"ESG Will Influence All Areas Of Business" Infosys Head - Green Initiatives, Bose Varghese
In an interaction with Urvi Shrivastav, editorial board member, BW Businessworld; Bose Varghese, Infosys Head - Green Initiatives, speaks about the growing need of businesses to take heed of ESG compliance, its financial and environmental necessity, and the proactive steps Infosys is taking in this direction.
Why is the issue of sustainability gaining more traction now than ever before?
In the larger context, it is perhaps the result of the realisation that our way of life on this planet is simply unsustainable. A global population of 7.9 billion people, and still growing, with its ever-increasing demand for food, space, and natural resources, the unhinged pollution of air, water, and soil, and the destruction of life-supporting ecosystems simply cannot go on for long without big consequences. Amid this existential despair, sustainability is a ray of hope.
From a business perspective, the lack of sustainability poses significant risks and the opportunity to do better. The risks and opportunities can have significant financial and social implications. Therefore, sustainability is increasingly being driven by investors, market forces, and regulators.
How has Infosys accelerated its plans in ESG since it has gained traction?
At Infosys, sustainability has been well-integrated into business for well over a decade. In 2011, we pledged to become carbon neutral by 2020. Since then, we accelerated our low-carbon transition through energy efficiency in our offices and data centers while increasing our uptake of renewable power. On the back of a successful environmental program, we built a robust social program and governance system. With equal focus on all three areas of ESG, our program evolved and matured. In the last few years, we have been rated high by several ESG rating agencies. In 2019, we won the UN Climate Action Award and, in 2020, we turned carbon neutral, 30 years ahead of the Paris Agreement timeline. We have been in the Dow Jones World Sustainability Index for the last 5 years. We are in the top league of A List in CDP Climate Change. Wall Street Journal ranks us at No.30 among the world’s most sustainable companies. CRISIL rated Infosys at No. 1 in ESG in India in 2021.
In 2020, we formed our ESG Committee of the Board and an ESG Council at the executive level. The same year, we announced our carbon neutrality. Today, ESG is deeply embedded in the organisation, with ESG responsibilities spread across departments and shared by employees as well as ESG experts.
Can you share some initiatives by Infosys in recent times?
Infosys has set ambitious goals for all three areas of ESG and has several key initiatives to drive them. Some of our most transformative initiatives center on carbon neutral program (renewables and carbon offset) and tech-for-good.
As a part of our carbon neutral program, we are in the pursuit of increasing our renewable power uptake. As of FY2020, we had invested in 60 MW of captive solar PV capacity. Currently, we are adding 10 MW of solar PV capacity in Pune through a Power Purchas Agreement (PPA). We are also exploring PPA in Bhubaneshwar. In smaller locations, we are actively pursuing renewable power procurement through power exchange. We are expanding the RE program to our overseas (mostly leased) offices.
Under our community-based carbon offset program, we have launched several large rural projects in the last year. These projects, spread across Karnataka, Maharashtra, Odisha, Rajasthan, and Meghalaya, will directly benefit over 230,000 rural households through clean cooking interventions.
We committed to reach 80+ million people through tech for good programs in e-governance, healthcare, and education by 2025. An example of our effort is Infosys Springboard, a global digital learning platform with free content that is accessible online. Infosys Springboard has been deployed across
India, Australia/New Zealand, the UK, Europe, and the United States. This free learning platform has already clocked 2.5 million registrations. In India, we are closely working with the State Governments of Karnataka, Maharashtra and Uttar Pradesh and many institutions to expand the reach of this program.
What are the plans ahead in the ESG space?
In 2020, as Infosys turned carbon neutral, it set some ambitious goals under its ESG Vision 2030. Our environmental goals include staying carbon neutral, reducing our Scope 1+2 and 3 emissions by 75% and 30%, respectively, recycling 100% of used water, and zero waste to landfill. Apart from the goals announced in the ESG Vision 2030, Infosys has taken a commitment to be Net Zero and set Science Based Targets for Scope 1+2 and Scope 3 emissions.
We will continue our carbon neutrality program based on energy efficiency, renewable energy, and carbon offsets. We will reduce energy demand by building/leasing new offices with best-in-class energy performance and retrofitting old buildings. We will absorb and promote newer technologies such as hybrid RE, energy storage, green hydrogen, and others as they become increasingly available and viable. For travel related emissions, our strategy will be to embrace all viable opportunities such as a hybrid working model (where certain percentage of employees work from home), a distributed office network (reducing employee travel distance), promoting EVs among employees, promoting carpooling, use of public transport, and low to zero emission modes of commute among employees, business travel optimization and supporting EV cabs for road travel. Our aim is to design Scope 3 emissions reduction programs leveraging the Internal Carbon Price that we have already set and announced.
Our social commitments for 2030 include 45% women in workforce, enabling digital skills to over 10 million people, energizing local communities through flexible work options, empowering over 80 million people with tech-for-good programs, and facilitating best-in-class employee wellness. Our governance ambitions include a diverse and empowered board driving compliance, integrity, and transparency. We are also committed to leading data privacy standards and industry leadership in information security practices.
How will ESG impact business decisions in corporates going forward?
Businesses and business decisions will be increasingly influenced by ESG going forward, both by its inherent implications to organizations and the market and the need to comply with regulatory forces that demand ESG action. In fact, ESG will influence all areas of business. Investment decisions will increasingly be hinging on ESG, especially climate change considerations. This will encompass M&A activities, equity and debt, and fund manager portfolios. The global supply chain ecosystem will be heavily influenced by ESG, with procurement of goods and services driven by climate change and other ESG parameters. In fact, navigating the strong ESG currents is critical to the survival and success of any business.
What will the ESG trends be in FY 2022-23?
During the last two years, we witnessed a big spike in global commitment for climate action through Net Zero as well as science based targets. In the near term, we can expect some early planning from companies and nations on these commitments. However, these commitments have generated significant momentum in supply chain decarbonization. This is expected to run as a key trend for some time to come. We are also likely to see a unified ESG reporting framework from the international Sustainability Standards Board (ISSB) set up by the IFRS Foundation, marking the beginning of bringing the much-needed comparability to ESG disclosures, ratings, and scores. In this respect, we are also likely to see the regulatory regime taking hold of ESG disclosures and, eventually, ESG performance. On the social side, access to tech, bridging the tech divide, data protection/privacy, and information security are areas that are likely to garner attention. We are already seeing examples of shareholders holding company directors responsible for ESG actions; that is likely to accelerate.
