Skip to main content
Skip to footer
We're taking you to another TCS website now.



  • The IT infrastructure demands of BFSI firms have led to higher emissions, forcing companies to prioritize sustainable IT operations.
  • Measuring the carbon footprint of IT firms is key to reducing emissions and such accounting spans the entire life cycle of sourcing, operations, and disposal.
  • We recommend three strategic pillars for BFSI firms to reduce their carbon footprint—green hardware, green software, and green actions. However, real change is only possible when sustainability and green practices are embedded into the organizational DNA.



The BFSI industry made net-zero commitments following the Paris climate agreement.

IT operations are a major contributor of emissions in the BFSI industry. Moreover, the increasing use of mobile and online banking, the switch to cloud operations and shared service models, as well as compliance mandates are only increasing IT infrastructure demands translating into higher emissions, forcing firms to shift to sustainable IT operations. We analyze the evolving IT requirements of firms and highlights the need to reduce the carbon footprint of BFSI firms’ IT operations. We also present a framework to measure and mitigate adverse environmental impact.

Greening IT operations in BFSI organizations: A pressing priority

The banking, financial services, and insurance (BFSI) industry is an IT-intensive sector, given banks and insurance firms’ substantial reliance on IT infrastructure for business-as-usual operations.

This dependence is constantly increasing due to growing regulatory demands, pressure to launch new digital offerings to effectively compete with emerging fintech players, rising cybersecurity requirements, and the need to maintain mammoth data repositories to support quick decision-making. IT in BFSI is thus all pervasive and the second biggest cost element, next only to staff costs. In our experience, IT accounts for 10-20% of the overall operating expenditure.  

High-speed transaction processing still dominates banking and insurance business operations, justifying sophisticated data centers. Coupled with regulatory obligations, this has resulted in BFSI firms running their own data centers. However, due to continuously rising IT demands, banks and insurers are rationalizing IT infrastructure and applications. Big data requirements, hybrid data centers, and the need for improved security are shaping the future IT needs of BFSI firms. Lowering IT operational costs has become a priority for firms instead of one-off initial cost reduction, especially as a plethora of options are available in the IT supply landscape. In our experience, run-the-bank (RTB) needs spanning core systems, business intelligence, enterprise systems, risk management, sales support, and customer connect account for 70% of IT spends while change-the-bank (CTB) requirements covering data analysis, evolving regulatory mandates, digitalization demands, and business innovation make up the remaining 30%. 

The objective of the BFSI industry is to reverse this ratio by increasing spends on CTB operations due to market pressures and client needs. Furthermore, as CTB initiatives involve greater dependence on cognitive solutions, energy consumption will also rise. Given the net-zero commitments made by BFSI firms, deploying energy-efficient infrastructure has emerged as an imperative. To accomplish this, firms will need to assess their carbon footprint, define a strategy to move toward net-zero, and institutionalize sustainability by embedding it into their organizational culture.

Measuring carbon footprint in the BFSI industry

Accounting for the carbon footprint of firms is key to reducing it—what cannot be measured cannot be managed.

Carbon footprint accounting must span the entire life cycle of sourcing, operations, and disposal. This type of accounting helps banks and insurers measure scope 1 or direct emissions from their own operations, scope 2 or indirect emissions from purchased utilities, and scope 3 or indirect emissions from the organization’s value stream. Given scoping is relative to the pegged entity, effective measurement will require an assessment of the carbon accounting value stream (see Table 1).


Table 1: Carbon accounting value stream

BFSI firms’ data center operations account for scope 1 emissions and the energy that they source from utilities account for scope 2 emissions. As firms embrace green cloud models, they will account for scope 3 emissions. However, scope 3 emissions data will also need to be sourced from multiple service providers, system integrators, and commercial off-the-shelf (COTS) solution providers. Scope 1 and 2 emissions of such service providers will be the reference point for scope 3 data for BFSI firms. While measuring scope 3 emissions, firms must limit accounting to their own transactional specifics with upstream or downstream partners. To arrive at net energy consumption, BFSI firms will also need to factor in renewable energy usage and recycling. Also, it will be prudent to amortize the carbon emissions for a fixed number of years based on usage across the asset lifecycle (see Figure 1).


Figure 1: End-to-end carbon accounting

Greening IT operations

Once firms complete their carbon footprint assessment, they must define a strategy or framework to reduce the negative impact of their IT operations.

The three essential pillars for reducing carbon footprint and facilitating a shift to green IT operations are green infrastructure, green software, and green actions (see Figure 2). The first refers to the hard platforms that banks and insurers use, the second to the software deployed, and the third to the green practices associated with people.


Figure 2: Green IT framework

Green infrastructure

Firms must implement intelligent infrastructure encompassing resource optimization, modernization, and green transport. Specific initiatives can span space and equipment optimization, better run-time of IT resources, use of software driven networks (SDNs), hosting in nano centers, and more. In a connected world, collaborative working decreases the carbon footprint by saving on redundancy. Cloud operations, circularity tie-ups, remote work options, and green procurement are a few initiatives that can help. 

Asset life cycle management is critical to greening. It is therefore imperative for banks and insurers to lay down policies for re-use, repair, and recycle of IT assets and ensure effective management across their life cycle. Holistic energy management involves preventing energy leaks, adopting green practices such as using energy only when needed, and facilitating on-demand auto scale up as required. 

Green software

Software is the invisible energy consumer in IT operations. Firms must embrace green architecture spanning green coding practices, removal of dead code, process optimization, data management, compatibility, green software development life cycles (SDLC) with rationalized business requirements, shift-left approach, and automated development test cycles. Green IT initiatives must also encompass green deployment including rationalization of resources, optimization, and a shift to newer models such as containerization, serverless architectures, virtualization, and automatic deployment. 

Software asset life cycle management is also an important step. Phasing out energy-consuming legacy applications and striking an effective balance between launching new, greener assets and upgrading or greening existing legacy assets is essential. Greening software will demand a proactive approach to creating future applications—an approach that embraces green principles, tools and guidance, and lays down energy budgets for building applications. Fixing the energy hotspots in business-critical legacy applications is risky and time-consuming. Where legacy applications are identified for phase out, it would be redundant to green them.  

Green actions

Green actions encompass accessibility and inclusion, paperless operations, and behavioral change. Ensuring inclusivity in offices and application design, going paperless by expanding the use of collaborative tools, optimizing mail traffic and reducing or eliminating document printing, and driving behavioral change by encouraging the use of green transport and green materials can bring down the carbon footprint.

Institutionalizing green IT

Approaches and frameworks can go only so far.

The real game changer will be institutionalizing sustainability and embedding green practices into the organizational DNA—a tall task indeed. While carbon footprint reduction has emerged as a compulsion due to net-zero commitments made by banks and insurers, the age-old demands of application performance, business and operational efficiency, and customer experience, cannot be ignored. Some critical points that must be kept in mind while defining a strategy for carbon footprint reduction include: 

  • Ensure buy-in from top management and all the stakeholders.  
  • Reduce carbon footprint at source by prioritizing energy efficiency across the procurement and design phases of infrastructure and operations.  
  • Facilitate behavioral change through awareness and motivational pursuits. 
  • Rationalize the application landscape.
  • Adopt alternative deployments and resource optimization in successive energy kernels before touching the core software. 
  • Baseline energy consumption to determine the quantum of improvements.
  • Use automated and/or smart tools to manage the change.  For example, using code analyzers to detect energy leaks will help in early detection and rectification. Similarly, adopting applications to capture scope 3 emissions of suppliers and internet of things (IoT)-based sensors, energy measurement tools for baselining, and establishing energy efficiency as a key parameter in procurement decisions will quicken the pace.
  • Adopt collaborative ways of working between men and materials, build consensus about the common goal, and ensure seamless communication to implement the strategy.


Green IT has gained the spotlight in the BFSI industry given net-zero commitments made by banks and insurers.

IT requirements, however, are transforming as firms embrace boundaryless mindsets and evolve into smart, cognitive businesses to multiply business outcomes. New business models, new execution models, and multi-dimensional approaches to drive sustainable growth will soon be the norm in the industry. As firms embark on multi-faceted transformation, embedding sustainable practices into business models will be key. Banks and insurers must design and implement green IT strategies as sustainability will soon be a critical factor in retaining customer goodwill given the importance the millennial and Gen Z cohorts attach to the planet’s well-being.  


Let’s connect!

For more information on TCS' Banking, Financial Services, and Insurance (BFSI) unit, visit,, and