Turning climate action into a competitive advantage

Sustainability is at the top of the agenda of CEOs around the world. Climate change, in particular, has become a matter of public concern and shareholders are calling on companies to take action to set targets and reduce greenhouse gas emissions. Integrating climate transformation into business strategy and decision-making remains one of the biggest challenges for companies.

What is the role of digital solutions in supporting sustainable transformations?

From a digital point of view, the question is often “where to start and how to follow the change”? Going forward, non-financial sustainability data will be subject to the same scrutiny as financial data. A system of record is needed for full auditability, and that’s where an enterprise solution like SAP comes in with a holistic and robust portfolio for sustainability. Foundational solutions like S/4 HANA EHS Environment Management can deliver immediate business value to global enterprises, by providing granularity, transparency, accuracy, and auditable records. This SAP solution is essential for:

  • Embed sustainability processes into operations with automated or manual collection, validation, calculation, approval, exception and change management with clear audit trails
  • Gain real-time visibility into operational and asset-related emissions and provide business insight to understand key drivers and levers to reduce emissions and meet targets
  • Generate on-demand operational reports and automated internal or external reports on emissions, energy, water, waste or other pollutants

In addition to the business perspective on operational emissions, there is a rapidly evolving requirement to report Scope 3 emissions. downstream often constitute more than 80% of their total emissions. Due to the nature of how Scope 3 emissions are calculated, there is considerable overlap with “product” focused emissions.

How can businesses stay ahead of the game and turn goals into results?

The emissions intensity of “Products” is often used in the purchase selection process. It is also a measure that can be used for its own benchmarking or that can be requested by customers. This is precisely where SAP Product Footprint Management has a vital role to play. This solution is unique in its ability to collect existing business data from SAP processes such as inventory, finance or transportation to calculate product emissions at scale.

Together, these two climate change solutions from SAP are essential building blocks that deliver continuous simplification, innovation and lower total cost of ownership (TCO). It also powers holistic steering and reporting solutions, such as SAP Sustainability Control Tower, which supports the broader roadmap for environmental, social and governance (ESG) transformation.

Could pioneers create a competitive advantage?

Looking to the future, various push-and-pull mechanisms are causing a sea change to improve the accuracy of value chain emissions. There is an incentive to capitalize on consumer demand for verified “green” products. There is also financial and business risk for latecomers, due to regulations such as EU-CBAM. Both will require the sharing of real, verified emissions data across company and industry boundaries. By adopting these fundamental climate change solutions from SAP, companies are taking their first steps towards a sustainable transformation journey fit for the future.

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