Contents
Introduction Social
Governance
Environmental
Indexes
Awards
TTEC 2024 Impact and Sustainability Report
40
Risk identification, assessment and management
Physical Risks
Transition Risks
Severe weather increases in regions where we operate
Operation of facilities in regions classified as “High Water Stress” areas
Global Climate Regulations: The Consequences of Non-Compliance
Sustainability in CX Outsourcing: Aligning with Client ESG Goals
Ensuring Business Continuity Amid Climate Change: Protecting IT Infrastructure and Sensitive Data
Category
Acute
Chronic
Category
Policy and Legal
Market and Reputation
Technology
Description
Due to climate change, the frequency and intensity of cyclones, hurricanes, and flooding increase in regions where we operate.
TTEC operates many of its facilities in regions classified as “High Water Stress” areas. These regions face significant challenges in terms of water availability and quality, which can impact both the environment and local communities.
As digital transformation accelerates, maintaining service continuity requires robust measures to address the impacts of climate change on our operations. Climate-related events, such as extreme weather, can disrupt our IT infrastructure and other critical systems, potentially leading to operational downtime. Such disruptions could affect our ability to protect sensitive customer data, including personally identifiable information (PII), protected health information (PHI), and financial details.
Key clients increasingly prioritize CX outsourcing partners with strong sustainability credentials, seeking partners that align with their own ESG goals and ambitions. Clients looking to align with consumer preferences may reduce business with CX partners that lack visible sustainability initiatives.
Description
As climate regulations tighten globally, non-compliance or failure to meet mandatory climate-related disclosure requirements leads to fines, legal disputes, or reputational damage.
Likelihood
Likely
Possible
As of FY 2023, 41% of our sites are in high water-stress regions. The high water stress in these areas can lead to several potential issues for TTEC. Limited water availability can increase the cost of water procurement and create operational disruptions if water supplies become insufficient. Additionally, there is a risk of contributing to local water scarcity, which can affect the surrounding communities and ecosystems. Ensuring sustainable water use is critical to avoid exacerbating these challenges. By potentially impacting the livelihoods of those who rely on our business, these disruptions underscore the interconnected nature of our resilience with that of the communities we serve.
Potential Impacts
The potential impacts of climate-related events on our operations are extensive, particularly affecting employee well- being and the stability of our infrastructure. Severe weather, such as flooding or cyclones, could disrupt operations by limiting accessibility to our facilities or damaging critical infrastructure. This may delay services, increase recovery costs, and create challenging working conditions for our employees. Prolonged operational interruptions could significantly affect our employees’ well-being, as they may face increased stress and uncertainty about their job security and safety. Additionally, the communities where we operate may experience indirect impacts from our climate-related challenges. Disruptions to our services or facilities can create local economic instability, especially in areas where we are a key employer. By potentially impacting the livelihoods of those who rely on our business, these disruptions highlight the interconnected nature of our resilience with that of the communities we serve.
Likelihood
Unlikely
Possible
Likely
Extreme weather events caused by climate change could lead to significant service disruptions as facilities are damaged or become inaccessible. This downtime may interrupt client service delivery, impacting client satisfaction and loyalty. Employee productivity could also suffer due to limited access to workspaces and resources. Recovery efforts, including facility repairs, data restoration, and enhanced infrastructure resilience, would incur costs. Additionally, immediate communication with clients, employees, and stakeholders would require significant resources and coordination, further complicating recovery efforts.
Without proactive ESG measures, TTEC risks losing clients to competitors better aligned with global sustainability goals. This could result in decreased revenue and a weaker market presence, particularly in regions with stringent green standards. Major clients, such as those in retail, technology, and finance, may prioritize CX providers who can demonstrate credible climate action as part of their supplier due diligence. Competitors offering sustainable CX services might attract clients looking to maintain an eco-friendly supply chain. Failure to adapt could result in reduced market share.
Potential Impacts
Non-compliance with climate regulations could lead to fines from regulatory bodies. Both the EU and California have mechanisims to enforce compliance with substantial penalities for companies that fail to meet reporting standards.
Time Period
Short, Medium and Long-term
Long-term
Financial Implications
Not yet quantified.
Not yet quantified.
We assessed the water stress risk by analyzing data from the World Resources Institute on areas experiencing water stress. This initial analysis enabled us to identify and quantify the associated risks.
Methodology
Our facilities, business continuity and disaster recovery, people & culture, and workforce management (WFM) teams collaborate to document climate-related operational disruptions. Quarterly reports are generated, which are then shared with our finance team to quantify the financial impact. 2024 Impact & Sustainability Report - Governance - Resiliency management - page 32
Time Period
Short term
Short and Medium term
Short, Medium and Long term
Financial Implications
Not yet quantified.
Not yet quantified.
Not material
Methodology
2024 Impact & Sustainability Report - Governance - Enterprise risk management - page 34
We actively monitor ESG-related requests from our clients to better understand and align with their evolving sustainability priorities.
Our Business Continuity and Disaster Recovery, Workforce Management, and Information Technology teams work together to document climate-related technology service disruptions and generate quarterly reports, which are shared with our Finance team to quantify the financial effects. 2024 Impact & Sustainability Report - Governance - Resiliency management - page 32 2024 Impact & Sustainability Report - Governance - Business continuity and disaster recovery - page 33
Management Approach
2024 Impact & Sustainability Report - Environmental - TTEC’s impact - page 37
Management Approach
2024 Impact & Sustainability Report - Governance - Ethics & Compliance - page 29
2024 Impact & Sustainability Report - Governance - Client Collaboration: Driving Shared Value - page 28
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