While Covid-19 pandemic has been associated with negatives like illness, deaths, and drop in economic activity, it has on a positive note propelled India’s $194 billion worth outsourcing technology industry towards carbon neutrality in FY 2020-21, according to a new report released.
The pandemic led to an 85 per cent decrease in carbon emissions from outsourcing technology companies including IT, ITeS, engineering, GIC/GCC and startups in FY 2020-21, revealed a report by market intelligence firm UnearthInsight.
The reduction means a drop in approximately 0.3 million tonnes of carbon emission from pre-pandemic levels and approximately 2 million tonnes annually.
The reason for drop in carbon emissions could be attributed to factors such as Covid-induced work from home, increased adoption of digital platforms, electric vehicles (EV) and digital campus hiring platforms.
In FY 2020-21, a mere $750 million were spent on travel costs, resulting from commute to work, domestic travel, and international travel, by the outsourcing industry compared to $2.9 billion in FY 2019-20. Top five IT services companies — TCS, Infosys, HCL, Wipro and Tech Mahindra — spent around $370 million on travel costs in FY21, which is 75 per cent lower compared to $1.4 billion in FY20.
While today only 4 to 5 per cent of the approximately 4.4 million workforce in the outsourcing industry is traveling to work, an estimated over 20 per cent to 25 per cent employees will return back to work by early next year as global and domestic IT firms’ complete vaccination of employees and families. Thus, post- pandemic (mid next year) deployment of disruptive EV along with AI transportation tech platforms will pay off as tech companies aim to move from approximately 5 per cent employee travel on EVs to over 25 per cent to 30 per cent by 2025.
Significant adoption of digital tools to avoid future domestic and international travel needs with consumer-grade experience will also aid carbon neutrality, the report suggested.
“The outsourcing industry was on track for the adoption of hybrid working models, electric mobility even before Covid. However the pandemic and quick adoption of digital tools/technology has dramatically changed the scenario and today carbon emission reduction looks sustainable over a longer period of time,” said Gaurav Vasu, Founder and CEO, UnearthInsight, in a statement.
Further, the report showed that Covid pushed large industry players to deploy technologies like digital campus hiring platforms, significantly reducing carbon emission earlier generated by travel to over 1,000 campuses across the country.
By 2025, 75 per cent of campus hiring for tech industry is expected to happen through advanced end-to-end digital platforms/tools. This will force other Tier-I and Tier-II IT firms also to build digital platforms to attract graduate talent from across the country.
“Covid-19 disruption has made outsourcing organisations, clients’ and employees’ environment friendly, helping them accelerate their journey towards carbon neutrality and also digital workplace, improving operating margins in the long run. We see a greater realisation among companies on issues related to carbon emissions, hybrid workplaces and WFH policy and these are trends which will shape the future,” Vasu said.
The study conducted by UnearthInsight for FY 2020-21 included around 2,000 plus outsourcing technology companies in India. The findings are based on the annual reports of companies, primary research and the UnearthInsight database.