ESG and Sustainability – Everest Group https://www.everestgrp.com A leading global research firm Tue, 04 Feb 2025 12:50:19 +0000 en-US hourly 1 https://www.everestgrp.com/wp-content/uploads/2020/02/favicon-150x150.png ESG and Sustainability – Everest Group https://www.everestgrp.com 32 32 Sustainability Technology in 2025 – What Can We Expect? | Blog https://www.everestgrp.com/blog/sustainability-technology-in-2025-what-can-we-expect-blog.html Thu, 09 Jan 2025 15:14:26 +0000 https://www.everestgrp.com/?p=137457 FinTech Sandboxes Good for Business Growth Good for Countries Economies blog 995818078

As we embark on a new year, our team of analysts working within the Experience, Sustainability & Trust service line looks at the 5 key themes and trends that we can expect to drive the sustainability technology and IT Services market in 2025.  Reach out to […]]]>
FinTech Sandboxes Good for Business Growth Good for Countries Economies blog 995818078

As we embark on a new year, our team of analysts working within the Experience, Sustainability & Trust service line looks at the 5 key themes and trends that we can expect to drive the sustainability technology and IT Services market in 2025. 

Reach out to discuss this topic in depth. 

1.Green computing will become integral to decarbonization strategies 

As national and local decarbonization strategies move towards implementation, green and sustainable computing, as well as energy efficient hardware and software, will become integral to achieving those objectives. Enterprises will include green computing initiatives and transition to energy-efficient equipment as part of their broader decarbonization commitments. We expect green data centers that consume less electricity and edge computing models to become more pervasive, as decarbonization approaches embed green computing. 

Aiming to reduce 50% of its Scope 1, 2, and 3 emissions by 2030, Google has already taken measures to reduce emissions across its operations and power some of its offices and data centers using carbon-free energy*.  

Unilever, in its Climate Transition Action Plan, has also committed EUR150 million to decarbonize its manufacturing program, which includes improving its electrical efficiency by installing more efficient equipment and controls, and transitioning to sustainably sourced biofuels. 

2.Circular economy practices of waste reduction and reuse & recycle will become mainstream 

In an effort to reduce costs, appease scrutinizing investors and comply with local regulations, companies will increasingly adopt circular economy practices, emphasizing resource efficiency optimization and waste reduction through better management.  

Increased attention on designing and producing sustainable products with longer lifecycles, coupled with measures to reuse and recycle materials and components, will also reduce the environmental impact of products and services.  

Microsoft, for example, achieved 89.4% reuse and recycle rates of servers and components across all cloud hardware in FY2023.  

Adopting packaging innovation, Unilever has designed 72% of its plastic packaging portfolio to be easily recycled, such that it avoids emissions at end-of-life incineration. Furthermore, it is collaborating with the World Economic Forum and the Ellen MacArthur Foundation to identify refill-reuse solutions for consumers. 

3.Emerging technologies such as Artificial Intelligence (AI) will create new use cases for sustainability and climate action

Much has already been written and said about the potential of artificial intelligence (AI) across industries. It is, however, interesting to observe the emergence and adoption of AI across sustainability.  

From monitoring and identifying ways to reduce a company’s carbon footprint to optimizing energy consumption in smart cities, from enabling precision agriculture to increase yield to predicting climate disasters, AI is playing an instrumental role in advancing sustainability use cases.  

As an example, Sipremo, a Brazilian startup, has used AI to predict the location and timing of climate disasters, along with the type of disaster that will occur. This helps businesses, governments, and communities better prepare for impending adverse climate events.  

Another AI-led startup, Eugenie.ai, has embedded AI in its emissions-tracking platform that combines satellite imagery with data from machines and processes and helps companies track, trace, and reduce their emissions by 20-30%.  

In addition to these environmental use cases, we expect social ones to emerge as well. Unbiased Generative AI (gen AI) can promote diversity in hiring, reduce biases from seeping through, create more equitable workplace, and improve social outcomes. Key stakeholders in the gen AI ecosystem – technology providers, service providers, and enterprises – have a crucial role to play in influencing sustainability outcomes

4.The “skills gap” will drive demand for ESG professionals, particularly for regulatory compliance

We predict that the social impact of sustainability will be visible through the pronounced ‘skills gap’. As more regulators tighten the grip on companies to demonstrate their sustainability commitments, the talent gap for professionals with background and experience across these evolving frameworks will widen.  

This is already witnessed globally – the 11.6% growth in global demand for green talent is almost twice the 5.6% growth in talent supply. This trend is expected to continue until at least 2030, when one in five jobs is expected to lack the required talent.  

Current demand for ‘green’ skills is high in areas of pollution and waste prevention, renewable energy generation, sustainable finance, environmental audits, environmental policy, and sustainable procurement. Particularly in Europe, the changing regulations and the ongoing energy transition are driving up the demand for such professionals with skills pertaining to climate change and/or sustainability, notably in the UK, Ireland, Norway, and Switzerland. 

Diversity, Equity, Inclusion, and Belonging (DEIB) is another area that warrants more attention. This year, inclusive recruitment will be crucial, from a social standpoint, to address commonly observed biases in technology (gen AI) adoption. We expect increased regulatory interventions through policies and consultation papers to help stakeholders navigate the uncertainties currently engulfing this space. 

5.Climate tech investments will create financial asset classes and broaden capital allocation opportunities 

Driven by regulatory pressures and consumer demand for sustainable products and services, companies are investing in climate technologies. This is leading to the development of innovative solutions to tackle climate-related challenges and is also opening investment opportunities for sustainable finance

Continued investments in green hydrogen, battery technology, sustainable fuels, green built environments, and nature conservation, to name a few, are expected to push forward technology innovations and create opportunities for environmentally sustainable financial investments.  

IBM, for instance, uses AI-driven material discovery to identify molecular structures for carbon dioxide (CO2) separation membranes, leading to cost-effective CO2 emissions capture and storage.  

From an investment perspective, climate bonds** surpassed a cumulative volume of US$5.1 trillion in the first half of the year (H1) of 2024, suggesting growing volumes of capital allocated to climate technologies and environment-friendly objectives.  

This is already evident in the social impact sector – the orange asset class has emerged to advance gender equity for prosperity, peace, and planetary resilience. We expect this trend to become more pronounced, particularly as global events in 2024 such as COP16 (biodiversity) in Colombia and COP29 (climate change) in UAE emphasized the importance of climate finance and ‘finance for good’. 

What does this mean for us? 

What do these trends and predictions mean for you as a stakeholder in this space? What are the implications for enterprises and service providers? How can we be better prepared for 2025? 

As an enterprise: 

  • Invest in building capabilities internally or hiring skilled professionals to help with accurate reporting on sustainability initiatives for regulatory compliance 
  • Identify opportunities across your supply chain for emissions reduction, waste and pollution prevention, reuse and recycling, and technology adoption 
  • Conduct competitive benchmarking exercises to map yourself against industry peers and identify opportunities for improvement 
  • Collaborate with industry associations, development organizations, and government agencies on industry-level initiatives

As a service provider, software/technology provider, or consulting/advisory firm:

  • Bridge the skills gap by providing enterprises with qualified skilled professionals with strong domain knowledge of evolving regulations (e.g., the Corporate Sustainability Reporting Directive (CSRD) in Europe) to help them report accurately on their sustainability initiatives. 
  • Build competencies for internal initiatives and conduct pilots and Proofs of Concept (PoCs) within the organization. Leverage successful initiatives as case studies to demonstrate expertise to clients on specific sustainability programs. 
  • Conduct research on sustainable Information Technology (IT) and energy efficiency initiatives to identify investment opportunities that cut across multiple facets of sustainability (e.g., circular economy principles to reduce e-waste) 

If you found this blog interesting, check out our blog focusing on Boosting Project Readiness In Technology Talent: A Comprehensive Framework For Developing Project-Ready Workforce | Blog – Everest Group, which delves deeper into another topic relating to this service line. 

To discuss these 2025 predictions and other insights from our research on current and future STS trends and evolutions, please reach out to Siddharth Muzumdar (siddharth.m.ext@everestgrp.com) and Arpita Dwivedi (arpita.dwivedi@everestgrp.com

Key: 

* Google’s definition of renewable energy sources, which includes carbon capture and storage technologies  

** Include green, social, sustainability, and sustainability-linked bonds 

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Driving Sustainability with Green Software Engineering | Blog https://www.everestgrp.com/driving-sustainability-with-green-software-engineering-blog.html Tue, 17 Dec 2024 20:44:57 +0000 https://www.everestgrp.com/?p=136934 Driving Sustainability with Green Software Engineering | Blog

As the world becomes increasingly aware of environmental issues, sustainability in software development has emerged as a critical area of focus. While traditionally associated with physical products and processes, sustainability now extends to the digital realm, with the software sector playing a […]]]>
Driving Sustainability with Green Software Engineering | Blog

As the world becomes increasingly aware of environmental issues, sustainability in software development has emerged as a critical area of focus. While traditionally associated with physical products and processes, sustainability now extends to the digital realm, with the software sector playing a pivotal role in reducing carbon emissions. 

The technology industry holds a unique position to drive this change. It is imperative for developers, businesses, and consumers to understand the environmental impact of software development and adopt greener practices. 

Reach out to discuss this topic in depth. 

How software affects sustainability

Sustainability in software was often overlooked, as many assumed it didn’t pose environmental challenges like hardware, however, this view has shifted. Inefficient development practices and the hardware demands driven by software significantly increase energy consumption and carbon emissions.

With the rise of cloud computing, edge technologies, and the Internet of Things (IoT), software’s environmental impact has grown. While innovations like serverless computing and containerization improves efficiency, they also contribute to higher energy usage and e-waste.

While most senior Information Technology (IT) decision-makers acknowledge Environmental, Social, and Governance (ESG)and sustainability as top priorities, many enterprises are still in the midst of their digital transformation journeys or have yet to begin. These organizations are heavily investing in digital initiatives but continue to struggle with technical debt.

Sustainability, however, offers a promising opportunity. It not only accelerates digitalization but also aligns seamlessly with enterprise-wide optimization efforts. As we move toward an information-driven economy that leverages data for smarter decisions, businesses have a unique chance to embed sustainability into their digital strategies, enhancing operational efficiency, while staying competitive.

A central focus of sustainability efforts is reducing the storage and computing footprint of software. By optimizing resource consumption, companies strive to lower energy usage and minimize the environmental impact of their digital operations.

Screenshot 2024 12 17 095127

Green software engineering – a step toward sustainability

Green software engineering is centered on building software with sustainability as its core principle. It aims to minimize the environmental impact of software by reducing energy usage, resource consumption, and carbon emissions across the software lifecycle.

Key features include:

  • Optimized energy usage: Focuses on writing energy-efficient code, minimizing the energy consumed by software during execution. This includes using algorithms and approaches that reduce computational power and processing requirements
  • Reduced resource consumption: Designs software to use fewer hardware resources (Central Processing Unit (CPU), memory, storage) while maintaining optimal performance, promoting efficient resource utilization without over-provisioning
  • Lowered environmental impact: Prioritizes reducing carbon emissions through the use of renewable energy-powered infrastructure, optimized data centers, and energy-efficient hardware. Leading companies like Google and Microsoft demonstrate these eco-friendly practices, showing the feasibility of greener software solutions.

Languages and frameworks like Go, Rust, and Node.js have gained significant popularity among developers in recent years, thanks to their focus on energy efficiency and sustainability. These technologies are designed to minimize resource consumption, making them more eco-friendly choices for modern software development.

To help developers make informed decisions, comparative benchmarks also allows them to evaluate the energy consumption of various technologies. This guides the selection of the most sustainable options based on specific project needs.

However, adopting these greener technologies comes with its challenges:

  • System compatibility: Integrating new frameworks with existing systems can be complex
  • Learning curve: Developers may need time to master these newer technologies, which may differ from traditional languages
  • Performance trade-offs: Optimizing for sustainability can sometimes impact performance, requiring careful balance

Overcoming these challenges will require collaboration between developers, researchers, and industry stakeholders to find effective solutions that both reduce environmental impact and maintain high performance.

Screenshot 2024 12 17 095153

Challenges to adoption

Despite advancements in sustainable software engineering, several challenges hinder its widespread adoption, particularly among small and medium-sized enterprises (SMEs). The key barriers include:

  • Limited awareness and resources: Many organizations, especially SMEs, lack the necessary awareness, expertise, and financial resources to prioritize sustainability in software development
  • Complexity in measuring environmental impact: Evaluating energy consumption and emissions requires advanced lifecycle assessment tools and a deep understanding of hardware, cloud infrastructure, and software architecture
  • Absence of standardized frameworks: The lack of universal standards creates inconsistencies, making it harder to ensure compliance with environmental regulations, measure impact, and achieve system interoperability
  • Trade-offs between performance and sustainability: Optimizing for sustainability often involves balancing energy efficiency with performance and user experience, which can be challenging for developers
  • Integration with existing systems: Embedding sustainability into current workflows and systems demands a significant mindset shift, along with technical adjustments and training to adopt newer, eco-friendly technologies

Opportunity for service providers

As enterprises increasingly prioritize sustainability, service providers have a unique opportunity to lead and support this transformation by delivering solutions that align with environmental goals while enhancing operational efficiency. Here are key areas where service providers can make a meaningful impact:

  • Develop green software solutions: Create energy-efficient software applications that reduce carbon emissions and resource usage, meeting the growing demand for sustainable technology from environmentally conscious enterprises
  • Provide consulting and integration services: Take proactive initiative with clients to embed sustainable software architectures, optimizing cloud resource usage, and embedding energy-efficient practices throughout the software development lifecycle
  • Develop sophisticated lifecycle assessment tools: Offer artificial intelligence (AI)-enabled tools that enable comprehensive auditing and measurement of a software product’s environmental impact, assessing energy consumption, resource utilization, and carbon emissions throughout its entire lifecycle, from design to disposal
  • Build training and certification programs: Develop specialized training modules and certifications to equip developers with expertise in green coding, carbon efficiency, and sustainable development practices

By focusing on these opportunities, service providers can differentiate themselves in a competitive market, drive innovation in sustainability, and position themselves as essential partners in achieving their clients’ ESG objectives.

If you found this blog interesting, check out our blog focusing on Getting Digital Product Verification And Validation Right Through “As-a-Service” Models | Blog – Everest Group, which delves deeper into another subject focused on by the Engineering & Information Tech service line.

We are actively tracking the evolution of sustainability and its impact on the future of all sectors. To discuss the latest trends and their implications for brands, technology vendors, and service providers alike, feel free to reach out to Manjul K (manjul.k@everestgrp.com), Mayank Maria (mayank.maria@everestgrp.com) and Kishore BS (kishore.bs@everestgrp.com).

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Mapping the Next: Key Priorities for 2025 | Webinar https://www.everestgrp.com/webinars/mapping-the-next-key-priorities-for-2025-webinar.html Mon, 09 Dec 2024 19:29:46 +0000 https://www.everestgrp.com/?p=122647 12-10-2024 - Mapping the Next - 1200x628 - GTP

Join us as we reveal findings from the annual “Mapping the Next: Key Priorities for 2025” study, offering an inside look into the top concerns, expectations, and goals of industry leaders for the coming year. This session will spotlight leaders’ […]]]>
12-10-2024 - Mapping the Next - 1200x628 - GTP

Watch the Webinar On-Demand

Join us as we reveal findings from the annual “Mapping the Next: Key Priorities for 2025” study, offering an inside look into the top concerns, expectations, and goals of industry leaders for the coming year. This session will spotlight leaders’ core priorities, such as technology adoption, digital transformation, generative AI, customer experience, and sustainability.

Our experts will also discuss critical global services decisions, including build vs. buy strategies, in-house vs. outsourcing, onshore vs. offshore operations, and the balance between long-term and short-term contracts.

This is your chance to hear exclusive, high-impact insights and gain an edge so you can make more informed decisions that will improve organizational resilience, competitiveness, and chances of future success for 2025.

What questions will the webinar answer for the participants?

  • What are the trends that will shape the global services market in 2025?
  • What are the likely changes in sourcing spend, sourcing strategy (in-house vs. outsource), and locations?
  • What is the enterprise outlook on tech and AI adoption in 2025?
  • Which digital services and next-generation capabilities are expected to be in demand?
  • How are outsourcing deals, enterprises’ leverage of service providers, and bill rates expected to change?

Who should attend?

  • Enterprise/business leaders (CIOs, CDOs, CTOs, CFOs, CPOs)
  • Global sourcing leaders
  • GBS/shared services center heads
  • Leaders at IT and BP providers
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Call to Action for GBS Leaders to Unlock More Value from Their ESG Initiatives | Market Insights™ https://www.everestgrp.com/market-insights/environmental-social-and-governance/call-to-action-for-gbs-leaders-to-unlock-more-value-from-their-esg-initiatives-market-insights.html Thu, 21 Nov 2024 12:29:15 +0000 https://www.everestgrp.com/?p=124662 Call to Action for GBS Leaders to Unlock More Value from Their ESG Initiatives

GBS Leaders VIEW THE FULL REPORT ]]>
Call to Action for GBS Leaders to Unlock More Value from Their ESG Initiatives

GBS Leaders

VIEW THE FULL REPORT 

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ESG Data Management Platform PEAK Matrix® Assessment https://www.everestgrp.com/peak-matrix/environmental-social-governance/esg-data-management-platform.html Wed, 20 Nov 2024 13:31:06 +0000 https://www.everestgrp.com/?p=124727 ESG Data Management Platform24

In today’s fast-paced business landscape, sustainability is vital for corporate strategies and operations. Organizations evaluate their financial performance, commitment to ethical practices, and impact on society and the environment. As stakeholders demand greater transparency and accountability, the need for effective […]]]>
ESG Data Management Platform24

In today’s fast-paced business landscape, sustainability is vital for corporate strategies and operations. Organizations evaluate their financial performance, commitment to ethical practices, and impact on society and the environment. As stakeholders demand greater transparency and accountability, the need for effective ESG data management has surged. This shift highlights the importance of integrating sustainability into core business practices.

Stringent regulatory frameworks, such as the Global Reporting Initiative (GRI) and the International Financial Reporting Standards (IFRS), compel companies to disclose their sustainability practices comprehensively. These regulatory mandates also fuel the growing emphasis on ESG data management. With increasing scrutiny from regulators and heightened public awareness of environmental issues, effective ESG data management has become essential for companies to meet compliance requirements and enhance their operational efficiencies.

  • ESG Data Management Platform PEAK Matrix® Assessment 2024

    ESG Data Management Platform24

    What is in this PEAK Matrix® Report

    In this report, we assess 26 ESG data management providers’ capabilities, including their platform capabilities, key IP/solutions, domain investments, and market positioning. The report equips organizations with the insights to select the right ESG data management solutions tailored to their unique needs. It empowers companies seeking to advance their sustainability initiatives and drive meaningful operational change.

    Scope:

    • All industries and geographies
    • This assessment is based on Everest Group’s annual RFI process for the calendar year 2024, interactions with leading ESG data management platform providers, client reference checks, and an ongoing analysis of the ESG data management platform market.

    Contents:

    In this report, we:

    • Evaluate ESG data management platform market trends
    • Examine key factors and technologies shaping the ESG data management platform market
    • Analyze buyer adoption trends
    • Compare providers’ key strengths and limitations
    READ ON

What is the PEAK Matrix®?

The PEAK Matrix® provides an objective, data-driven assessment of service and technology providers based on their overall capability and market impact across different global services markets, classifying them into three categories: Leaders, Major Contenders, and Aspirants.

LEARN MORE ABOUT Top Service Providers

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Research: Extending Corporate Life of Laptops by Just One Year Can Reduce Harmful Emissions by 25% https://www.everestgrp.com/in-the-news/research-extending-corporate-life-of-laptops-by-just-one-year-can-reduce-harmful-emissions-by-25.html Tue, 12 Nov 2024 10:07:36 +0000 https://www.everestgrp.com/?p=124304 download 12

Extending the standard refresh cycle of laptops in a corporate environment can significantly reduce a workplace’s carbon footprint, according to new workplace sustainability research. However, challenges in ensuring the older laptops still meet Windows OS requirements, and other cost issues, […]]]>
download 12

Extending the standard refresh cycle of laptops in a corporate environment can significantly reduce a workplace’s carbon footprint, according to new workplace sustainability research. However, challenges in ensuring the older laptops still meet Windows OS requirements, and other cost issues, could offset these environmental gains, experts said.

Indeed, organizations are currently facing an important choice as the end of Windows 10 support looms: how do they want to approach either migration to Windows 11, or staying with older Windows 10 devices, noted Everest Group Senior Analyst Prabhneet Kaur.

“While component upgrades, like increasing RAM, can help meet Windows requirements, or informal workarounds may bypass them, maintaining robust security and a quality user experience will be tricky,” she said.

Read more at: Computer World

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Everest Group Exceeds Impact Sourcing Targets in 2024 https://www.everestgrp.com/in-the-news/everest-group-exceeds-impact-sourcing-targets-in-2024.html Mon, 11 Nov 2024 15:43:39 +0000 https://www.everestgrp.com/?p=124240 download 7

Global research firm Everest Group has announced the achievement of its Commitment to Action to increase impact sourcing in the tech services industry from 350,000 to 500,000 over a two-year period. Rita N. Soni, Principal Analyst for Impact Sourcing and […]]]>
download 7

Global research firm Everest Group has announced the achievement of its Commitment to Action to increase impact sourcing in the tech services industry from 350,000 to 500,000 over a two-year period.

Rita N. Soni, Principal Analyst for Impact Sourcing and Sustainability at Everest Group, stated: “The technology and tech services industries are such a source of inspiration for innovatively executing impact sourcing practices across the globe and improving the lives of millions from marginalized communities.”

Read more at: IT Brief UK

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Generative AI (Gen AI’s) DEIB Dilemma: How Ignoring Inclusion Can be Costly for Businesses https://www.everestgrp.com/technology-industry/generative-ai-gen-ais-deib-dilemma-how-ignoring-inclusion-can-be-costly-for-businesses.html Fri, 08 Nov 2024 11:51:06 +0000 https://www.everestgrp.com/?p=124109 8 Interested in our GBS complementary research

In our previous blog, we discussed how the advent of generative AI in our day-to-day lives has skyrocketed in the past few years, helping individuals and companies efficiently tackle tasks through automation and reduce the time taken to complete them.  […]]]>
8 Interested in our GBS complementary research

In our previous blog, we discussed how the advent of generative AI in our day-to-day lives has skyrocketed in the past few years, helping individuals and companies efficiently tackle tasks through automation and reduce the time taken to complete them. 

Furthermore, new applications of gen AI for business solutions are being developed at a breakneck pace across industries such as Retail And Consumer Packaged Goods (RCPG) Retail and Consumer Packaged Goods, Banking And Financial Services, Healthcare and Life Sciences, and Human Resources , among others.  

Additionally, companies are now expecting more tangible results from the implementation of gen AI to avoid losing market share. This is true for all the previously mentioned stakeholders: technology providers, service providers, and enterprises.  

At the same time, these stakeholders must be mindful of their critical role in fulfilling the DEIB (Diversity, Equity, Inclusion, and Belonging) mandate, which includes promoting inclusive and equitable practices in gen AI development and deployment. The absence of comprehensive DEIB measures in gen AI models can have detrimental effects both internally and externally. 

Furthermore, equitable artificial intelligence (AI) learning is essential. A survey conducted by a leading consulting firm, indicates that only 10-15% of businesses have established AI roles focused on fostering diverse perspectives within their teams.  

Professionals’ lived experiences provide critical insights for mitigating bias—a truth that all stakeholders must embrace. Before exploring potential solutions, it’s important to investigate the root causes of bias, the different types of biases present, and their implications, as our analysts have done below. 

Reach out to discuss this topic in depth. 

The Case for DEIB in Gen AI:

While technology offers substantial benefits, a significant DEIB challenge persists within current gen AI frameworks, leading to adverse effects for individuals and organizations. AI algorithms – a host of which are trained on existing framework models, lack diverse perspectives, and can mirror the biases of their creators, perpetuating inequalities and harming marginalized communities.

Cultural and social biases often infiltrate these systems, resulting in flawed outputs that do not accurately reflect varied experiences and knowledge.

Some benefits of unbiased gen AI Models include:

At the same time, adopting unbiased gen AI models can significantly benefit organizations by:

  • Enhancing Decision-Making: Eliminating biases allows for more accurate, objective insights, improving decision-making across scenarios
  • Improving Customer Insights: Objective data analysis helps businesses better understand customer needs, facilitating targeted marketing
  • Promoting Diversity in Hiring: Unbiased AI can eliminate discrimination in recruitment, supporting diverse candidates, including neurodivergent individuals
  • Streamlining Operations: Reducing bias in automated processes optimizes operations, enhancing overall efficiency and productivity
  • Fostering Innovation: Bias-free AI models yield more diverse and creative ideas, propelling innovation across sectors
  • Improving Risk Management: Unbiased AI provides clearer, balanced assessments, aiding organizations in identifying and managing risks effectively
  • Ensuring Compliance with Ethical Standards: Utilizing unbiased AI aligns with ethical norms and best practices, fostering trust and accountability
  • Creating a More Equitable Workplace: By promoting fairness, unbiased AI contributes to a more inclusive environment, driving organizational growth

A deep dive into the causes and types of the bias in terms of DEIB?

Gen AI models are statistical by nature and prone to errors, especially when lacking domain expertise. Currently, a small, homogeneous group often determines the data used for training these models. Many models are built on foundational frameworks such as BERT or RooBERTa, which can carry inherent biases if not addressed from the outset.

Types of DEIB bias include:

Screenshot 2024 11 08 114257

The social and business cost for business by utilizing a biased gen AI model:

Addressing these challenges is paramount for companies when accounting for the vast use cases of this technology across sectors. For example, 19% of organizations are leveraging AI to develop new products and services across the RCPG space, according to an Everest Group insight 

Similarly, 40-45% of business leaders of mega enterprises (revenue exceeding US$ 1 billion) have reported successful implementation of gen AI across various operations in this Everest Group viewpoint. We expect this number to consistently increase in the coming years.  

If the models used for these products or services produce biased results or incorrect outcomes (an important component of ‘hallucinations’), it could negatively impact the companies’ reputations and their bottom lines. Thus, there are both direct and indirect costs associated with leveraging these models. The two key types of costs that businesses would suffer from are the following: 

Business Cost: The direct financial expenses incurred by a business, including production costs, operating expenses, and the costs of complying with regulations. These costs can be both internal and external to the business 

Social Cost: The total economic cost to society, including both direct costs borne by individuals and businesses, as well as indirect costs such as environmental damage, decreased quality of life, and social inequality 

Screenshot 2024 11 08 114452

While unbiased AI models are essential, their development and deployment can be costly. Collecting high-quality data for model training, designing and customizing AI models from scratch, and employing sophisticated techniques and specialized talent all contribute to the complexity.  

Additionally, scaling these models across large organizations or multiple geographies can introduce new biases due to variations in cultural, linguistic, and socioeconomic factors. Therefore, companies must be deliberate in identifying which products, services, or functions truly require such AI models.  

In response, some organizations have appointed Chief Diversity, Equity and Inclusion (DE&I) Officers, but this approach may be limited, as these officers typically focus on talent acquisition and retention.  

Effectively addressing AI’s DEIB impact requires input from multiple leaders, including the Chief Information Officer (CIO)/ Chief Technology Officer (CTO), Chief Product Procurement Officer (CPO), Chief DE&I Officer, and Chief Sustainability Officer, making it both resource- and cost-intensive. Furthermore, while algorithmic impact assessments are well-intentioned, they often fall short in fully capturing the broader social implications of AI models. 

To address this challenge, Everest Group has developed a framework that stakeholders can use to navigate these complexities effectively, with the overarching principle of the “Comprehensive Inclusion Framework” viewed from both an internal and external perspective. This principle is broken down into four key areas: 

  • Inclusiveness emphasizes broad representation in the entire AI development lifecycle. It ensures that diverse perspectives, experiences, and needs are considered when designing, developing, and deploying AI systems 
  • Impartiality ensures that AI decision-making processes are neutral, objective, and free from bias or unfair influence by continuously assessing the outputs of the model and checking for impartiality. Thus, blending in objective data driven insights 
  • Equity, in the context of AI ensures that all user groups experience fair and just outcomes from AI systems, regardless of their background, demographics, or identity  
  • Accessibility, focuses on making sure that AI technologies are usable and beneficial to all individuals, regardless of their socioeconomic status, disabilities, education, or geographic location 

The framework provides a comprehensive approach to integrating gen AI and DEIB policies within organizations across vertical and horizontal processes. It categorizes various policy combinations based on the level of emphasis placed on AI and DEIB and offers recommendations to achieve optimal alignment. The categories include: 

  • Low DEIB Impact: DEIB efforts are not prioritized due to the lack of strong business or social cases 
  • Medium DEIB Impact: DEIB efforts are focused on business and social benefits, with AI considered a tool to enhance these case 
  • High DEIB impact: DEIB values are deeply integrated into organizational culture, using AI to drive inclusivity and equity throughout the business 

 

Screenshot 2024 11 08 114606 

The current state of the market in terms of DEIB embodiment by stakeholders: 

As mentioned in our last blog post, across stakeholders, the current level of DEIB integration according to our ROLE framework is as follows: 

Screenshot 2024 11 08 114705

As gen AI increasingly influences business operations, stakeholders must prioritize DEIB in their AI development and deployment efforts.  

Tackling inherent biases and fostering fairness will not only mitigate risks but also enhance decision-making, customer insights, innovation, and workplace equity. By adopting frameworks such as Everest Group’s “Comprehensive Inclusion Framework”, organizations can effectively align their AI and DEIB strategies, ensuring long-term success and ethical compliance. 

We are actively tracking the evolution of artificial intelligence and its impact on the future of all sectors. To discuss the latest trends and their implications for brands, technology vendors, and service providers alike, feel free to reach out to Kanishka Chakraborty (kanishka.chakraborty@everestgrp.com), Meenakshi Narayanan (meenakshi.narayanan@everestgrp.com), Abhishek Sengupta (abhishek.sengupta@everestgrp.com), Abhishek Biswas (abhishek.biswas@everestgrp.com), Rita Soni (rita.soni@everestgrp.com) and Cecilia Van Cauwenberghe (cecilia.vancauwenberghe@everestgrp.com). 

If you found this blog interesting, check out our blog focusing on Building Purpose-Driven Generative AI (gen AI) – Why We All Have A Role To Play In The Future Success Of The Gen AI Ecosystem | Blog – Everest Group, which delves deeper into the subject of gen AI. 

This is the first of a new series of blogs, with plenty more to come in 2024 and 2025! 

 

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How Sustainable Engineering is Shaping a Responsible Future | Webinar https://www.everestgrp.com/webinars/how-sustainable-engineering-is-shaping-a-responsible-future-webinar.html Tue, 22 Oct 2024 20:51:05 +0000 https://www.everestgrp.com/?p=120716 How Sustainable Engineering is Shaping a Responsible Future - 1200x628

<span id=”mce_marker” data-mce-type=”bookmark” data-mce-fragment=”1″>​</span><span id=”__caret”>_</span>[/button]​_WATCH THE WEBINAR ON-DEMAND ER&D enterprises are undergoing a significant shift in customer preferences due to growing environmental awareness, social opportunities, and government regulations, which is dramatically reshaping engineering priorities. Watch this webinar to hear our […]]]>
How Sustainable Engineering is Shaping a Responsible Future - 1200x628

WATCH THE WEBINAR ON-DEMAND

ER&D enterprises are undergoing a significant shift in customer preferences due to growing environmental awareness, social opportunities, and government regulations, which is dramatically reshaping engineering priorities.

Watch this webinar to hear our experts discuss the latest key sustainable engineering priorities and the evolving ER&D landscape. They shared practical recommendations for sustainable engineering spend, examined current challenges that enterprises face, and explored the latest impacts on sustainable engineering outsourcing.

Plus, attendees learned how enterprises can effectively realign talent, technology, and ecosystem engagement strategies to adopt and scale sustainability initiatives.

What questions did the webinar answer?

  • What are the emerging trends and key themes driving the sustainable engineering market?
  • What challenges do enterprises face while incorporating/adopting the concept of sustainability into their engineering journey?
  • How do you strategize for talent, technology, and ecosystem leverage to mitigate challenges?

Who should attend?

  • Chief sustainability officers, chief diversity officers, chief innovation officers, chief supply chain officers, CTOs, CPOs, COOs, CEOs
  • Sourcing and vendor managers, procurement managers, global sourcing managers, and heads of outsourcing
  • Climate change and net-zero transformation leaders
  • Vice president of innovation, automotive
  • Heads of engineering and R&D
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The Importance of Green IT | #EGresponsible https://www.everestgrp.com/media/the-importance-of-green-it-egresponsible/ Tue, 22 Oct 2024 09:42:39 +0000 https://www.everestgrp.com/?post_type=embed_media&p=123514 We have expanded the EG Responsible video series into the exciting world of sustainability in the digital space, green IT. In this video, Everest Group explores the case for focusing on reducing the carbon footprint and energy consumption of IT because each and every digital transaction needs energy, physical infrastructure, and a device to run. Everest Group’s Rita Soni, Principal Analyst, speaks with Asim Hussain, CEO of the Green Software Foundation (GSF) and David Costa, Chief Sustainability Officer of NTT Data, to discuss the concept of green IT, how the industry is addressing the space, and the important collaborative role of GSF in creating standards and open dialog among competitors. GSF website: https://greensoftware.foundation/

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