According to EY, 52% of GCCs in India are Embracing ESG Agenda

EY India’s inaugural ‘ESG GCC Report 2024’ brings to light the pivotal role played by Global Capability Centres (GCCs) in advancing the Environment, Social, and Governance (ESG) agenda for global entities. The report indicates that approximately 52% of GCCs in India are actively embracing the ESG agenda, with around 70% of them focusing on technological advancements for ESG implementation. Drawing insights from over 45+ GCCs, the report endeavors to unearth key trends shaping the integration of ESG capabilities within these centers.

According to the report, GCCs are establishing specialized teams to collaborate with global organizations on ESG initiatives, with major support areas revolving around process enhancement, data management, and technological advancement. Around 67% of GCCs are in the process of formulating internal sustainability strategies to bolster their ESG performance. They are infusing ESG principles across various functions including project management, supplier risk assessment, reporting, technology, and analytics for their global counterparts.

Arindam Sen, Partner and GCC Sector Leader – Technology, Media & Telecommunications, EY India, comments on the report, stating, “As we stand on the threshold of a new era defined by sustainability, we witness GCCs ascending the value chain. With a steadfast commitment to ESG priorities, GCCs possess the potential to instigate transformative change and establish sustainable practices.”

The report underscores the pressing need for global companies to adhere to ESG regulations set forth by regulatory bodies such as the Corporate Social Responsibility Directive (CSRD) in the EU and Climate Change Disclosure Rules in the US. This necessitates the reporting of a broader array of ESG metrics with heightened accuracy.

Chaitanya Kalia, Partner and Leader, Climate Change and Sustainability Services (CCaSS), EY India, observes, “The proactive adoption of the ESG agenda by over half of India’s GCCs signals a significant shift towards sustainable innovation and responsible growth. This underscores their dedication and anticipates a future where GCCs lead in ESG excellence, redefining their roles in addressing global challenges towards a sustainable future.”

Key Takeaways from the Report:

• GCCs are at the forefront of anchoring ESG capabilities, overseeing critical functions such as reporting, risk management, technology development, and implementation, among others. Nearly half of the GCCs, accounting for around 48%, actively engage in sustainability reporting, project management, and technical support.
• The facilitation of data and tech infrastructure plays a pivotal role in advancing the ESG agenda. Approximately 70% of GCCs are either partnering or intend to partner with technology-related support and data analytics to enhance ESG integration effectively.
• Robust processes and data governance protocols are indispensable for enhancing ESG data reporting. Integration of ESG data into existing processes such as vendor assessment and enterprise risk management is paramount. Currently, about 70% of GCCs are spearheading processes and controlling agendas.
• Navigating critical challenges is imperative for GCCs to successfully materialize ESG initiatives. These challenges include ambiguity in ownership, lack of global stakeholder buy-in, scarcity of in-house skill sets, and inadequate know-how. Formulating strategies to address these challenges will be pivotal for GCC’s ESG journey.

In conclusion, EY India’s ‘ESG GCC Report 2024’ illuminates the pivotal role of Global Capability Centres (GCCs) in spearheading Environment, Social, and Governance (ESG) initiatives for global entities. With over half of India’s GCCs actively embracing the ESG agenda, the report underscores a transformative shift towards sustainable innovation and responsible growth. As GCCs ascend the value chain with a steadfast commitment to ESG priorities, they hold the potential to instigate transformative change and establish sustainable practices. However, navigating challenges such as ambiguity in ownership and skill set scarcity will be crucial for GCCs to realize their full potential in advancing the ESG agenda and addressing global challenges towards a sustainable future.