Indian IT and business process management (BPM) firms are creating environmental, social and governance (ESG)-specific analytics and tools as clients mount greater scrutiny on compliance with mandated sustainability goals.

Rekha Menon, chairperson, Accenture India stated that client conversations around ESG initiatives are shifting rapidly and is much more of a priority now, for Indian clients as well, than it was last year.

“Accenture sees a lot of demand for solutions related to ESG. Whether it is to report their ESG metrics, change in governance models or operating models to align to ESG goals or even to identify business opportunities in this space in terms of sustainable products and services,” she added.

In fact, a study by Accenture found that between 2013 and 2020, companies with consistently high ESG performance tended to score 2.6x higher on total shareholder return (TSR) than medium performers.

Mumbai-based WNS and Pune-based Tech Mahindra have recently announced their progress in the new domain as both global organisations such as the United Nations (UN), and local market regulators such as Securities and Exchange Board of India (SEBI), are increasingly making ESG compliances mandatory.

“One of the service lines that we are creating is based on ESG analytics powered by artificial intelligence,” said Akhilesh Ayer, executive vice president and head, WNS Triange– research, data, analytics and AI business unit of the company. These solutions were launched at the beginning of 2023.

“A multinational firm buys hundreds of things like office space, buildings, servers, materials and transportation from vendors, of which everything leaves an environmental footprint. There are UN standards on how you measure the environmental footprint residue on each of these categories–there are 4,000 such categories,” said Ayer. The WNS model picks up the multinational’s internal system data from ERP and maps it with the global environment standards and tells them what is the delta (progress) they have on each of those categories and how they should proceed further, Ayer said on the sidelines of Nasscom Technology and Leadership Forum 2023.

During its annual analyst day last week, the Tech Mahindra management said that climate change has now become a part of boardroom discussions of many corporations as organizations have become aware of the financial consequences of bad ESG practices.

ESG-focused services, which were launched by the Pune-based firm in September, have already resulted in a few deal wins, and a platform for sustainable financing is currently under development. “The company believes that in the next 2-3 years, ESG will become as big a growth driver as digital is today and hence is developing capabilities on both platform and services front,” brokerage IDBI Capital’s report said quoting the company.

Global tech giant Microsoft also said that it is working with non-profit organisations and external agencies on environmental problems such as predicting heat waves and cyclones in India using artificial intelligence.

“As a technology company, we don’t pretend to understand problems in every domain. Our job is to bring technology to the people who understand the problem,” said Rohini Srivathsa, national technology officer at Microsoft India during the Nasscom summit.

The company is working with an NGO called SEEDS where AI was able to help with the data and the right algorithms to predict when a cyclone or hurricane might be expected in flood prone areas in states like Odisha while also working in Delhi with respect to their heat waves, where particular areas are colour coded based on their risk level using data sciences.

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