52% Of GGCs In India Are Actively Embracing ESG Agenda: EY India's 'ESG GCC Report 2024'

The Global Capability Centres (GCCs) in India are establishing dedicated teams to collaborate with global organizations for ESG initiatives, with major areas of support being in the enablement of processes, data and technology. 67% of GCCs indicate that they are in the process of establishing internal sustainability strategies aimed at enhancing their ESG performance. They are embedding ESG focus across capabilities such as project management, supplier risk management, reporting, technology, and analytics for their global entities.

Kolkata: EY India's inaugural ‘ESG GCC Report 2024’ reveals that Global Capability Centres (GCCs) are playing a pivotal role in advancing the Environment, Social and Governance (ESG) agenda for global entities. The report findings highlight that 52% of GCCs in India are actively embracing the ESG agenda, while 70% of these are advancing the tech agenda for ESG implementation. With insights gathered from over 45+ GCCs, the report aims to uncover pivotal trends shaping the integration of ESG capabilities within these centres.

The report highlights that GCCs are establishing dedicated teams to collaborate with global organizations for ESG initiatives, with major areas of support being in the enablement of processes, data and technology. 67% of GCCs indicate that they are in the process of establishing internal sustainability strategies aimed at enhancing their ESG performance. They are embedding ESG focus across capabilities such as project management, supplier risk management, reporting, technology, and analytics for their global entities.

Commenting on the report, Arindam Sen, Partner and GCC Sector Leader – Technology, Media & Telecommunications, EY India, said, “As we stand at the cusp of a new era defined by sustainability, we are witnessing GCCs take yet another step up the value chain. With a robust commitment to ESG priorities, GCCs have the potential to drive transformative change and establish sustainable practices.”

The report underlines that with global regulatory authorities prescribing ESG regulations, such as Corporate Social Responsibility Directive (CSRD) in the EU and Climate Change Disclosure Rules in the US, there is an immediate need for global companies to report on a broader set of ESG metrics and with greater accuracy.

Chaitanya Kalia, Partner and Leader, Climate Change and Sustainability Services (CCaSS), EY India,said, “Today, over half of India's GCCs are proactively adopting the ESG agenda, signalling a pivotal shift towards sustainable innovation and responsible growth. This highlights their commitment and foresees a future where GCCs lead ESG excellence, redefining their roles in addressing global challenges towards a sustainable future.”

Key Highlights:

ESG capabilities being anchored by GCCs

GCCs are housing the global ESG agenda by anchoring essential functions such as reporting, risk management, project management, technology development and implementation, vendor management, business process excellence and automation. Close to half of the GCCs, constituting ~48%, are actively involved in sustainability reporting, project management and technical support.

Data and tech infrastructure enablement is key

Advancing towards the ESG objective requires modifications to the IT infrastructure, data integration methodology, and reporting landscape. The report reveals that 70% ofGCCs are partnering/intend to partner with technology-related support and data analytics. This entails not only refining existing IT systems but also reimagining data integration methodologies to accommodate ESG considerations effectively.

Process enablement for enhanced ESG data reporting

Establishing robust processes and data governance protocols for collecting, aggregating, and reporting ESG data is crucial. The report emphasizes integration of ESG data into existing processes such as vendor assessment, enterprise risk management, and annual reporting. Currently, 70% GCCs are driving process and controls agenda. Aman Dutta, Partner, GCC Consulting, EY India says, “Given that GCCs already serve as anchors for global organizational processes, they are strategically positioned to identify the scope of ESG reporting, pinpoint process and control gaps, and formulate remediation strategies.”

Navigating critical challenges

The survey underscores four critical challenges that GCCs must address to successfully materialize ESG initiatives: ambiguity in ownership, lack of global stakeholder buy-in, scarcity of in-house skill sets, and inadequate know-how. Building strategies to overcome these challenges will be pivotal for GCCs' ESG journey.

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