Article: Metrics, goals, and challenges: Hexaware's approach to sustainability

Employee Engagement

Metrics, goals, and challenges: Hexaware's approach to sustainability

Hexaware's ESG Chief, Uma Thomas, reveals their sustainability plan including how they integrate it across operations and navigate challenges like supplier engagement and cost management.
Metrics, goals, and challenges: Hexaware's approach to sustainability

Sustainability is no longer just a moral obligation, but a strategic imperative for long-term business success and competitiveness. Mumbai-based Indian IT consulting company  Hexaware Technologies has set an ambitious goal of achieving net-zero emissions by 2040. However, this path is riddled with roadblocks like stringent reduction targets, supplier engagement hurdles, and financial investments required. The tech firm with over 30,000 employees and 50 offices worldwide has been recognised recently as the Sustainable Organisation of the Year 2024 at the Net Zero Summit and Awards 2024.

To delve deeper into Hexaware's journey, we spoke with Uma Thomas, Chief Risk Officer and Global Head of ESG. Thomas unveils their sustainability plan, discusses the biggest challenges they face on the road to net-zero, and explores how they plan to overcome them.

Here are the edited excerpts. 

Sustainability is often framed as a moral obligation. How do you view its centrality to Hexaware's long-term business strategy, competitiveness, and how does the company assess the tangible impact of its initiatives? 

Our sustainability philosophy revolves around people, planet, and profit. Therefore, we have integrated sustainability into every possible aspect of our operations, striving to create long-term value for all stakeholders. 

We blend sustainability principles from the design stage itself, thus leading the product/process/service toward sustainable outcomes.

Metrics are defined at the organizational level, and we have KPIs at the functional level. Organizationally, we have set goals for emissions, waste, water, diversity, information security, and data privacy, among others. We have a three-level governance structure to review the actuals against the targets and take timely corrective action if required.

How have you integrated sustainability-related risks (environmental, social, reputational) into the company's broader risk management framework? How do you communicate complex sustainability risks and mitigation strategies to build investor trust? 

Hexaware benefits significantly from the guidance of our major investor, who has a structured ESG programme in place, keeping us aligned with the latest ESG trends.

Our risk management framework adheres to global best practices such as ISO 31000 and COSO ERM 2017. Hexaware is certified for ISO 14001 Environment Management System, ISO 50001 Energy Management System, ISO 27001 Information Security Standard, and ISO 22301 Business Continuity Standard. These certifications help us effectively manage and integrate risks based on our materiality assessment into the company’s broader risk management framework.

We have conducted a climate risk assessment based on the TCFD framework to assess the physical and transition risks. This assessment has been an essential step in helping us identify and map the impacts of climate change on our business, as well as determining necessary mitigation steps. 

The top enterprise risks are reviewed at the board level and communicated in our annual report along with the mitigation strategies. Our annual report includes a dedicated section on risk management, detailing our framework and initiatives taken.

We communicate our risk management aspects through various channels, including the TCFD report, annual report, and sustainability report, and by publishing this information on our website.

Net Zero by 2040 is a bold target. What are the biggest hurdles Hexaware anticipates on this path, and how do you plan to overcome them?

Achieving net-zero emissions by 2040 is a commendable yet challenging goal for Hexaware. But, as we embark on this journey, several potential roadblocks could impact our progress: 

Reduction percentages are stringent. Though we have planned various initiatives to improve energy efficiency, the absolute reduction expected for scope 1 and scope 2 is difficult to achieve if the company is growing and employees return to the office. Balancing growth with these ambitious emission targets requires innovative solutions.

Implementing decarbonisation activities in upstream leased assets, where the company has no operational control, presents unique challenges.

Also, decarbonisation of emissions due to upstream activities of fuel and electricity is out of the operational boundary of the organization (for example, for electricity generation, extraction and refining of fuel, etc.). We plan to reduce this by increasing the use of renewable energy.

Engagement with suppliers is also crucial; we expect our suppliers to measure and track their emissions Recognizing the challenges faced by smaller suppliers, we conduct regular ESG training sessions to enhance their awareness and capabilities.

The financial investment for these initiatives is significant, requiring careful planning to balance immediate improvements with our long-term goals.

Embedding sustainability requires a shift across the organisation. How do you foster a mindset where sustainability is seen as everyone's responsibility? How does Hexaware build a widespread culture of environmental consciousness beyond top-level initiatives?  

We integrate ESG training into the induction process for new hires, ensuring they understand our sustainability goals from the start. For existing employees, ESG training and assessments are mandatory and integrated into our learning management system. We also provide periodic ESG awareness training for our suppliers to extend this mindset throughout our supply chain.

To keep sustainability at the forefront, we send out periodic mailers/snippets on a variety of ESG topics. We advocate for reducing waste through the principles of the circular economy, emphasizing the reuse and recycling of resources within our operations.  

Our employees are our greatest strength in these efforts. Last year, 10,000+ Hexaware employees participated in various CSR initiatives.  

How does Hexaware balance the necessary investments with maintaining healthy financial performance? 

Based on our short-term and long-term SBTi targets, we have identified appropriate initiatives and secured the necessary budgetary approvals. Thanks to proper planning, we have not faced situations where trade-offs were necessary. For example, in 2018 we had 530 KW solar capacity and have gradually expanded it over the years to reach 1.84 MW in 2023.

Can you give specific examples of how Hexaware's sustainability goals are driving innovation and shaping new services for your clients?

Our commitment to sustainability is a key driver of innovation. For instance, we leverage cutting-edge technology and data insights to empower clients on their own net-zero journeys. Our ESG platform, built on AWS, combines advanced data science with financial expertise to redefine payment security with sustainability in mind.

We're also developing new services like our Gen AI solutions, which use sustainable principles to propel clients towards net-zero goals. These AI solutions deliver high-precision knowledge systems and executive assistance.

Our ESG Integration service helps clients align their activities with environmental, social, and governance best practices. We provide expert guidance and ensure compliance with global ESG standards.  

Essentially, our sustainability focus fuels innovation across our service offerings, from cloud migration (Amaze platform) to decarbonization strategies (Net Zero transition service) – all designed to empower clients on their own sustainability paths. 

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Topics: Employee Engagement, #ESG, #BusinessTransformation

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