nasscom: Focus on ESG will help boost growth of Indian tech companies: report

Pune: India’s tech and service companies will see their business grow thanks to growing investments by global companies in improving their environmental, social and governance (ESG) goals, new research from IT industry body Nasscom finds .

In line with what’s happening globally, India is also witnessing an increasing focus on ESG. ESG-themed funds assets under management (AUM) reached $ 650 million in FY21, up from $ 275 million in FY20, a 2.5-fold increase. The report, “The Next Big Leap” to ESG Maturity in the Tech Industry, said that over time ESG could become a key differentiator in large tech transactions.

The opportunity is huge, said Sangeeta Gupta, senior vice president and chief strategy officer, Nasscom. “Some will be built into hardware or products, and some will be in services and solutions, and that’s where you already see companies looking to invest and develop practices in this area,” a- she declared.

In addition, the adoption of ESG initiatives by technology companies was driven by certain external factors. Several large global companies require their suppliers to adopt certain ESG goals if they are to defend their business. There is a clear business imperative for companies to invest in ESG, Gupta said. In addition, investors are also asking startups to define an ESG strategy, which also prompts them to focus more on their adoption as part of their larger strategy.

Gupta said that while large companies already have clearly defined goals and an ESG roadmap in place, she will work with smaller companies to help them integrate them into their strategic priorities and begin the journey towards its internal adoption. , as well as creating solutions for customers. . Along with sharing best practices, she added that it was important to understand which practices would be relevant to the company, based on its size and business priorities.

Nasscom is also working on creating appropriate metrics for the Indian market and how it can present these initiatives to make them a clear differentiator for the Indian tech industry. Some areas that companies are currently focusing on include carbon footprint and green technologies, diversity and inclusion, and skills and business ethics and compliance, and risk and crisis management.

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