ESG To Lead HR Transformation: FICCI-BCG Report

A new report released by FICCI and Boston Consulting Group (BCG) during the ‘FICCI Innovation Summit 2024’ underscores the transformative changes reshaping the Indian HR landscape, with a significant emphasis on Environmental, Social, and Governance (ESG) integration. Titled India's HR Revolution: Building Workplaces for the Future, the report outlines strategies for organisations to thrive in a rapidly evolving business environment driven by technological advancements and the need for more inclusive and purpose-driven workplaces. 

The report identifies six critical components shaping the future of HR in India, placing a strong focus on embedding purpose-led culture through ESG initiatives and sustainability efforts. This integration of ESG within HR strategies is seen as essential by 85 percent of Indian CXOs surveyed, who believe that aligning organisational culture with broader societal goals is crucial for long-term success. Furthermore, 66 percent of respondents noted a significant increase in the importance of environmental responsibility in the past 1-2 years, prompting many organisations to adapt to global and national ESG reporting standards. 

Talent management is also highlighted as a key area of transformation, with 72 percent of organisations implementing policy changes to enhance work-life balance—a critical factor in retaining talent. The report reveals a growing prioritisation of comprehensive employee well-being programmes, with 79 percent of companies offering professional development opportunities and 60 percent providing mental health support, particularly in response to high burnout rates reported by 58 percent of Indian employees. 

Diversity, Equity, and Inclusion (DEI) initiatives are increasingly recognised for their business value, with 67 percent of CXOs affirming that diverse teams enhance overall performance and employee engagement. The report notes that 52 percent of organisations have set diversity targets across all levels, reflecting a commitment to creating more inclusive workplaces. 

In addition, the integration of generative AI in HR functions is highlighted as a key trend, with 45 percent of Indian companies already implementing or piloting GenAI in their HR processes. The report states that 93 percent of these companies have reported improved process efficiency and productivity. Predictive HR analytics is another area of focus, with a third of CXOs indicating that their organisations have centralised workforce planning incorporating advanced analytics. 

Overall, the FICCI-BCG report positions ESG integration as a driving force in the ongoing transformation of HR practices in India, with a clear shift towards building workplaces that are not only efficient and innovative but also aligned with the values of sustainability, inclusivity, and social responsibility.