📊 Impact measurement can be a powerful tool to inform program creation, assess effectiveness, and drive decision-making. 💡 But when it comes to the measurement of impact workers’ metrics, what is the most effective approach, and how do you use the data for better business outcomes? 🤔

In this LinkedIn Live session, we will explore one of the key aspects of impact sourcing – impact measurement – and the need to track metrics effectively for better business case creation. 🔎

Watch to learn more about this important topic and to gain valuable insights into how to effectively measure the impact of impact sourcing initiatives. 🌟

What questions did the event address?

  • Market standards and general recommendations 📈
  • Key approaches followed by organizations 🤝
  • Learnings from best-in-class peers 🏆
  • Pitfalls to avoid and best practices to follow ⚠️💡

Meet The Presenters

Measuring the Impact of Impact Sourcing | Virtual Roundtable

Virtual Roundtable

Measuring the Impact of Impact Sourcing

May 24, 2023 |
9 AM EDT | 7:30 PM IST

In this forum, Rita will explore one of the key aspects of impact sourcing – impact measurement – and the need to track metrics effectively for strong business case creation. Organizations’ methods of tracking performance metrics of impact workers vary across the board, but what is the most effective approach, and how do you use the data for better business outcomes?

Join this virtual roundtable to discuss impact measurement and share key approaches, learnings, and best practices.

We’ll uncover the key aspects of impact measurement, including:

  • Market standards and general recommendations
  • Key approaches followed by organizations
  • Learnings from best-in-class peers
  • Pitfalls to avoid and best practices to follow

Who should attend?

  • ESG and sustainability leaders
  • Chief diversity officers
  • Sustainability leaders
  • Corporate social responsibility leaders
  • Workforce and talent strategy leaders
  • CHROs and heads of HR
  • Heads of outsourcing
  • Global sourcing managers
  • Service providers

Virtual Roundtable Guidelines

The only price of admission is participation. Attendees should be prepared to share their experiences and be willing to engage in discourse.

Participation is limited to enterprise leaders (no service providers). Everest Group will approve each attendance request to ensure an appropriate group size and mix of participants. The sessions are 90 minutes in duration and include introductions, a short presentation, and a facilitated discussion.

Soni Rita B
Rita Soni
Principal Analyst, Impact Sourcing & Sustainability Research
Paul Steenkamp
Paul Steenkamp
Founder at Jack Frost
Marzanne Collins 1
Marzanne Collins
Executive Advisor at Harambee Youth Employment Accelerator
Evan Jones
Evan Jones
Group Strategy Director at Harambee Youth Employment Accelerator

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

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 | In the News

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.

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.

Read more in Intelligent Sourcing.

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

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.

Pic with Legends

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? 

Storage Vendors Look To Make Case for Sustainability | In the News

Energy costs are rising, and sustainability is all the rage. But storage vendors may struggle to convince customers to combat climate change during an economic downturn.

As one of the main elements of IT, storage often sits on the sidelines; that is its purpose. But it also uses a disproportionate amount of power. “[Vendors must] ensure that the technology is efficient [and] decreases overall power consumption while increasing performance and capacity,” says Mukesh Ranjan, a Vice President and analyst at Everest Group.

Read more in TechTarget.

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

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/

 

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

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.

Picture1 5

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.

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

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

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.

Picture1 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.

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

"*" indicates required fields

Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.