Neo Group recently published a detailed study of ESG adoption (Environmental, Social, and Governance) across a select group of BPO and IT providers. This is an important report for the sourcing industry because right now there is no holistic view of which providers are really adopting ESG and which are just greenwashing through their website and annual report.
Neo Group undertook this research because we are often asked by clients if a specific provider is genuinely undertaking the ESG strategy they have publicly announced. These are the insights that you might expect from a trusted advisor, but to date nobody had looked across the entire industry and documented exactly who is doing what – and are they really doing what they say they are doing? Our team felt that it was time to find out what is really going on.
ESG is more important than ever, particularly when selecting a supplier for IT services or a BPO function such as customer service. Companies are frequently being ESG rated based on their own supply chain, so executives need to think carefully about who they work with because it can affect their own rating.
For this reason, every company in the outsourcing community should be thinking of their own ESG rating. It is already a component in how clients are selecting a partner. This will become increasingly true as more companies focus on improving their own ESG rating and therefore reviewing who they are trusting with their own critical services through outsourcing.
ESG is also becoming more important for investors. Companies seeking to attract investors need to demonstrate that they have a robust ESG strategy that also includes their suppliers. Likewise, employees are looking at their own employer and asking what value their company offers to society – if any.
If you want to attract the best talent, investment, and customers then ESG is becoming an important area of focus. Some of the most frequent questions our advisors have been asked include:
• What is the scope and scale of major global ITBSPs’ ESG programs? Is it broad and deep or merely cosmetic?
• How seriously are they taking it? Are they genuinely committed, or do they see it as a necessary evil for the sake of good PR?
• What competencies have they built around ESG? Have they created offerings that could support our own ESG initiatives?
• They say what they do, but do they do what they say? Or is it all just some kind of “green-washing”?
• Has ESG changed their approach to doing business? Is it a fundamental transformation or are they just managing optics?
Importantly, we adopted both a quantitative and qualitative approach to our research. Instead of just asking the companies selected for the survey to respond on their ESG strategy we also scored them by the way they interacted with us on this subject. Did they have answers immediately available and engage willingly or did our team feel like they were dragging information from the service provider?
This offers an added dimension to our survey – not just reporting what each company says they are doing, but how they behave when questioned about ESG. Our team believes that this added dimension is critically important in demonstrating who is really engaged in a cultural shift and who is just checking boxes to say that they are building a strong ESG strategy.
To obtain a copy of the complete survey of ESG adoption in IT and business service provider organizations, please click here.
We would be happy to answer any questions about the creation of the survey and the methodology used. Please write to us here or get in touch via LinkedIn.
CC photo by Karsten Wuerth