As India races towards a record growth in renewable power, the corporate sector is pulling out its ambitious renewability plans to ensure that it does not just survive but thrives in this race. Take, for example, ZS, a global management consulting and technology firm, which is building a comprehensive plan to make its offices 100 per cent renewable. The organisation has made massive strides in this regard as well. In 2023 alone, 88 per cent of the company’s total electricity consumption came from renewable energy. ZS is also running active campaigns both within and outside the organisation to reduce the consumption of single-use plastic.
The firm also published its first ESG report in 2023, where it released its GHG emissions for 2019-2022, got SBTi validated near-term reduction targets, and defined its Net-zero year among other action points.
In this interview with TheCSRUniverse, Rohit Bhagwat, Global ESG Committee Member and Office Managing Principal, ZS discusses the firm’s focused strategy towards introducing complete renewability to their offices and how it is investing both finance and manpower towards achieving its sustainability goals.
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Q. Your RE Infrastructure program has an ambitious target of achieving 100% renewability in the next 2-3 years. Could you share a broad roadmap of the areas you intend to focus on under this program?
A. ZS has a Science Based Targets initiative (SBTi) validated near-term emissions reduction targets. This requires us to reduce Scope 1 and 2 GHG emissions by 48.8% by 2030 from a 2019 base year and to reduce Scope 3 GHG emissions by 55% per FTE within the same time frame. Electricity consumption accounts for ~84% of our total Scope 1 and 2 emissions. To meet Scope 1 and 2 reduction targets, all ZS offices globally are required to run on 100% renewable energy (RE) by 2030. In addition, some of our clients have stringent demands of availing services from only those offices that are RE-powered. To meet both reduction targets and client demands, we have been continuously exploring different options to increase the proportion of RE across all our offices worldwide.
We have made significant progress until now. In 2023, of our total electricity consumption worldwide, 88% came from renewable energy through a combination of REC purchase (45%) and RE supply from the grid (43%). Most of our offices worldwide operate on leased spaces and are currently bound by long-term lease agreements, which results in a significant portion of procuring RE through RECs – an offset strategy that adds to the cost of our operations. However, in the long term, we would want to lease spaces which are already powered by RE. To do so, we have added a mandatory clause in our lease renewal agreements that the building must be powered by green electricity.
In India, both Pune offices run on 100% renewable energy through the purchase of RECs from MSEDCL. Our Bengaluru office is housed in a building which sources 70% of electricity from renewable energy. The strategy is underway to run our Gurugram, Noida and Chennai offices on 100% renewable energy too.
Q: Since the program started in 2023, could you share some highlights of the progress you have made over the year and what the progress could mean for the overall program?
A: Some of our key achievements and initiatives include:
- Renewable energy: Both Pune offices now run on 100% renewable energy through the purchase of RECs. Additionally, we conducted a 4-month long due diligence to explore various mechanisms to avail RE and identify high-potential RE partners who, in the long term, could make ZS India offices run on RE through best-in-class mechanisms, beyond just the purchase of RECs.
- Waste handling: We recently received the ‘Sustainability Champion’ award from the MSME Chamber of Commerce and Industry of India for responsibly disposing of 6,779 kgs of e-waste for 2022-23. In addition, in 2023, Pune offices recycled 110 kgs of plastic waste and 90 kgs of sanitary pads, converted those into end-use items and donated them through CSR partners.
- Novel initiatives: Launched an India-wide campaign called “Freedom from Single-use Plastic (SUP)”, asking ZSers to take a pledge to minimise the usage of SUPs in both personal and professional spheres. Within a few months of the launch, we eradicated 1315 kgs of SUPs by limiting the usage of plastic water bottles from big office-wide celebratory events such as annual parties, leadership meetings, etc. Efforts are also underway to replace plastic ID card holders for all ZSers in India with a more sustainable option such as those made of recycled PET bottles, cork material, etc.
In a recently held leadership meeting in Goa, we adopted a sustainability lens by issuing digital invites and gratitude notes, used glass and wood as alternatives for plastic, said no to diaries, pens or printed collaterals, used eco-friendly cloth for branding, made fuel-efficient transport arrangement and effective repurposing of food waste.
Q. Many organisations in India have moved or are moving towards full electric-car fleets to reduce their carbon footprint. Where does ZS stand in this aspect?
A. Our SBTi near-term reduction targets require India offices to electrify 100% of their employee taxi fleet by 2030. Employee commuting is the third largest source of emissions for ZS (~15% in the base year). India offices have devised a roadmap to meet the 100% taxi electrification target by 2030. Our current EV taxi fleet percentage of the total fleet in New Delhi and Pune offices is 9% and 7.1%, respectively. We are closely monitoring the development of supporting EV charging station infrastructure and central/ state government policies, and plan to ramp up our EV fleet accordingly.
Additionally, we are working towards improving employee behaviour by encouraging employees to be more thoughtful while availing the transport facility (e.g., minimising last-minute cancellations). This will help us optimise our taxi fleet numbers and reduce emissions emanating from employee commutes.
Q. When did ZS as an organisation start its ESG reporting agenda? How has it impacted the company’s overall agenda?
A. Till 2021 and the first half of 2022, we had many dedicated groups like Women@ZS, Green Teams, People and Culture Team (PACT), and Diversity, Equity and Inclusion (DEI) already running ESG-related initiatives. In 2022, we formalised ESG across the organisation, set up a global ESG team, identified ESG focus areas, measured the 2019 GHG baseline using GHG protocol, and assessed disclosure and reporting strategy for reputed platforms like CDP and EcoVadis. Since then, we have come a long way. In 2023, we published the first ESG report, calculated GHG emissions for 2019-2022, got SBTi validated near-term reduction targets, defined Net-zero year, and improved Eco Vadis rating from bronze to silver and CDP ratings from C to B.All of this is a testament to our commitment and efforts towards ESG.
Our ESG strategy has been defined around our core values and defined material issues that matter to our business, stakeholders and vision of improving health outcomes for all. It is with this strategy that we aim to achieve three goals: Advance health equity, empower our people to make an impact and operate sustainably and responsibly. We believe that the future of health should be competent, compassionate, fair and accessible to all. Having a clear plan for addressing the biggest environmental, social and governance issues of the day is a critical contributor to that future – and something that we take seriously.
Q. Globally, organisations are taking more interest in DEI. What are ZS’s action points towards DEI?
A. In 2019, we established a gender parity objective, referred to as "Commitment 0," initiating our journey toward DEI. Since then, we have tackled our actions through the following commitments and activities:
- Our Diversity Commitment: We are committed to shaping our workforce to mirror the stakeholders we engage with and the communities we operate in
- Our Inclusion & Belonging Commitment: We aim to foster a culture of belonging at ZS, ensuring every member feels valued and respected while embedding equity into our principles and operations
- Our Equality Commitment: Equity isn’t in competition with equality; rather, it's one means to achieve equality. At ZS, we prioritise equity to ensure every ZSer has an equal chance to excel and shape the innovations we deliver to clients
Each commitment aligns with specific actions and initiatives we invest in for all or targeted ZSers. For example, we integrate equity into our operational standards and business practices. We leverage industry data to refine our recruitment strategies, introducing the Ideal Hiring Process in 2021 to promote fairness and inclusivity. Third-party assessments of people processes, such as pay, performance, and more, help uncover biases and enhance future processes to be fully bias-mitigated, objective, and most effective for managing and motivating talent. We collaborate continuously with internal groups, leaders, broad feedback channels, and external partners to scrutinize our practices – striving for a more diverse workforce that creates a sense of belonging and ultimately makes an impact we can measureand our employees can feel.
We also understand the differences that exist across regions and the subsequent need for differential efforts to realize our DEI commitments. Our representation of women principals and associate principals in India is lower than in other regions. And with many of our women colleagues in India being first-generation workers, we reckon that they need extra support. We have devised a program called Path to Principal that helps accelerate the growth of women in India who are tenured managers to senior leadership roles.
Q. There is some apprehension in the market that an ESG-focused agenda may require a company to compromise on profits. How true is this?
A: ESG is imperative for business! Our clients are some of the most impressive technology and pharma companies in the world. They have very clearly recognized the link between human and planet health and expect us to rise to their standard. “If we don’t do this, they wouldn’t want to partner with us”.
Beyond client requirements, ESG is integrated into our core strategy. Our organisation’s vision is to improve health outcomes for all. Everything we focus on in ESG – health equity, climate impact, diversity, equity and inclusion, data security and privacy, ethics and transparency – are what will drive us toward improving health outcomes for all. Without safe, responsible and secure practices, we can’t earn the trust of our clients who propel life-changing solutions. Without sustainable operations, we can’t improve climate change – a social driver of health. Without a workplace culture that sees, hears, understands and includes its people in decision-making and diversifies its employee base, we can’t innovate in new and profound ways.
Q. Have you collaborated with external partnerships for the RE Infrastructure project? Could you share the kinds of partnerships you are looking at?
A. Our clients have not only put forth stringent ESG requirements for us to meet, but they have also helped and guided us immensely in making initial yet significant progress. Currently, we purchase RE from Schneider Electric’s Energize program, a collaboration between 12 global pharmaceutical companies, to engage hundreds of their suppliers and accelerate RE adoption in pharmaceutical supply chains.
We have also explored additional options to procure renewable electricity beyond Schneider's program. For India offices, we did a four-month-long due diligence to identify high-potential private RE partners who could make our offices run on green electricity. We have offices in five states. Each state has a different RE policy and our office size varies by state. Both these dynamics determine the kind of ways our offices can procure RE. E.g., the Maharashtra government has a favourable Open Access policy, allowing private RE players to supply green power directly to industrial consumers. This puts our Pune offices in an advantageous position for availing a better RE solution.
For now, our partnership is short-term with Schneider, making purchases of RECs every year. Our strategy for the long term has been devised too. We know which office should procure RE by which mechanism in the future. However, we will wait for 2-3 years before acting on it. We still want the RE industry to become more mature and support from government across states to widen. Once that happens, we would want to get into a long-term PPA agreement with private RE developers because of advantages such as cost savings and a hedge against price fluctuations.
Q. Apart from the RE Infrastructure project, could you highlight some other programs that ZS has undertaken towards CSR?
A. Our CSR initiatives focus on healthcare, education, economic empowerment and environmental sustainability. In the fiscal year 2023-2024, ZS offices in India spent ₹7.5 Cr in making the world a better place, while 1,500+ ZS volunteers spent more than 6,000+ hours in volunteer service and touched roughly 111,000 lives through our nonprofit partnerships. Key highlights of the impact created in our focus areas include:
- Healthcare: Our initiatives aim at providing preventive healthcare services to people in urban slums. From improving anaemia levels in women to treating several skin disorders and other ailments, our initiatives have impacted 70,000 beneficiaries. Our pro bono consulting work with Shrimad Rajchandra Sarvamangal Trust in Valsad, Gujrat enhanced operational efficiencies and patient care at their healthcare facilities.
- Education: To ensure that the youth everywhere has equal access to quality education, we’ve partnered with Robotex India, engaging 1,200 students from underserved schools in STEAM (science, technology, engineering, arts and mathematics). The most recent cohort secured podium positions at Robotex International and presented their innovations to delegates at the G20 summit in Pune. Additionally, our partnership with Teach for India supported a fellowship program where 15 changemakers served as full-time teachers. The in-house ZScholars program provided merit-based financial assistance of ₹50,000 and ₹20,000 to students from low-income families, enabling them to pursue higher education.
- Economic empowerment: To foster equality and economic development, we’ve joined forces with the Clothes Box Foundation to help over 40 women in rural areas secure financial independence and contribute to local economies with skills training in industrial stitching. Through fabric upcycling, we’ve also helped eliminate waste, saving 50 tCO2e and serving 10,000 people living in isolated areas.
- Environmental sustainability: To increase urban green cover, we’re working with Green Yatra Trust to plant 25,000 tree saplings annually. By using the Japanese Miyawaki method, we are helping trees grow 10 times as fast and absorb 30 times as much CO2 than traditional methods. We’re also restoring water sources, protecting endangered species and rejuvenating ecosystems with support for a six-acre biodiversity park in the heart of Pune.
Q. Could you elaborate on the role of government policies when it comes to driving the ESG agenda?
A. If a company wants to work globally, it needs to quickly align its ESG work with global ESG legislation. In the last couple of years, ESG disclosures worldwide have been moving from voluntary to mandatory. Many recently enacted legislations in the EU (Carbon Border Adjustment Mechanism and EU Deforestation Regulation), USA (California’s ESG disclosure laws) and Singapore (Carbon tax, Climate disclosure obligations) mean that firms need to measure their GHG profile and make plans to reduce it. Firms need to disclose their labour and human rights practices both internally and in their supply chain. Companies that fail to meet the new requirements could find themselves priced out or excluded from global value chains.
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