Tag: ESG

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.

Outsourcing Services Pricing: What to Expect Next | Webinar

ON-DEMAND WEBINAR

Outsourcing Services Pricing: What to Expect Next

2022 has proven to be a constantly shifting and unpredictable year for outsourcing services. The first half witnessed an unprecedented demand surge accompanied by cost and price inflation, and the second half saw a slowdown in client decision-making with fears of a recession.

In this webinar, Everest Group’s pricing experts will analyze the trends observed this year and deliver the pricing outlook for IT and BPO services in 2023.

Our speakers will discuss:

  • How the outsourcing services demand has evolved in 2022
  • What the most successfully negotiated clauses have been in recent deals
  • How the pricing of IT and BPO services has changed
  • What the future outlook for pricing will be

Who should attend?

  • CIOs, CTOs, and CDOs
  • IT and BPO department leaders
  • SVMOs
  • CPOs
  • Strategic sourcing leaders
  • Category managers
  • Supplier management leaders
  • Vendor managers
Rahul Gehani Bio Picture V1 2021 03 26
Partner
Gupta Prateek Refresh gray square 1
Vice President
Sharma Abhishek Refresh gray square
Partner
Verma Kunal Refresh gray square
Practice Director

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

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

Read more in my blog on Forbes

Sustainability and the CIO’s Office: A Powerful Connection | LinkedIn Live

LINKEDIN LIVE

Sustainability and the CIO’s Office: A Powerful Connection

View the event on LinkedIn, which was delivered live on Thursday, November 1, 2022.

What did sustainability look like from the CIO’s office? Everest Group was honored to have Niklas Sundberg, SVP and CIO at ASSA ABLOY Global Solutions, joined us to answer this question ♻️.

Niklas is a leader in sustainable digital transformation and firmly believes in the diversity of people and the power of technology to positively change the world. He also recently authored a book presenting sustainability and its connection to the CIO’s office.

As a CIO himself, Niklas provided valuable insight into building an optimal sustainability strategy for 2023 💻.

Our speakers explored:
✅ How should CIOs view the sustainability puzzle?
✅ How can the diversity of people and power of technology strengthen your sustainability strategy?
✅ What were the best tips to optimize your sustainability strategy for 2023?

Meet the Presenters

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.

Sustainable Moderation: The “Impact” of “Sourcing” on Trust & Safety | Webinar

ON-DEMAND WEBINAR

Sustainable Moderation: The “Impact” of “Sourcing” on Trust & Safety

To ensure Trust and Safety in content moderation, human moderators must sift through egregious and non-egregious content to make sure that online platforms remain safe and suitable for us.

With the demand for this skill skyrocketing, it is now imperative that organizations look to emerging geographies to source talent. Sustainable sourcing practices in content moderation have never been more vital to ensuring Trust and Safety.

Join this webinar to hear how sustainable sourcing can impact content moderation, the importance of monitoring the wellbeing of human moderators in content moderation, and how these fit into Environmental, Social, and Governance (ESG) priorities for companies.

The webinar will answer key questions, including:

  • Why is there a need to think about sustainability principles in content moderation? How will this improve trust and safety?
  • How do sustainable sourcing practices impact content moderation?
  • Why is moderator wellbeing important for ESG policies for organizations?

Who should attend?

  • Head of Trust & Safety
  • Head of content moderation
  • CHROs and heads of HR
  • Sustainability leaders
  • Head of outsourcing
  • Global sourcing managers
  • BPO leaders

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

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

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

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

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

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

  • The war has ramifications on global energy transition

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

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

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

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

  • Investment in defense is being reclassified as sustainable

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

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

  • Investors are steering away from autocratic states

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

How does the war impact sustainability enablement service providers?

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

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

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

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

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

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

 

Request a briefing with our experts to discuss the 2022 key issues presented in our 12 days of insights.

Request a briefing with our experts to discuss our 2022 key issues

How can we engage?

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

Contact Us

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