Sustainability is no longer just a fashionable buzzword. Today, sustainability is a key to meeting consumer expectations, complying with regulatory conditions and reducing operational costs. But what does this imperative mean for the Business Process Outsourcing (BPO) sector?

What role can BPO-based solutions play in helping businesses achieve greater sustainability? How can outsourcing help your business reduce its carbon footprint?

Let’s take a deeper look at how the move toward greater sustainability is reshaping the global outsourcing sector and discuss the ways that BPO providers are adapting to meet this demand.

How Sustainability Initiatives Are Transforming BPO

Global ESG (environmental, social and governance) initiatives and consumer expectations have placed businesses under both practical and public pressure to decarbonize. This pressure extends to the strategies used for outsourcing.

According to McKinsey & Company, a growing number of companies are coming to recognize that “achieving the necessary decarbonization level means cutting not just the greenhouse-gas emissions from their own operations…but also the emissions from their value chains.”

This realization is changing the way businesses choose outsourcing partners. Below are just a few ways that sustainability issues are transforming BPO models:

The Shift Toward Sustainable Practices

Today, businesses are looking more closely at the environmental impact of their supply chains. Regulatory compliance may depend on a company’s ability to incorporate carbon emission targets, energy efficiency mandates and waste reduction guidelines into BPO partnerships. This means companies must be more selective about the partners they choose. Sustainability will increasingly factor into that selectivity.

Geographic Considerations

Historically, outsourcing models have emphasized cost-cutting opportunities, even if this meant operating in countries with lax environmental regulations. Today, consumers are paying close attention to how and where public companies conduct business. Businesses that are committed to sustainability are expected to conduct business only in nations where environmental regulations match rising international standards. Partnering with BPO providers that operate in nations with flimsy environmental standards may undermine public perception of this commitment.

New Compliance Standards

The changes to the outsourcing sector go well beyond public perception. Companies that conduct business overseas are beholden to increasingly strong global environmental regulations. As regulatory initiatives like the EU’s Green Deal take effect, companies must ensure that their outsourcing providers comply with emergent standards.

How BPO Providers Are Adapting To The Transformation

Sustainability initiatives and consumer expectations are transforming the outsourcing space. So, how are BPO providers adapting to meet these changes?

Embracing Energy-Efficient Operations

At the most basic level, many BPO providers are investing in green infrastructure and more sustainable operations. Adaptations may include data centers powered by renewable energy, office buildings that are LEED compliant and greater transparency regarding carbon emissions. In short, the best BPO providers are already working to meet the same basic sustainability standards that their clients are working toward.

Remote Work And Digital Transformation

I’m seeing a growing number of BPO providers embracing the environmental benefits of remote work. By allowing workers to operate from home or through smaller, more localized offices, outsourcing companies can significantly cut down on the energy used by physical office spaces and the fuel consumed for work-related travel. Another byproduct of the broader move toward remote work is the transition toward an even greater digitization of physical paperwork. Together, these changes can reduce the carbon footprint of both BPO providers and their clients.

Sustainability Reporting And Analytics

BPO providers aren’t just adapting to match the commitments of their clients. In many cases, BPO providers are leveraging their unique capabilities to help their clients accelerate the push toward greater sustainability. Third-party vendors are developing more sophisticated reporting mechanisms to help clients audit their own regulatory compliance as well as track sustainability efforts through advanced data analytics in areas like carbon emissions, energy usage and operational efficiency.

Reducing Carbon Emissions

As the section above suggests, the best BPO partners won’t be simply adapting to demands for greater sustainability. In many cases, expect BPO providers to guide clients toward more sustainable practices.

The same McKinsey & Company article notes, “Most companies will need to invest in analytical and strategy-setting capabilities just to institute these practices. Other capabilities may be needed as well, such as design skills to eliminate supply chain emissions by changing products’ material requirements, or engineering capabilities required to develop product-as-a-service business models.”

With this top of mind, I anticipate BPO providers following and applying capabilities such as:

Optimizing Business Processes For Sustainability

Better data can lead to more efficient business operations. BPO providers with the capacity for advanced data analytics will help clients better identify areas of waste and establish more efficient processes. For example, BPO vendors in the logistics sector can help reduce the environmental impact of client operations by streamlining inventory systems or optimizing transportation routes to reduce time spent on the road.

Technology And Automation

Outsourcing providers will offer clients access to cutting-edge technologies such as artificial intelligence (AI) and automation without requiring a major investment of capital or resources. These emergent technologies will help businesses automate repetitive tasks, reducing the time spent on project completion and ultimately lowering overall energy consumption.

Green IT Services

Because of the growing demand for improved sustainability, many BPO providers will be making green IT services a central part of their value proposition. They will help mitigate environmental impacts by taking steps such as hosting data in energy-efficient data centers or helping your business migrate to cloud-computing solutions with low carbon footprints.

Conclusion

Businesses are under increasing pressure from regulators, consumers and their own rising costs to improve sustainability practices. This means that BPO providers face the same pressure. To meet this, the outsourcing sector will need to leverage a host of innovative solutions.

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