SAP Community - Sustainability

The What Is... The Why To... The How To... of: ESG & SAP & Enterprise Blockchain 🚀

2024-03-21T15:21:10.356000+01:00

What is ESG ?

ESG is "Environmental, Social, and corporate Governance" and revolves around how well an Organisation is performing across these three pillars. The stronger an Organisation is across these pillars, the higher the Organisation's ESG score or rating will be.

What is an ESG score/rating ? For me it's like when I go on Booking.com or AirBnB to find an apartment or hotel for a family holiday, I am looking for the properties which have the highest rating. This is how it is with ESG, the ESG score shows the Organisation's rating across these dimensions, "Environmental, Social, and corporate Governance", where we would expect, the higher the score, the more we can trust the Organisation.

And ESG is more than that, as @James_Marland describes in the blog Your Ledger is about to go Green the European Union is on a journey bringing legislation and "are going to ask companies to maintain a second set of books, that run in parallel to the traditional ledgers, and that’s a set of books called the Green Ledger".

ESG scoring takes a holistic view of the Organisation:

Holistic View on Sustainability Performance – Example WEF SCM Framework

[thanks to @gunther_rothermel and his ESG Performance Management blog]

For me,

ESG is about Data.

Why to do ESG ?

There are hard reasons and softer reasons, the softer reasons are elaborated in more detail below, but the hard reason for doing ESG, the reason we cannot be avoided, is European legislation, and to repeat, so that we don't miss it, as @James_Marland describes in the blog Your Ledger is about to go Green the European Union is on a journey bringing legislation and "are going to ask companies to maintain a second set of books, that run in parallel to the traditional ledgers, and that’s a set of books called the Green Ledger".

ESG (“Environmental, Social, and corporate Governance”) concerns are playing a greater role in investment decisions and hence corporate decision making.

Part of the ESG framework is scoring Organisations to measure how they are performing against ESG standards.

ESG scoring helps to provide a standardized way to quantify an Organisation’s ESG impact, and is consumed by:

Consumers of ESG Ratings - atkrypto.io

In her blog, @annchristinschechter , the report describes it like this:

The Situation: Sustainable Business is the 3rd Wave of Global Economic Transformation

Investors, shareholders, regulators, and consumers all demand responsibly derived products
and services with a smaller environmental footprint. Reducing global emissions,
waste, and social injustice requires a full-lifecycle approach with enterprises at the forefront.

Wittwer Reichel Knoedler - Sustainability within SAP Premium Engagements

Going back to the, Booking.com or AirBnB to find an apartment or hotel for a family holiday analogy, in the same way as a properties with lower ratings attract less interest, the time will soon be upon us when Organisations with lower ESG scores will be at a disadvantage compared to those with higher scores.

That and social responsibility is Why To Do ESG.

For me, again,

ESG is about the Data, and if the Data is so important, then we need to be able to Trust the Data.

How to do SAP, ESG, and Enterprise Blockchain

The ESG score is an example of the circular economy. The key to the score is the Data, the Data coming from in most cases the Edge, from Sensors and Things. As shown in the picture below, the Data from the Edge needs to be stored safely and securely so that it can be processed by the SAP Sustainability Control Tower:

SAP - ESG - IoT - Enterprise Blockchain - atkrypto.io

SAP by the way, have a portfolio of Products to enable Enterprises to do ESG, and these include:

. SAP Sustainability Footprint Management

. SAP Sustainability Data Exchange

. SAP Sustainability Control Tower

In this blog we are focusing on protecting the integrity and originality and confidentiality of Data which is used to do ESG scoring and rating, Data which would then be consumed by for example the SAP Sustainability Control Tower.

There are two related challenges to overcome when collecting data for ESG scoring. The first comes in two parts: simply collecting the data in the first place, since there may be large numbers of sensors and systems (consider carbon emissions across a supply chain, and the myriad vehicles, vessels, machines and people involved); and moving that data fast enough that decisions can be made using it (which we’ll use as the definition of “real-time” in the rest of this blog)

The second challenge is that with any measurement system, the measurement is only as reliable as the data collected. This opens a “trust gap:” organisations have incentives to increase their ESG score: how can we be sure of the validity of the data they’ve collected? Similarly, how can they be sure of the data their subcontractors have collected?

Investors are increasingly demanding ESG Audits of target Organisations, and it’s likely the requirements of ESG scoring become stricter. Being able to demonstrate that an Organisation’s ESG data collection methods are beyond reproach is likely to represent a significant business advantage, along with benefits of reacting to this data in real time.

ESG Data Sources

ESG measurement data can contain Personal Sensitive and Business Critical information across the Corporate domains of:

ESG Data Sensitivity atkrypto.io

Data sources for this data come from all over the organisation: Enterprise Applications and Things (sensors, monitors and connected applications at the edge), including ERP systems, HR systems, Sensors measuring CO2 levels and Water Quality.

In this blog we’ll take as an example data from Waste Trucks proving responsible disposal of Corporate waste, to see just how many sources of data there are and how to address the challenges this creates.

ESG Example Sources of Data - atkrypto.io

ESG Data Security

In terms of the NIST CIA Triad for Data Security, Criticality, Integrity, Availability, ESG measurement data comes in Very High across all three classifications.

NIST Triad Data Security Sensitivity Confidentiality Integrity Availability - atkrypto.io

As the ESG performance rating is so critical, data measurements which are used need to be auditable and the integrity of the data completely trustworthy, so the highest level of data security and integrity protection is required.

To address the “trust-gap”, it is essential that it can be proven that the ESG measurement data cannot be interfered with and can be trusted. At the same time, the ESG measurement data needs to be available to a number of Enterprise Applications for it to make any actionable change.

Enterprise Architecture saves the day...

So, this is where Enterprise IT comes in to save the day and solve the problem.

The business requirement is for:

. Data from any source needs to be Stored as close to the source of the Data as possible

. The source of the Data can be Edge / IoT / Mobile Things, and can also be ERP and Enterprise Software Applications

. The Data needs to be stored with the highest level of integrity and originality and confidentiality and sensitivity protection

. The Data store solution should be available out of the box in a commercial off the shelf product

. The Data must be stored Immutably

As discussed in the previous blog, [SAP Enterprise Architecture: Positioning Blockchain Database as an Enterprise Technology Standard 🚀] when we look in to our Enterprise Architecture Technology Standards we see there is only 1 Technology Standard in the Enterprise which is positioned with the capabilities to fulfill all of those requirements out of the box, and that is the, Enterprise Blockchain Platform and Enterprise Blockchain Databases.

Comparison Enterprise Blockchain Database and Traditional Legacy Database - atkrypto.io

Why Enterprise Blockchain Database for securely storing ESG measurement data ?

As we described in the first blog in this series, [Why I love SAP and Blockchain Databases and why you should too 🚀], there are four characteristics which make Blockchain natively the most secure data storage.

These are:

atkrypto.io what is a blockchain

A Blockchain can only be called a Blockchain if it has these characteristics, the point being that once data is entered in a blockchain it cannot be altered or deleted. This provides trust in the data, so that, for instance, ESG auditors know that if a measurement is calculated from data held in a Blockchain, they can trust that the data hasn’t been adulterated while being stored.

In the following Enterprise Blockchain Platform for ESG deployment example scenarios we have data coming from multiple data sources, some of which are at the Edge/IoT and some are Enterprise Applications in the DataCenter or Cloud. At the same time data which is being written to the Enterprise Blockchain Database can originate from multiple Organisations which are sharing the same Enterprise Blockchain Platform and Database as a common shared single source of truth.

ESG Comparison Enterprise Blockchain Database and Traditional Legacy Database - atkrypto.io

The immutability of blockchain data is what enables trust between what otherwise might be competing organisations.

Example 1, Single Enterprise Blockchain Database within your Organisation for ESG Data

In this example, an Enterprise is storing ESG data to its Enterprise Blockchain Platform.

ESG data is originating from multiple sources as shown in the diagram:

ESG Example Sources of Data - atkrypto.io

Imagine an Enterprise subcontracting the disposal of its electronic waste. For ESG compliance the Enterprise needs to make sure that its waste carrying vehicles aren’t tempted to take short cuts in personnel management or the disposal, but must also verify the subcontractor is upholding their standards, too.

Data can be used from the Waste Truck’s GPS and onboard cameras to prove both where the waste was disposed of geographically through the GPS data and physically through the photographic evidence from the Truck’s on board cameras. Think about how delivery drivers photograph where they’ve left a parcel.

The collection of this data is enabled either by SAP Advanced Event Mesh, which spans geographies and environments such as On-Premise, Cloud and all the way to the Edge, connecting the Waste Truck to Enterprise Applications such as Route Planning, HR management, Scheduling and other operational systems as well as the Enterprise Blockchain Database Edge Tenants and the Enterprise Blockchain Database Server Tenants.

All this data, including the photographs, are stored on the Enterprise Blockchain Platform Database, the photographs will be stored as Enterprise NFT’s in the Enterprise Blockchain Wallet.

Next generation data integrity protection is Enterprise Blockchain Platform on SAP BTP Kyma - the secure data backbone - atkrypto.io

Example 2, Single Blockchain shared across Organisations for ESG Data

This example is where the real beauty of the Distributed Ledger Technology is brought in to focus.

Enterprise Blockchain Platform Database as a shared single source of truth across Organisations.

In this example the Enterprise Blockchain Platform is running Blockchain Database Tenants in your Organisation and also in your Partner Organisations. This enables the Enterprise Blockchain Database to provide an irrefutable shared single source of truth for data across Organisations, who normally would not openly trust each other with data.

ESG Data from 3rd Party Organisations Enterprise Blockchain Shared Common Single Source of Truth - atkrypto.io

Your Organisation outsources industrial waste collection and responsible disposal to a 3rd party Organisation.

Your ERP system orders the 3rd Party Waste Processor to collect and dispose of industrial waste.

For your Organisation’s ESG data, you depend upon evidence that the 3rd Party Organisation is responsibly disposing of the waste.

The Enterprise Blockchain Platform Database enables a shared single source of truth to be created across the Organisations by running inter-connected Blockchain Server Nodes in both Organisations.

SAP ESG Blockchain Shared Single Source of Truth across 3rd Party Organisations - atkrypto.io

In the above example, the Enterprise Blockchain Platform Database is running across Organisations.

Your Organisation is writing data to the same Enterprise Blockchain Database as your 3rd Party partner Organisation.

The Enterprise Blockchain Database contains evidence from your S/4HANA ERP system that the 3rd Party Waste Processor was ordered to process your industrial waste.

In the same Enterprise Blockchain Database the 3rd Party Waste Disposal Organisation is storing evidence from the Waste Trucks that the waste was collected from your premises and disposed of responsibly at the authorised waste treatment center.

This scenario opens a new world of opportunities for multiple Enterprises to share data, multi-Enterprise collaboration, with the Enterprise Blockchain as the irrefutable common shared single source of truth across Organisations.

The most beautiful thing about the picture above is that we have an Enterprise Blockchain Database shared across 3rd party Organisations, this achieves a few things:

. Saves a huge amount of effort to integrate the IT systems of the two 3rd party Organisations

. Enables both Organisations to write Data to the same Enterprise Blockchain Database

. Enables both the ESG Customer Organisation to read the Data from the Enterprise Blockchain Database into their SAP Sustainability Control Tower to enable ESG Reporting

. Enables both Organisations to be able to trust the Data in the Enterprise Blockchain Database

. Enables both Organisations to know that neither Organisation can modify the Data in the Enterprise Blockchain Database

. Enables both Organisations to know that their shared Data is being protected to the highest level natively out of the box of any Database Product

Wrapping Up

To wrap up, a simple reminder,

The Digital Transformation of Information Security is Enterprise Blockchain

Enterprise Blockchain is the Next Generation Data Integrity, Originality, Confidentiality Protection

Enterprise Blockchain, Enterprise Distributed Ledger Technology is re-imagining information security

With regards to ESG,

ESG is about Data

ESG is about the Data, and if the Data is so important, then we need to be able to Trust the Data

If we need to be able to Trust the Data, then we need to put it on to the Enterprise Blockchain as the irrefutable common shared single source of truth across our Organisation and other Organisations

Enterprise Blockchain is both a Secure Store and a Secure Communication Channel.

This blog is the fifth in the series, the previous blogs are here, here, here and here.

We will be describing more use cases for this scenario in future blogs, including for example the Insurance use case, where the Carrier, the Broker, and the Customer are on the same Enterprise Blockchain.

As McKinsey & Company, in their December 2023 Featured Insights Publication, gave a beautiful description of what is unique and special about Blockchain, "Blockchain is a secure database shared across a network of participants, where up-to-date information is available to all participants at the same time".

The good news is, as we discussed in the previous blog, this is no longer hype, we can do all of this today, and now, within the SAP Partner Edge Open EcoSystem there are enabling technology Blockchain Products designed and built by SAP Experts specifically for the needs of SAP Customers to make doing Blockchain and SAP easy, and so you can do SAP and Blockchain, today it's real and there's nothing stopping you.

So what are we waiting for ? Oh yeah, more use cases, ok, that will continue in the next blog

What do you think, are the words Blockchain, Web3, Distributed Ledger Technology, starting to appear in your Company's visions and technology visions ? What use cases are you looking at ? Let's chat about it in the comments.

Credits: Tom Fairbairn Distinguished Engineer at Solace contributed to this blog. We will be following this blog up with a deeper Technical Architecture dive into getting the Data and how SAP Advanced Event Mesh is positioned in the Solution Architecture for publishing the real time ESG Data and Enterprise Blockchain is positioned for Protecting the ESG Data, Event Driven Blockchain, Publish & Protect.

For now, over and out. 🚀

Andy Silvey.

Independent SAP Technical Architect and CEO of atkrypto.io

Author Bio:

Andy Silvey is a 25 years SAP Technology veteran [15 years SAP Basis and 10 years SAP Tech Arch including Tech, Integration, Security, Data from 3.1H to S/4HANA PCE on RISE and the BTP and everything in between, and former SCN Moderator and Mentor alumni].

Andy is also co-Founder of atkrypto inc, an startup whose ambition is to make Blockchain easy for Enterprise.

atkrypto.io's flagship product is the atkrypto Enterprise Blockchain Platform for SAP, and atkrypto.io is a SAP Partner Edge Open EcoSystem Partner.

The atkrypto Enterprise Blockchain Platform for SAP has been designed by SAP Independent Experts for the needs of SAP Customers and to be deployed on the SAP BTP Kyma Runtime Service and leverage native integration to SAP Products.

atkrypto Enterprise Blockchain Platform for SAP has a number of unique qualities, including being the only Blockchain software in the world which has a DataCenter version and a light mobile version which can run on Edge/IoT/Mobile devices and enables data to be written to the Blockchain at the Edge where that same Blockchain is running on a Server in the DataCenter, protecting the integrity and originality of data from the Edge to Insights. Taking Blockchain to the Data at the Edge instead of taking the Data to the Blockchain.

Marketability Assessment of Compliance Disclosures

2024-03-25T12:10:15.676000+01:00

My 2nd favorite German word is Lieferkettensorgfaltspflichtengesetz, also known as LkSG which is a German law that requires corporate due diligence obligations in supply chains. It requires companies, based on number of employees and turnover, to take responsibility for ensuring that human rights are respected, social, and environmental standards are upheld, and risks of violations are minimized throughout their supply chains. More background information can be found here.

You can assess products and raw materials against compliance requirement versions based on the Compliance Disclosure compliance pattern in the Marketability Assessment - Compliance Disclosure app. The system determines the compliance status based on due diligence acts at the product level by propagating compliance requirements from the product level to the raw material level and calculating the compliance status along the product structure. This is done based on the certificates provided by the suppliers, we will see an example in a screenshot.

Behind the scenes all this data is integrated in the basic compliance data and in managing compliance purposes. While the product is the highest level, these compliance disclosures provide product marketability approval for supplier materials. The compliance assessments are then completed on the intermediate and product levels in addition to the raw materials. Color coding makes it easy to identify which processes are complete with proper disclosures, which are in progress, and which are incomplete.

The first step is creating a compliance purpose with the compliance requirements needed. Then we want to manage our basic compliance data for an unpackaged product.

After picking our product, we want to add a new compliance purpose for our due diligence acts the German LkSG and Great Britain Modern Slavery Act.

We select our compliance purpose and click OK.

We change over to the Product Compliance Event, and we can see that the due diligence acts are there, and the system has completed the processing, and the status is now set to completed.

In the Compliance Assessments we see, on the product level, which supplier declarations are missing for the new compliance requirements recently added.

Looking into one of the compliance requirements, we can see which supplier declarations are missing.

Now we choose the supplier which we want to update, or we can create a new one in the Process Compliance Disclosures for Suppliers app.

Here we see the templates created by the system for the Master Data Specialist to complete.

Here we see the dialog for creating and processing a response.

We enter the compliance requirement versions, set the status, and can add a remark. Then we can attach the supplier provided certificates with the proper information.

Here we see the completed compliance declarations with the attachments.

We can now see the updated status and the task progress. We can check each for more information.

Here we see all the related information on the compliance assessment.

Now we see the update in the marketability assessment as well. This can also be seen on the raw material level too.

Finally, we can gain insights into compliance disclosures from supplier information through the new Analyze Supplier Compliance Disclosures app.

The Compliance Disclosure compliance pattern calculates the marketability status of products and raw materials based on the compliance disclosures that have been completed for the assigned suppliers. First, the system propagates compliance requirements from the product level to the raw material. Then the system calculates the compliance status for products along the product structure, starting at the raw material level. Additionally, the system transmits this marketability status to related compliance views, such as unpackaged products containing the assessed raw materials. To enable such assessments, this feature also allows you to assign compliance requirements based on the Compliance Disclosure compliance pattern to compliance purposes.

Conference News - SAP for Energy and Utilities

2024-03-26T12:03:22.832000+01:00

In just five weeks, SAP global energy and utilities communities will gather again in the stunning city of Seville for the SAP for Energy and Utilities Conference to exchange expertise, expand their knowledge base with customers, partners, and peers, and build their professional network.

In this newsletter edition, we're equipping you with all the necessary information to make your trip fruitful. We've identified key sessions, outstanding exhibition highlights, and exciting social events that you won't want to miss. We've prepared a series of videos and blogs to give you a taste of what's to come.

The conference focuses on a broad array of pivotal topics, such as SAP S/4HANA, RISE with SAP, Asset Management and Customer Experience, Distributed Energy Resources, Smart Metering, and Sustainability, delving into specific industry sectors like Oil & Gas Upstream and Downstream, Water, and E-mobility.

Prepare for a deep dive into the industry's future, with a particular emphasis on the transformative role of AI.
Get ready to be inspired, challenged, and enlightened in equal measure!

Subscribe to the SAP Bulletin for Oil, Gas, and Energy

Visit the Conference Website

How to create a custom basic metric in SAP Sustainability Control Tower

2024-03-26T14:52:36.420000+01:00

Today, the SAP Sustainability Control Tower comes with around 85 out-of-the-box preconfigured sustainability metrics that are classified into 4 ESG areas: Environmental, Social, Governance and Economic. If you need a sustainability metric that is not available out-of-the-box, the solution currently offers two approaches for creating new sustainability metrics: Basic and Advanced.

The Basic creation of metrics is done outside of the Calculation and Processing Engine (CPE), while the Advanced option allows for more complex calculations and requires the use of the CPE.

In this blog post, we will focus on the creation of a new custom Basic metric.

When creating a new custom Basic metric, you can select between 2 calculation methods:

Sum
Weighted Average

We will demonstrate here how to create a new custom Basic metric for each of these 2 calculation methods.

Our example scenario is:

A metric to record the number of hours of usage of a fuel-based electric generator.

First, we will detail the steps you need to follow to create the new custom Basic metric using the calculation method “Sum” and then we will detail the steps needed if using the calculation method “Weighted Average”. You will find a detailed description of what to do in each screen below but, to summarize, creating a custom Basic metric involves:

Creating the new metric in Manage Metrics App in SAP Sustainability Control Tower (steps 1 to 4 below)
Using CPE process template to upload and persist the metric data from a local file (steps 5 to 18)
Activating the new metric tile in Manage Metrics App in SAP Sustainability Control Tower & associating it to an Ambition (steps 19 to 27)

Let’s jump right into it:

Using Calculation Method “Sum”

1. In SAP Sustainability Control Tower, open the Manage Metrics app, located under Data Management and Integration.

2. Select “Create Sustainability Metric”.

3. In the pop-up, start by defining a “Title” for your new sustainability metric. In “ID”, we recommend you start the “ID” for your custom metric with “Z_”. In this example we are setting the “ID” as Z_HRSGEN. Select an “ESG Area” and select Type “Basic”. Please note that, for a Basic metric, you cannot choose “Measures used” nor “Dimensions used”. Next, select Calculation Method “Sum”. Then select the appropriate “Unit of Measure”. In our example, we are using “Unit of Measure” as “Hour”. Optionally, enter a Description. Once you are done, click on OK.

4. Imediatelly, you will see a message informing that the new metric is created and you can proceed by clicking on “Open CPE Environment” to upload data for the new metric.

5. In the CPE environement, we recommend starting by expanding the left and right panels by clicking on the color palette icon on the left side of your screen and in the filter icon on the right. From the left panel, click to drag the process template “Actuals - create new records for basic custom metrics” and drop it in the middle of your screen.

6. Now, on the right panel, you need to change the Process State to “Deployed” and then click “Save” in the “General” section of the menu bar at the top.

7. To start working on the deployed process, click on the first blue box for task number 1, “Data upload”. Then click the icon for “Show” in the “Tools” section of the top menu.

8. What you see now is the Data Provider Interface (DPI) screen where you will upload the metrics data from a CSV or XLSX file from your local drive. To prepare this CSV or XLSX file you can export a template from the “Import & Export” section in the top menu.

9. After exporting the template from menu option “Import & Export”, open the downloaded file in your local computer and fill it with the required data. In column A, enter the metric ID defined in step 3 of this guide. Please note that, for a Basic metric with calculation method defined as “Sum”, you don’t need to fill in any data in column C for “Sustainability metric value weight (KF_VAL_WEIGHT_CHAR)”. Additionally, note that columns H to M refer to Leading Hierarchy types, those being “Business Location”, “Company Code” and “Organization Unit”. Fill in the data for at least one type of Leading Hierarchy. It is optional to fill in all of them.

10. Once the data file is ready and saved in your local drive, go back to the DPI screen and click the “Upload file” button in the “Import & Export” section of the top menu.

11. Select the file from your local drive, then in the Data Upload popup that will come up, click on “Run”.

12. After a moment, you will see the data reflected in the DPI interface.

13. Feel free to close the DPI tab now.

14. Back in the CPE main screen, you can now flag the task “Data Upload” as “Completed” by clicking the “Complete” button in the “Actions” section of the top menu.

15. Next, in the process template, click to select task number 2 “Initiation of data validation” and click to “Run” in the “Tools” section in the top menu. The run is completed when the small progress bar on the “Run” button disappears. Then, you can flag the “Initiation of data validation” task as “Completed” by clicking on the “Complete” button in the “Actions” section of the top menu.

16. To review the results of data validation, click to select the next task in the process template which is task number 3 “Review of results” and click on “Show” in the “Tools” section of the top menu. A DPI screen will open in a new tab. If you see the message “No results. Too many filters may be applied.” that means no errors were picked up during data validation. Feel free to close the DPI tab and set the “Review of results” task as “Completed” by clicking on the “Complete” button in the “Actions” section of the top menu.

17. To wrap up the process working in the CPE, you need to complete the next three tasks from the template. All you need to do is to select one, click “Run” in the “Tools” section of the top menu, and wait until the progress bar disappears from the “Run” button indicating that the “Run” action is completed. Flag the task as “Completed” by clicking the “Complete” button in the “Actions” section of the top menu. Repeat these steps for the remaining tasks, them being “Data persistence vectors”, “Data persistence data points” and “Clean-up”.

18. Feel free to close the CPE tab in your browser after the above steps are completed.

19. Back in the Manage Metrics app, you can search for your newly created custom Basic metric in the Sustainability Metrics list. The next step is to configure the metric to show as a tile in the Home page of SAP Sustainability Control Tower. In the Manage Metrics app, use the different filters or search by the title of your new metric using the Search box to find your new metric. Click on the new Basic metric to expand its details on the right side of your screen.

20. Now you’ll find a “Configure” button on the top right side of your screen. Click it to configure your new Basic metric.

21. Set “KPI Tile” and “Ambition” to “Active”. Once you set “KPI Tile” as “Active”, the “Ambition” will automatically be set to “Active” as well. Here, you can also select the preferred “Leading Hierarchy” to display the data considering the data provided during upload. In our example data, we have both Business Location and Company Code, so we could leave the “Leading Hierarchy” as Business Location or change it to Legal Entity. When done, click to “Save”.

22. Click the SAP logo on the top left corner of your screen to navigate back to the Home page of SAP Sustainability Control Tower.

23. The tile for your new Basic metric is now displayed.

24. By clicking the new metric tile on the Home page, you will be redirected to the “Our Ambitions” app. To make your newly created metric appear there, it must be associated to an Ambition. To do that, click “Add Ambition”.

25. In the popup, select your new sustainability metric and fill in the required fields, then click the button “Add Ambition”.

26. The newly created metric is now showing in “Our Ambitions” app and to visualize the metric’s detailed data, you can click on “Drill Down”.

27. Select a “Time Granularity” and expand the Leading Hierarchy on column “Name” as prefered. You will see the measures displayed as a Sum of the data provided according to the Time Granularity and Leading Hierarchy.

Using Calculation Method “Weighted Average”.

What changes if you want to use the calculation method “Weighted Average”?

1. In step 3 of the full process detailed above, you could define a different “ID”, such as "Z_HRSGENAVE”. You would have to select Calculation Method “Weighted Average”, and when you do that, for “Unit of Measure”, you can select “Percentage” or “Not defined”. At the moment there are no other options of “Unit of Measure” for a custom metric of calculation method “Weighted Average”. In our example, we are using “Unit of Measure” as “Not defined” and making a reference in the “Title” of our new metric that our data is calculated in hours. Once you are done, click on OK.

2. In step 9 of the full process detailed above, you would have to take care to fill in data in column C of the DPI template for “Sustainability metric value weight (KF_VAL_WEIGHT_CHAR)”.

3. The rest of the steps will be the same, and in the end you’ll get your new Basic metric tile in the Home screen of SAP Sustainability Control Tower.

4. When you create a new Ambition for this new Basic metric, you will be able to see the Weighted Average results according to the “Time Granularity” and “Leading Hierarchy”.

5. To create a custom Basic metric of Calculation Method “Weighted Average” and use “Unit of Measure” as “Percentage”, you must provide the values in decimal format in your uploaded data file. For example “0.1” for 10%.

Further information on Basic Metrics is provided in the SAP Help Portal: Basic Metrics

Don’t Get Fooled Into Climate Change Complacency

2024-04-01T14:53:13.498000+02:00

A cold snap in the Ticino, on the border of Switzerland and Italy, on the slopes overlooking Lake Lugarno, resulted in a specifically poor spaghetti crop. The last few weeks of March have been a worrying time for the spaghetti farmers. There is always a chance of late frost which, while not entirely ruining the crop, does have an impact on the flavor which makes it difficult to obtain top prices on the world markets.

Another reason for the failed crop lies in the increase of the Spaghetti weevil, a tiny creature that has decimated crops in the past. Of course, spaghetti cultivation in Switzerland is nowhere near the size of the Italian industry and the vast spaghetti plantations in the Po Valley, but a bumper or failed crop can still significantly impact the prices paid on the global market based on supply and demand.

Yes, it’s April 1st and this story is based on another story first shown on April Fool’s Day in 1957 on the BBC current affairs program Panorama (check it out here, it is well worth a watch).

It’s a stark reminder that if we ignore climate change, it will make a fool of us all.

Here are a few alarming climate change examples from 2023 that are no joke:

When a Bomb cyclone hit California in early 2023, excessive flooding (after years of drought) affected imports, exports, transportation and damaged crops all over the state.
In July, India announced an exportation ban on non-basmati white rice due to rising prices and fear of shortages due to El Nino disruptions.
The Sriracha hot source shortage was “hot” on social media. This was due to poor jalapeno crops in Mexico, which relies on water from the Colorado river which was depleted.
Panama Canal water levels were also very low which is putting at risk the estimated 40% of consumer goods transported between Northers Asia and the east coast of the USA.
In October you could read about a sugar shortage due to droughts in India, and floods in Brazil! This was compounded by a poor sugar beet harvest in Europe.

Be part of the solution not the problem

It’s imperative that companies make sustainability central to their overall business strategy. To begin the process, business leaders must examine all functions of their network and identify sustainability weaknesses within and outside of their organization.

For example, supply chains are a major contributor to waste and carbon emissions and are therefore a major area of opportunity for improvements. Creating measurable goals to improve a company’s supply chain (e.g., eliminating single-use plastics within the next 18 months, or becoming carbon neutral by 2030,) can restore the confidence of customers, investors, employees and other stakeholders that the organization is making active strides to become more sustainable.

But setting goals is one thing and meeting them is another. Supply chain leaders must make sure they are accounting for and managing climate-related emissions across all parts of their supply chain (Scope 1,2 and 3), which includes suppliers, contract manufacturers, logistics service providers and other trading partners.

This is no small feat – a lack of visibility across a company’s supply chain is typically the reason why business leaders struggle to manage the total carbon footprint of products. By employing technology to provide the visibility they need to see across their supply chain, business leaders can then take actions to reduce their company’s end-to-end carbon footprint.

To learn more about how to get your business ready to enable a risk-resilient and sustainable supply chain, download the recent Oxford Economics Research.

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SAP Sustainability Footprint Management: Q1-24 Updates & Highlights

2024-04-09T11:12:52.036000+02:00

We kicked-off 2024 with adding many more useful features and functions to SAP Sustainability Footprint Management. This blog post continues my quarterly series and gives you an overview of some of the highlights and an outlook to our plans for the current quarter. I’m covering:

Form-based Calculation for Waste Generated in Operations
Publish Footprints for Carbon Data Exchange
Footprint Calculation Updates
Emission Factor Management Improvements
Transportation Enhancements
Purchase Order Integration
Q2-24 Outlook
Additional Updates & Information

Form-based Calculation for Waste Generated in Operations

With the release of the calculation of GHG Scope 3.5 Waste Generated in Operations, we also introduced an exciting new capability within SAP Sustainability Footprint Management: The form-based data collection for calculating corporate and product footprints. While the ERP-centric approach of leveraging your existing transactional business data is still one of the key value propositions of the product, we’re now adding new flexibility. It’s now possible to enter data about business activities, such as waste, directly into the system by filling in forms. And while it was also possible before to enter and allocate emissions manually, this new approach brings much more functionalities and allows you to analyze your waste emissions at a higher level of granularity, including by waste type, company, and period.

After setting up the required user roles, you’re ready to import waste master data. These master data objects are categorized into Waste Treatment Methods and Waste Types. Standard content is provided for the treatment methods, and you can add custom methods as well. The waste types however aren’t standardized, and you therefore need to import your specific waste types. As with all master data, this import is done in the Import Master Data app, where you also find the respective Excel templates.

In the next step, you need to configure your footprint scope. As you’re now entering data via forms instead of using replicated transactional data, you need to enable this form-based data collection in your footprint inventory scope. This is done in the Manage Footprint Inventory Scope app, where you can add new scopes or edit existing ones. Besides the Value Chain Steps, you now also find a new section to activate the Form-Based Data Collection for the respective forms and GHG categories. Here you can enable the form for Waste Generated in Operations and enter a text for Data Collection Guidance. This text will be visible to the business users who are entering the data and can give them guidance or other relevant information.

Now, you can define your waste footprints in the new Manage Waste Footprints app. This app allows you to input CO2e emission data for different waste types and treatment methods. The data, which can vary by location and time, is used for later calculating the associated GHG emissions based on waste quantity. The app streamlines the process of setting up waste footprints and assigning emission values, eliminating the need for the Manage Mappings app in this scenario. You can choose between three calculation methods, which provide guidance on the kind of emission factor data needed for footprint calculations: Average-Data uses average emission factors and average quantities of waste, Waste-Type-Specific uses emission factors particular to types of waste and treatment methods, and Spend-Based focuses on the amount of money spent on the waste disposal methods instead of waste quantities. Regardless of the method chosen, the basic calculation remains the same, consisting of a quantity or amount and an emission factor. The respective emission factors can be selected from the LCA data maintained in your system, there’s also default content available from the U.S. Environmental Protection Agency (EPA), you find more information on this content package later in this blog post. Alternatively, you can also enter the CO2e amount directly.

Manage Waste Footprints

In the next step, the form-based data collection can be set up and used by the business users within your company to record GHG data. In the new Manage GHG Data Collections app, you’re selecting the inventory scope and period, and you can also exclude plants from the data collection. Now, personas like a plant manager who’s supporting sustainability can access the Record GHG Data app, to manage the GHG data they’re responsible for. In the app, you can record data on the waste volume or waste disposal cost for each plant or import data using a template. The system will flag if a value is 30% different from the previous period. After providing the necessary guidance notes and saving, the data recording for the plant is completed.

Record GHG Data: Waste Generated in Operations

After the form is completed, you can check the data collection and calculate footprints. In the Calculate Footprints app, we added a new tab Data Readiness that shows you the required data types and their data recording progress. By clicking on the data types, you can directly navigate to the respective apps and see the details on the data collected. When the completion status is 100%, the footprint inventory can be calculated.

Calculate Footprints: Data Readiness

The final stage is to analyze emissions that you just calculated. The new analytical app Waste Generated in Operations provides all insights on the emissions from third-party disposal and treatment of waste. You can view and analyze your Scope 3.5 emissions in a chart and in tabular format and also break those down to the required level and dimension. The calculated emissions are also rolled up and included in the existing analytical apps and charts, so that they’re for example visible in the overall Corporate Footprint Overview.

For a better understanding of the form-based approach and how you can calculate your waste generated in operations, we published a scenario guide in SAP Help to guide you through all the required steps: Form-Based Data Collection for Waste Generated in Operations. We’ll further extend this form-based approach to all GHG categories in the upcoming months, as you can also see in the Outlook section of this blog post. Stay tuned for more details and information to come!

Publish Footprints for Carbon Data Exchange

While it’s possible since a while already to retrieve primary emission data from suppliers directly (see SAP Sustainability Footprint Management: Q3-23 Updates & Highlights), it’s now also possible on the outbound side to publish product carbon footprints. Through the integration with SAP Sustainability Data Exchange, our solution for standardized carbon data exchange across your entire supply chain, footprints can be accessed and displayed, and shared with your customers directly. Alternatively, there’s also an API available on SAP Business Accelerator Hub: Published Product Footprints. With this API, any consuming application can retrieve the footprints for carbon data exchange.

The publishing of footprints applies to finished and semi-finished products and can be done via the new Publish Product Footprints (Carbon Data Exchange) app. The app also supports the PACT consortium's format for carbon data exchange (version 2.1.0). It involves selecting a product type and filling in all required information in the Calculation and Methodology Details section and the Assurance section (if applicable). You can also add multiple emission factor sources that were used in calculating footprints. Once the information is saved, the chosen products become available for preparation, with averages calculated based on the chosen period. Footprints then assume the Prepared status and move to the Prepared Footprints tab, where data can be further edited if necessary. You can now publish one or more products from this tab. Published footprints can be viewed in the Published Footprints tab and are available for carbon data exchange. Footprints can also be deleted, however this doesn’t remove them from any external application that has consumed the footprints. For more information, see Using the Publish Product Footprints (Carbon Data Exchange) App in SAP Help.

Publish Footprints for Carbon Data Exchange

Footprint Calculation Updates

We also provided some updates and enhancements of the footprint calculation and its configuration. Last quarter already we introduced Calculation Variants, that provide you with more flexibility in setting up the calculation methods. You can now also choose how to calculate footprints for specific business transactions by setting the footprint determination method. This is done in the Manage Calculation Variants app and won’t only give you more flexibility but will also lead to fewer errors in the calculation. You can customize the calculations based on different parameters, such as previous period's calculations, the plant/product, or plant/product/supplier combination. When multiple settings are chosen, calculations are applied based on the sequence provided in the table. In case of any inconsistencies, the system will reflect an error. For more information, see Using the Manage Calculation Variants Application in SAP Help.

Manage Calculation Variants: Product Footprint Determination

Another update we did in the footprint calculation is to enable the use of a product as input for its own production. This applies to all footprint inventories containing products that are self-reliant in their production process. For example, if the production of steel demands steel as an input in numerous steps, the new algorithm can factor in this cyclic dependency. As a result, it provides the overall CO2e value for the product, accounting for both its input and output quantities.

For setting up the calculation, we further extended the data import through file uploads: When creating organizational footprint inventories in the Calculate Footprints app, file upload is now also available for importing energy bill information as well as manual emissions.

Emission Factor Management Improvements

To simplify and speed up the configuration of SAP Sustainability Footprint Management, we’ve added default content for emission factors. In the Manage Emission Factors app, you now have access to Scope 1 (Stationary Combustion), Scope 2 (Purchased electricity, steam and heat), and Scope 3.5 (Waste Generated in Operations) factors from the GHG Emission Factors Hub provided by the United States Environmental Protection Agency (EPA). There are pre-configured data packages available with 2023 and 2024 data. Check SAP Help for more information and details on the available data: Using Data Published by the U.S. Environmental Protection Agency.

For creating own data packages and uploading LCA data from any content provider, we also updated the Excel template in the Manage Emission Factors app. The current version is now SAP Simplified LCA (v3) and provides more clarity on the fields. Note that the previous versions (v1 and v2) can still be uploaded, ensure to select the correct version of your file when creating a new data package. See SAP Help for more information: Using the Manage Emission Factors Application.

To improve the user experience, we also added a consistency status of all uploaded entities in a data package, based on each entity in the dataset. Error messages will guide you to the location of the error and provide you with a possible fix.

In the Manage Purchased Products Footprints app, it’s now possible to reference emission factors in file uploads. In the Excel template, you can now directly refer to your uploaded LCA data by entering the Package ID, Package Version, and Dataset Source ID fields. More information is available on SAP Help: Using the Manage Purchased Product Footprints Application.

Transportation Enhancements

In the area of transport emission calculations, we further enhanced the existing capabilities. You can now configure the distance calculation method of transportation legs. The system automatically calculates the distance for air and road transport using the Great Circle Distance (GCD) approach, measuring the shortest path between two points on the surface of the earth. However, you can also calculate those legs with the Shortest Feasible Distance (SFD) method, which measures distances taking into consideration various constraints that may affect the actual route taken, such as terrain, traffic patterns, and available transportation infrastructure. By entering the corresponding distance in the respective field and selecting SFD as the calculation method, this distance is then used for emissions calculation. For sea, rail, and inland waterway transports, it is necessary to manually enter the distance of the leg and specify the method used to calculate the distance. Find more information in SAP Help: Manage Data: Legs.

The manual creation of ZIP codes is now also possible: In case a ZIP code isn’t found in the database, you can manually create this code and assign the longitude and latitude information in the Manage Data application for your transport footprint calculation. For more details, see SAP Help: Manage Data: Locations.

To simplify the import of data, you can now download templates for all objects in the Manage Data app. Those templates contain descriptions, a read-me, and explanations with examples. An enhanced import flow further streamlines the whole process.

Additionally, the View Shipment Reports app is available in an updated design. While the roles and functionalities remain the same, you’ll benefit from an enhanced User Experience to get insights into your shipments and the corresponding transport emissions. More information on this app is available on SAP Help: Using the View Shipment Reports Application.

Purchase Order Integration

One of the key benefits of SAP Sustainability Footprint Management’s ERP-centric approach is the possibility to integrate the calculated footprints back into the connected SAP S/4HANA Cloud or SAP S/4HANA system. An overview of the integration possibilities can be found in my blog post Deep Dive: Footprint Integration with SAP Sustainability Footprint Management. In the area of Sourcing and Procurement, footprints could be integrated into Purchase Requisitions since the initial release already. With the SAP S/4HANA Cloud 2402 release, this integration was now also enhanced to Purchase Orders (PO).

In the Manage Purchase Orders app, the CO2e footprint of a PO item can be found at the header level of the item detail page when the SAP Sustainability Footprint Management business function is active and the calculated footprints have been published to SAP S/4HANA. Additionally, the CO2e footprint is displayed in the item table of the Purchase Order app and the Display Purchase Order app, as well as in a number of value helps. For more information, see SAP Help: Manage Purchase Orders.

Footprint Integration into Purchase Order in SAP S/4HANA Cloud

Q2-24 Outlook

There are many exciting features and functions on which we’re currently working and that we plan to release in SAP Sustainability Footprint Management in the second quarter of this year. In the following, I’ll go into some of the highlights. As always, have a look into SAP Road Map Explorer for an overview of all planned innovations and which benefits those will bring to you.

The focus topic for this quarter is the enhancement of the guided calculation of the corporate carbon footprint. It involves defining manual business activity data for GHG scope categories by location and allocating activity-based and spend-based emission factors to this data. GHG forms will be generated based on this manual data, and data collection for the forms will be managed. The aim is to calculate GHG scope category footprints for the business activity data and integrate the calculated results with analytics capabilities. This will simplify corporate carbon footprint calculations, making it easier for non-experts to collect data and also support our customers in closing data gaps.

By also including spend-based emission factors, we’re planning to offer more flexibility in the calculation of Scope 3 emissions, in the absence of activity data. This will allow you to conduct efficient GHG protocol compliant calculations, conduct sensitivity analysis, identify key improvement areas, and encourage comprehensive corporate footprint consideration.

The first GHG Scope 3 categories, which will leverage this new concept, are planned to be business travel (3.6) and employee commute (3.7). With regards to downstream emissions, we first plan to deliver the calculation of emissions related to the use of sold products (3.11).

Another exciting innovation that we’re working on is powered by SAP Business AI: With the intelligent emission factor mapping, we plan to provide automated and transparent mapping suggestions of ERP business activities to sustainability factors from LCA databases. With this feature, we’ll minimize manual effort, enhance data quality, and increase data throughput.

Additional Updates & Information

At this year’s SAP Sapphire, happening in June in Orlando and Barcelona, we’ll also showcase all our SAP Sustainability products and innovations. You’ll get insights on the value of our portfolio and our exciting plans, and you’ll hear from our customers, how our products are supporting them on their sustainability journey. If you can’t make it on-site, don’t worry and sign up to SAP Sapphire Virtual, free of charge! Besides all announcements and many livestreams and recordings of keynotes and sessions, you can also watch interviews and a demo of our AI-powered sustainability solutions for calculating and reporting corporate carbon emissions – from data collection to ERP-centric calculations, towards a Green Ledger.

We’re also happy to announce that Matsumoto Precision has successfully implemented SAP Sustainability Footprint Management. Our software will enable Matsumoto Precision, a leading industrial component manufacturer, to provide their customers with detailed and actual product-level emissions data, allowing for unprecedented transparency in their sustainability efforts.

For in-depth details on SAP Sustainability Footprint Management, including concepts, setup, and the application help, I recommend you browsing through the SAP Help Portal. For an overview of all new features and functions that have been released, check the What’s New section, which is updated with every new software release.

For exploring and experimenting in a live system, register for the free SAP Sustainability Footprint Management Trial. You’ll receive an e-mail with access information within seconds after your registration and can then test the solution at your own convenience within a 30-days trial period. It also includes a wide range of guided tours designed to help you navigate through all the features and functions comprehensively.

If you want to learn more about the product, check out our SAP Learning Journey: Taking Action on Climate Change with SAP Sustainability Footprint Management. This eLearning includes three comprehensive courses, each consisting of multiple units. These units will provide you with a general overview and introduction, detailed information on system setup and configuration, and thorough training on all apps used for calculating, monitoring, and analyzing sustainability footprints. The training is interactive, featuring numerous hands-on simulations and exercises. Upon successful completion of the program, you’ll be rewarded with a Record of Achievement and a digital badge.

To stay up to date on SAP Sustainability Footprint Management, follow me here in the SAP Community. In regular cadence, I’ll publish blog posts giving you updates on all the product’s new features and functions as well as deep dives into the product capabilities. I’m also looking forward to engaging with you directly, feel free to leave your feedback in the comment section.

Join and innovate with the SAP Enterprise Support Advisory Council (ESAC) Program

2024-04-11T10:43:38.796000+02:00

co-author: Bruno Cherqui

The SAP Enterprise Support Advisory Council provides immense value by bringing together a select group of customers to collaborate with SAP experts and provide valuable insights and feedback on the development, improvement, and optimization of the SAP Enterprise Support program. Through this collaboration, members have the opportunity to influence SAP's support offerings, gain early access to new tools and resources, and actively shape the future direction of SAP's support solutions.

The program is open to all SAP Enterprise Support customers at no additional cost (but limited capacity) and is covering all major SAP cloud solutions such as SAP S/4HANA, CX, BTP, SAP SuccessFactors HCM, ISBN, Cross Solutions topics.

New open workstreams for Q2:

Continuous Quality Check (CQC): Transformation Assessment for Sustainability
Continuous Quality Check (CQC): Transformation Assessment for SAP Integrated Business Planning
Continuous Quality Check (CQC): Deployment Readiness for SAP SuccessFactors HCM Suite EXPANSION
Expert-guided Implementation (EGI): SAP Datasphere Fundamentals (Data and Analytics)

Find an overview of all our workstreams running in Q2 here.

To express interest, ask a question or join the program: contact us via esac@sap.com.

For more information you can also refer to our ESAC landing page on the SAP Support Portal.

Your SAP Enterprise Support Advisory Council team

esac@sap.com

SAP Sustainability Data Exchange: Your Key to a Sustainable Supply Chain

2024-04-17T21:02:09.517000+02:00

Last fall I wrote a blog introducing SAP Sustainability Data Exchange, a solution that enables you to digitally request carbon footprint data from your trading partners. Your suppliers can then respond digitally within the application through a form-based request and respond feature. The most promising and compelling part of the solution is the fact that companies can move from using estimated values to generating highly accurate data from suppliers for their footprint calculation.

Today, I will bring you up to date with a number of developments that have occurred in the last six months with respect to the SAP Sustainability Data Exchange (SDX) solution.

First, to recap.

Scope 3 emissions not only make up a majority of your emissions, but also are ‘not owned or controlled by the reporting organization,’ according to the EPA Center for Corporate Climate Leadership. The organization goes on to ascertain that ‘Scope 3 emissions, also referred to as value chain emissions, often represent the majority of an organization’s total greenhouse gas (GHG) emissions’, as much or more than 70 percent of a business’ carbon footprint. Therefore, it is necessary to collaborate with your suppliers and other trading partners to affect any change in your carbon emissions along your value chain. You simply cannot do this alone.

A Sustainability Data Exchange Refresher

The SAP Sustainability Data Exchange (SDX) application allows organizations to communicate about, measure, and manage Scope 3 emissions information in the supply chain, by the sharing of product carbon footprint data with respective trading partners. The data exchanged complies with common standards, such as the World Business Council for Sustainable Development’s Partnership for Carbon Transparency (WBCSD PACT) and is officially certified by a Catena-X conformity assessment body so carbon values can be delivered in a trusted, auditable way. The application is both interoperable and industry-agnostic.

SDX enables you to measure Scope 3 emissions, moving from averages to actuals using an interoperable, cloud-based, industry-agnostic approach that drives scalability, standardization, and trust in carbon data exchange across your supply chain.

SDX meets regulatory requirements across different regions (e.g., European Green Deal, Batteries Directive, Supply Chain Act, etc.) and allows for an identification of CO2 reduction opportunities in products and processes to enable target setting and optimization in scenario planning. Not only does the solution enable companies to enhance and uphold their own brand reputation and value through the targeting of scope 3 emissions, but also it supports suppliers and trading partners across the supply chain to accelerate their own decarbonization journeys.

Recent Innovations with SAP Sustainability Data Exchange

As mentioned above, the data exchanged complies with the WBCSD PACT standard. We are therefore delighted to announce that SDX is a PACT/WBSCD conformant solution.[1] This means that the SAP Sustainability Data Exchange solution is conformant with the technical specifications of the Partnership for Carbon Transparency (PACT) framework of the World Business Council of Sustainable Development (WBSCD). PACT seeks to accelerate decarbonization by creating transparency on emissions in the value chain. It establishes a standardized methodology and technology infrastructure for the precise and primary measurement of Scope 3 emissions, facilitating data exchange.

In addition, we are excited to announce that the integration of SAP Sustainability Data Exchange and SAP Sustainability Footprint Management has been completed. SAP Sustainability Footprint Management is the SAP solution that calculates your carbon footprint on a corporate or product level, while SAP Sustainability Data Exchange is the engine that enables peer-to-peer communication to exchange data and messages. This integration enables you to quickly gain visibility into the full picture of your carbon footprint at scale, with calculations that integrate supplier data and existing business data. Together, you have a powerful combination.

Your suppliers can provide a more accurate footprint value, simply because they are aware of the origin, procurement, and production processes of a given material or component and are not limited to average database values. These data are then seamlessly pushed to the SAP Sustainability Footprint Management solution, where they are then used to calculate the total footprint of the manufactured product. This integration enables you to generate carbon footprint documentation with confidence, act to decarbonize your business processes, and illustrate progress through granular transparency.

The last update is that you can quickly and easily access SAP Sustainability Data Exchange on the SAP Store. There is free membership for your suppliers, so there is no need to hesitate. Access the solution here.

Get Started

Together SDX and SFM can provide you with significant and unique value. Get started today to address your supply chain emissions that are likely the largest component of your Scope 3 emissions. Embark on a journey to get actionable insights into your Scope 3 emissions by moving from averages to actual supplier data. Not only will you enable holistic corporate footprint initiatives, but also you can run sensitivity analysis of different organizational footprint inventories to identify relevant areas for enhancing towards activity-based calculations.

What are you doing today to address scope 3 emissions? Let us know in the comment section below. If you need more information, visit us online.

[1] PACT | PACT Conformant Solutions (carbon-transparency.com)

SAP Intelligent Clinical Supply Management goes CTS Europe 2024 – our key insights

2024-04-18T11:41:33.341000+02:00

What can be more enriching than meeting with customers, sponsors, and vendors to learn about current market dynamics, and to understand their challenges and pain points around clinical supply management?

This is why the SAP team took the opportunity to attend CTS Europe in Barcelona, where we delved into discussions on emerging industry trends. In this blog post, we will share the key takeaways from the conference and shed light on the exciting developments shaping the future of clinical supply in general and SAP Intelligent Clinical Supply Management in particular.

Sustainability

One topic that was prominently discussed across all workstreams was sustainability. With clinical trials emitting 100 million tons of carbon per year, this topic deserves closer attention. Also, the conference's organizers attached so much importance to sustainability that they dedicated the opening keynote to it, which would have been unimaginable some years ago. In his keynote, Novartis’ Development Environmental Sustainability Lead revealed various steps in the study life cycle where a reduction of carbon emissions can be achieved and how sustainability also needs to be balanced with supply urgency. Highlighted factors included application of decentralized trial elements, reduction of on-site monitoring visits, re-usable shipping boxes and avoidance of frontloading of the sites.

Another fundamental factor, however, is to reduce inventory overage and wastage in clinical supply chains which can be achieved by an improved clinical planning considering actual enrollment and dispensing figures for clinical supplies replenishment. Here, advanced clinical trial supply management software can help to simulate multiple planning scenarios and to forecast the actual demand more accurately at the sites. And of course, this allows for the combination of sustainability goals with financial savings as a significant outcome.

Another session highlighted the impact of intelligently organizing supply pooling. In combination with JIT labeling to apply the latest available shelf-life, this approach can help to reduce overage by up to 40% (e.g., by reducing the amount of drug product needed, by reducing the number of shipments, ...).

A smart combination of the different approaches described in the various sessions might allow to save millions of tons of CO2, while still being able to conduct cutting edge clinical research to help patients overcome disease and achieve a better quality of life.

Collaboration

Given the increasingly complex technology landscape and cost pressure being present from all sides, the need for collaboration and flexibility across the clinical supply chain was emphasized multiple times. With clinical supply management being a puzzle of different software solutions and tools, it becomes clear that breaking down data silos by integrating all different parts of the puzzle is crucial. And the trend of outsourcing several parts of the clinical supply chain to Contract Development and Manufacturing Organisations (CDMOs), such as manufacturing, packaging, labeling and distribution, adds even more to the need for a smooth collaboration and greater visibility between all parties.

This also became obvious in many discussions at our booth with both vendors and sponsors where we recognized a huge need for standardized processes and interfaces to break down data silos and to enable a seamless integration of the different software systems that are used in the clinical supply ecosystem. One take home message for us, therefore, was to continue and to even strengthen our current strategy of building strong partnerships within the ecosystem to drive the adoption of harmonized processes and data/messaging standards.

Panel discussion with DHL, Roche, and Novartis on Clinical Supply Chain Orchestration

A definite highlight of the conference was our participation in a panel discussion, with our consortium members DHL, Roche, and Novartis, on how to enable clinical supply chain orchestration globally. Everybody in this round agreed that a true spirit of collaboration between sponsors and vendors is key and that we need to move from custom one-to-one connections to a business network projecting the complex clinical supply ecosystem. Successful network orchestration will allow more flexibility for integrations and eventually add value across global supply chains.

Artificial Intelligence

What would a conference be without addressing the topic of artificial intelligence in these times? Of course, integration of artificial intelligence (AI) and machine learning (ML) in clinical trial supply management was also a prevailing topic at CTS Europe which was addressed in several sessions. And it was great to see how well this topic connects to the other mentioned trends in clinical supply – collaboration and sustainability. Only an orchestrated collaboration and better integration will lead to better data quality and smooth data flows, which can serve as a good foundation for AI use cases. And to come full circle, attendees were encouraged to leverage AI to make informed decisions in their demand planning and forecasting to predict inventory overage and expected wastage which will lead to a more sustainable clinical supply chain.

The clinical supply chain for sure has a long way to go to become fully digital, agile, and resilient, however, we are optimistic that we are on the right path led by a common purpose to make patient lives better!

Meet us in person

In case you missed us at CTS Europe, the next chance to meet us is already waiting: From April 21st to April 24th 2024, the SAP Intelligent Clinical Supply Management team is awaiting you at GCSG US. Besides from meeting us at our booth you can already look forward to our Vendor Showcase on Clinical Process Transformation with Cloud & Artificial Intelligence (Day 4, 1 pm). Let’s connect and shape the future together!

Green Public Finance Management, Part 3: Including the concept of Green PFM in SAP Solutions

2024-04-24T10:46:09.290000+02:00

As the urgency of mitigating climate risks and adapting to climate change measures rises, the awareness and openness for change in budget processes rises as well.

SAP knows the importance and need for sustainability. It is part of its mission and culture. The commitment goes beyond rhetoric—multiple technological solutions have already been crafted to strengthen sustainability initiatives, with ongoing efforts dedicated to advancing this cause. “SAP Cares” to transform sustainability challenges into resilient opportunities by taking the first steps from ERP to ESG.

In 2023, SAP made significant strides by integrating finance with sustainability initiatives, introducing "financial-grade accounting to carbon accounting." This innovation seamlessly incorporates carbon accounting into everyday business transactions, marking a crucial step towards holistic sustainability management.

One of these solutions is the Sustainability Control Tower, which serves as an aggregated data foundation for comprehensive internal management and external reporting across all ESG dimensions. From there, SAP Sustainability Footprint Management empowers organizations to assess their environmental impact and emissions by leveraging data collected within the S/4HANA system. By integrating Sustainability Footprint Management with the SAP Sustainability Data Exchange, organizations can seamless sharing of sustainability insights both internally and externally. Building upon these achievements, SAP is confident to unveil the "Green Ledger," a finance solution aimed at furthering sustainability objectives.

The “Green Ledger” presents a roadmap that will bring CFOs significantly closer to address carbon as a crucial accounting dimension. A dedication to the Green Ledger will support organizations collecting, analyzing and managing sustainability data and assessing financial risks and opportunities. The groundbreaking prospect of recording Carbon Data within Finance marks an essential moment in the evolution of ERP, offering the opportunity to Reinvent the "R" in ERP. (see: Green Ledger: Where Carbon and Financial Accounting Unite).

Green PFM stands as an essential opportunity for SAP to enhance its solutions and integrate sustainable technologies. The commitment to incorporating eco-friendly practices is not just a vision; it's a substantial reality within SAP's current initiatives, which is why Green Public Finance Management should be of specific importance for the company. The extent to which SAP solutions currently supports Green PFM and the progress needed for full integration into the corporation remain key questions. The figure below provides a documentation on the Green PFM-related capabilities that various SAP products already contribute, highlighting not only existing foundations but also areas for further development.

As portrayed in the illustration, the introduction of the Green Ledger represents a significant breakthrough, consolidating various capabilities under one solution. This advancement enables the analysis of finance and sustainability data in the same dashboard, offering a comprehensive view across all dimensions. By integrating these functions, organizations can now address the complexities of Green Public Finance Management with greater ease and efficiency.

This is a special opportunity for businesses as with the Green PFM strategy aligns a broader global effort to mitigate climate risks and adapt to the impacts of climate change. It not only benefits individual organizations but also contributes to creating new jobs, raising economic resilience, and securing a safe and better future for all.

For a deeper dive into SAP's sustainability initiatives, including the innovative Green Ledger, explore the provided link. Stay informed of ongoing improvements and contribute to building a better tomorrow by joining the SAP Sustainability Newsletter. Your involvement matters to shape a more sustainable and resilient future.

Sources:

1: Aydin, Ozlem; Battersby, Brain; Gonguet, Fabien; Wendling, Claude. 2021. IMF: STAFF Climate NOTES. Climate-Sensitive Management of Public Finances-” Green PFM.” Found in: ”Green PFM” –IMF Staff Approach to Climate-Sensitive Management of Public Finances

2: IPSASB. 2022. Advancing Public Sector Sustainability Reporting. Found in: https://www.ipsasb.org/focus-areas/sustainability-reporting

Additional SAP Links that could also be interesting:

First Part of the Green PFM Series: Driving Sustainable Growth: The Role of Green Public Finance Management, Part 1: Understanding the C...

Second Part of the Green PFM Series: Driving Sustainable Growth: The Role of Green Publ... - SAP Community

Further Information on the Green Ledger and Carbon Accounting at SAP provided by @Stephan Mueller (Global Solution Owner for Finance and Risk):

The Path to Green Ledger - Discover how to Manage Sustainability with SAP (youtube.com)

How Transactional Carbon Accounting In The Cloud Revolutionizes Business (forbes.com)

More interesting "Public Sector" blogs:

A New Government Operating Environment: S/4 HANA Cloud for Public Sector | SAP Blogs

Public Sector Sales Plays:
GROW with SAP – Transform Finance and HR in Cities and Counties

More:
SAP Sustainability Navigator (ondemand.com)

SAP Sustainability for Financial Services - Portfolio and Solutions

2024-04-25T15:38:16.314000+02:00

As a customer advisor in the area of financial services at SAP, I am interested in bringing our portfolio closer to all interested parties. In my previous blog post, the current regulatory requirements in the area of sustainability for financial institutions in the EU were examined in more detail. But how can SAP help its customers with its portfolio? The SAP Sustainability Platform is an essential part of the overall SAP portfolio. That’s why in this blogpost I’d like to go into more detail of the holistic sustainability strategy at SAP and explain the portfolio for the financial industry.

But why does the topic of Sustainability matter to SAP in the first place?

On the one hand, all SAP customers worldwide contribute 87% of the global trade. This includes a large number of banks and insurance companies. For this reason, SAP is responsible for embedding sustainability with all its customers in order to make a lasting impact on the global economy. On the other hand, sustainability is a team sport! It is driven by regulators, investors and employees and therefore needs to be considered not only from a financial perspective. Implementing all aspects of sustainability requires a holistic approach within the company and an anchoring in all business processes and products. In a digitally driven world, systems, applications and programs support this integration of the sustainability strategy into all areas of the company.

To manage sustainability, business process technologies are needed to identify, quantify, analyze, and act on relevant data. To make this possible, the SAP Cloud for Sustainable Enterprises brings together a comprehensive solution portfolio that enables companies to manage sustainability performance holistically.

Figure 1: SAP Cloud for Sustainable Enterprises

The SAP portfolio is targeted at various industries and includes cross-industry solutions. To get an overview of the existing solutions for different use cases in the industries, you can use the SAP Sustainability Navigator.

As described in previous blog posts, the EU Taxonomy and CSRD address specific requirements for the financial industry. The requirements of the EU Taxonomy and CSRD are primarily targeted at the entity as such, including its business activities. However, financial institutions play a special role here. Firstly, financial institutions must look at internal activities related to for example buildings, waste, energy consumptions and workforce impacting environment, society or internal governance (Corporate Sustainability). On the other hand, financial institutions must focus on the impact on the environment and society caused by their products and services, such as loans or insurances (“Financed / Insured Emissions”). Specifically for the latter requirement, for example, the EU Taxonomy requires separate measures (Green Asset Ratio) and the CSRD again refer to other standards (PCAF), which in turn require specific key figures. However, to calculate these key figures, information is also required that arises in the value chain and is not publicly available, such as greenhouse gas (GHG) emissions from the investors or customers. This leads to challenges ranging from data retrieval to the management of the financial and insurance portfolio. With solutions in the area of “Holistic Steering & Reporting”, SAP provides answers to these questions.

Figure 2: SAP Sustainability Navigator - Example Banking

The “Sustainability Navigator” depicts two key solutions for the financial industry: “SAP Sustainability Control Tower” (SCT) and “SAP Profitability and Performance Management” (PaPM). However, as already described, “Holistic Steering” covers all business processes. Therefore, a selection of potentially relevant solutions from data retrieval to reporting for the financial industry is described below. The evaluation of the appropriate solution will however take place on a customer-specific basis. As shown in figure 3, the five following SAP solutions are in particular the focus for financial institutions.

SAP Business Technology Platform (BTP)
SAP Datasphere
SAP Sustainability Control Tower (SCT)
SAP Profitability & Performance Management (PaPM)
SAP Analytics Cloud (SAC)

Figure 3: SAP Sustainability Solutions for Financial Services

SAP Business Technology Platform (BTP)

SAP BTP is an innovation platform in the cloud optimized for a variety of SAP applications. Within the BTP different functionalities are combined in a central environment. The functions can be divided into the following five pillars:

Application development with low-code no-code functions
Automation
Integration
Data & Analytics
Artificial intelligence (AI)

Figure 4: Overview of SAP BTP

The BTP therefore offers a platform for various products and services that enables users to extend existing applications, create new innovations, or use database functions. For development teams to the business and sales, the BTP offers a wide range of possibilities.

The topic of sustainability is also firmly integrated into the BTP. In particular, to determine Scope 3 emissions, financial institutions need to gather information from capital- or policyholders to include them in the calculations of regulatory KPIs. This information, such as for example emissions caused by a funded project, is often not publicly available. With SAP Build functions on the BTP, the financial institution can, for example, design a template that must be filled by the customer or partner when the contract is signed. This external data is then stored directly in the database and can be processed in reporting subsequently.

The AI capabilities of the BTP also play a major role in the context of sustainability. In particular, AI functions on the BTP will be able to be used in the future for the creation of various reports and for mapping relevant emission factors.

Considered in the overall architecture, the BTP plays a key role here in the development of new innovations and the creation of customer-specific applications that can take on a supporting function and facilitates the subscription of additional Sustainability tools described in the following.

SAP Datasphere

SAP Datasphere, as the next generation of SAP Data Warehouse Cloud, is a comprehensive data services solution built on the BTP. SAP Datasphere enables a business data fabric architecture that can harmonize mission-critical data across the enterprise. The solution combines a wide range of capabilities such as data integration, cataloging, semantic modeling, and data warehousing for SAP and non-SAP data.

Figure 5: SAP Datasphere as part of SAP BTP

For most companies, the biggest challenge is the procurement and management of relevant sustainability data. Required information from customer and business partners (for example emissions), which were previously not covered by the respective contract, make it increasingly difficult for financial companies to obtain and manage sustainability data. For this reason, companies in the financial industry need reliable solutions that enable the identification, structuring, and traceability of data from different sources. In the area of sustainability, SAP Datasphere is therefore used as a central data warehouse solution to collect all relevant sustainability data and connect it from external systems. On the one hand, SAP Datasphere offers the option of creating a central data warehouse for all sustainability information, according to the customer’s wishes and architectural challenges. On the other hand, SAP Datasphere can already deliver predefined data models for specific sustainability information, which are then handed over directly to and consumed by SAP Sustainability Control Tower.

In addition to data retrieval and modeling from SAP and non-SAP systems, SAP Datasphere also supports the connection of external data from the “Data Marketplace”. The following image shows a selection of available emissions data to be obtained from the Data Marketplace. This includes, for example, emission factors, statistics, and emissions per capita, or for specific product groups.

Figure 6: SAP Datasphere - Data Marketplace - Examples for the Search Term 'Emission'

As part of the holistic steering, SAP Datasphere offers a wide range of options for collecting and preparing sustainability information. In the following, the tools for calculating and analyzing the quantitative sustainability information are explained.

SAP Sustainability Control Tower (SCT) and SAP Profitability & Performance Management (PaPM)

SAP Sustainability Control Tower is SAP’s central solution to address the regulatory requirements of the EU Taxonomy, CSRD, and ESRS and is, like SAP Datasphere, based on SAP BTP. SCT, as a central part of the SAP Cloud for Sustainable Enterprises, is a cloud-based solution that enables companies to monitor their operational performance in terms of sustainability and manage their business based on financial and sustainability-related metrics. In principle, the SCT follows the principle of holistic steering of a company in terms of sustainability. This means that all sustainability aspects (environment, society, governance) are consolidated from various sources in the SCT in order to calculate and display the key figures required by the regulatory standards and to steer the enterprise to a more sustainable company.

The SAP SCT is delivered with prefabricated and maintained content (“SAP Standard Content”). This includes, but is not limited to, calculation logics and reports for EU Taxonomy, as well as future CSRD reporting including ESRS. In principle, users can freely choose which of the metrics contained in the standard are to be used and which additional metrics are to be created. In addition, users can develop and build additional metrics and reports in the “Calculation and Process Engine” (CPE), for example, additional calculations or conversions.

Figure 7: SAP SCT Components

The metrics of the EU Taxonomy, CSRD, and ESRS are of particular importance to businesses in Europe. For this reason, the SCT already includes metrics and reports to calculate the quantitative requirements of the EU Taxonomy and the ESRS. Further metrics for the implementation of the quantitative requirements of CSRD / ESRS are currently under development and are expected to follow. A roadmap of the planned content in SCT can be found here.

As described in the beginning, there are special requirements for financial institutions with regards to key figures and data points to be disclosed. However, the financial-industry-specific key figures have not yet been delivered in the standard content of the SCT, but can be created on a customer-specific basis using the CPE. The CPE is compatible with SAP Profitability and Performance Management (SAP PaPM), which itself is also a key component of the SAP Sustainability Platform and plays a central role in the creation of financial-services-specific key figures for various sustainability standards.

SAP PaPM, based on the SAP HANA in-memory platform, was originally developed for detailed allocations at financial institutions, but for a long time, SAP PaPM has been an integrated performance management application for all industries and lines of business, including Sustainability. SAP PaPM Cloud is a next-generation performance management application that does not require its own data model but can reuse existing data and information models from other SAP and non-SAP applications. Building on the principles of the SAP Fiori user experience, the software is designed to run easily and comfortably by users.

In order to meet the financial-industry-specific requirements, the SCT and PaPM also offer so-called “Sample Contents” which cover various Sustainability use cases, such as quantitative ESRS requirements, as well as EU Taxonomy and TCFD requirements. The Sample Contents, shown in figure 8, can be used as a starting point for implementing further logics and metrics or as an example for a new implementation. New regulatory requirements or technical renewals are continuously rolled out by new versions of the Sample Content. However, if a new model is created with a Sample Content as a basis, this model is not affected by renewals of the content and can be adjusted by users or consulting services in the event of regulatory changes. SAP PaPM further has the flexibility to be used for use cases other than Sustainability and can for example combine Sustainability calculations with profitability models. For a complete list of the available sample contents in SAP PaPM Cloud, you may check the official SAP product page here.

Figure 8: Overview of SAP PaPM & SCT Sample Content for Sustainability

The ESRS Disclosure Management Sample Content, for example, can be used as the basis for calculating the quantitative information required by ESRS. This contains calculation logics for the quantitative requirements of ESRS E, S, and G, as well as reporting templates for individual KPIs and data points. Figure 9 shows an extract of the ESRS Disclosure Management Sample Content.

Figure 9: ESRS Reporting in SAP PaPM Cloud

The flexible modeling environment also offers the option of creating and linking any number of models for other sustainability aspects, as well as other use cases. Especially for the financial industry, it is possible to create quantitative information and scoring models, for example, as required by the PCAF. The flexible modeling environment in SAP PaPM Cloud enables, for example, the derivation of a specific data quality score, depending on the availability and accuracy of the data to be used.

Figure 10: Example - PCAF Scoring in SAP PaPM Cloud

SAP Analytics Cloud

With SAP SCT and SAP PaPM, SAP provides tools for calculating regulatory KPIs and voluntary quantitative information, as well as for ad-hoc reporting and simulation. However, an essential part of the holistic steering and reporting of sustainability lies in the integration of sustainability information into the planning and reporting of the entire company. As part of the Cloud for Sustainable Enterprises and part of SAP BTP, SAP Analytics Cloud (SAC) is a solution to those sustainability reporting challenges.

With a user-friendly interface, SAC addresses primarily business areas and management functions that want to manage and use various sustainability information in a structured way, for example, to represent regulatory key figures or deviations in targets. In the spirit of collaboration and as a prerequisite for sustainable action, self-service analyses can be used to identify and share actionable insights across the company. For example, the results of KPI calculations from SAP SCT or SAP PaPM can be presented in consolidated form.

Sustainable business requires not only the identification of the status quo and the disclosure of regulatory information, but should serve as the basis for overall corporate governance and planning. For example, the Paris Climate Target of 1.5° can only be achieved through forward-looking action. In this context, the SAC provides planning functions that enable sustainability information to be integrated into the entire enterprise planning.

Figure 11: SAP Analytics Cloud – Overview

Benefits of SAP Sustainability Platform

Sustainability is a team sport! To successfully implement a sustainability strategy, the collaboration of all lines of business of the financial company is required. For this reason, the SAP Sustainability Platform is aimed at all areas and stakeholders of the company. The platform enables the implementation of a variety of quantitative requirements, as well as the connection of different models with each other.

Furthermore, the SAP Sustainability Platform can be built on the existing IT architecture. Existing SAP and non-SAP data sources can be connected using predefined interfaces so that existing data can be used without replication at best.

Replication of data objects can be largely avoided as well on the SAP Sustainability Platform by reusing existing data objects from the SAP source systems. The existing data models and objects can be used, for example, directly for the calculations of different KPIs.

Finally, the SAP Sustainability Platform can grow incrementally. Individual modules that have been described can be introduced independently. Thus, for example, a partial use case of the CSRD can first be implemented (e.g. emissions from travel) to test the platform. This significantly minimizes the risk for the company.

This blog post outlined the existing tools of the SAP Sustainability Platform that can support the technical implementation of the sustainability strategy of financial companies. However, Sustainability is a cycle and will always bring new challenges and opportunities in the future. For example, SAP is already working on the treatment of Sustainability information exactly like financial data. The development of ‘ SAP Green Ledger’ and ‘Carbon Accounting’ has developed from this initiative. In further blog posts I will discuss other topics in the area of Sustainability in the context of SAP. Stay tuned!

Sources:

SAP at COP28

https://www.sap.com/sustainability/solutions.html

https://sustainability-navigator.cfapps.sap.hana.ondemand.com/

https://news.sap.com/2023/03/sap-datasphere-power-of-business-data/

https://www.sap.com/products/technology-platform/datasphere/features.html

SAP Datasphere – Data Marketplace – Example accessible via ‘Guided Experience’ https://guided-experience-datasphere.cfapps.eu10.hana.ondemand.com/dwaas-core/index.html#/marketplace_search

https://news.sap.com/germany/2023/02/nachhaltigkeit-fuer-unternehmenssteuerung-mit-sap-sustainibility-control-tower-sct/

https://help.sap.com/docs/SAP_SUS_SCT/21ecfb83f8d14e5982b7af315da5889a/3904fa967d1f4c3d928d2e719141b016.html?q=ESRS

https://help.sap.com/docs/SAP_SUS_SCT/0ec96e5804244b40b2adab7bbe20fcff/2d126df2aa704c3fadbf428a593c5c22.html?q=ESRS

https://help.sap.com/docs/SAP_PROFITABILITY_PERFORMANCE_MANAGEMENT_CLOUD

https://discovery-center.cloud.sap/serviceCatalog/sap-analytics-cloud/?region=all

SAP Sustainability für Financial Services - Portfolio & Lösungen

2024-04-26T11:47:51.773000+02:00

Als Customer Advisor im Bereich Financial Services bei SAP liegt mir etwas daran unser Portfolio allen Interessierten näher zu bringen. In meinem vorherigen Blogpost wurden die aktuellen regulatorischen Anforderungen im Bereich Nachhaltigkeit für Finanzinstitute in der EU genauer beleuchtet. Doch wie kann SAP mit seinem Portfolio seine Kunden bei der Umsetzung unterstützen? Ein substanzieller Bestandteil des gesamten SAP-Portfolios ist die SAP Sustainability Plattform. Aus diesem Grund möchte ich in diesem Blogpost näher auf die ganzheitliche Nachhaltigkeitsstrategie bei SAP eingehen und das Portfolio für die Finanzindustrie genauer erläutern.

Doch warum spielt dieses Thema für SAP überhaupt eine große Rolle?

Zum einen tragen alle SAP-Kunden weltweit zu 87% des Handels bei. Darunter auch eine Vielzahl an Banken und Versicherungen. Aus diesem Grund ist SAP in der Verantwortung, das Thema Nachhaltigkeit bei all seinen Kunden zu verankern, um damit die Weltwirtschaft nachhaltig zu beeinflussen. Zum anderen ist das Thema Nachhaltigkeit ein Teamsport! Es wird durch Regulatorik, Investoren, Kapitalgebern und Mitarbeitern getrieben und muss aus diesem Grund nicht nur aus der finanziellen Perspektive betrachtet werden. Die Umsetzung aller Aspekte der Nachhaltigkeit erfordert einen ganzheitlichen Ansatz im Unternehmen und eine Verankerung in allen Geschäftsprozessen und Produkten. In einer von Digitalisierung getriebenen Welt, unterstützen Systeme, Applikationen und Programme die Integration der Nachhaltigkeitsstrategie in alle Bereiche des Unternehmens.

Um Nachhaltigkeit zu steuern, werden Technologien für Geschäftsprozesse benötigt, um relevante Daten zu identifizieren, zu quantifizieren, zu analysieren und entsprechend zu handeln. Um dies zu ermöglichen, vereint die SAP Cloud for Sustainable Enterprises ein umfassendes Lösungsportfolio, das es Unternehmen ermöglicht, die Nachhaltigkeitsleistung ganzheitlich zu steuern.

Abbildung 1: SAP Cloud for Sustainable Enterprises

Das SAP-Portfolio ist auf verschiedene Branchen ausgerichtet und umfasst branchenübergreifende Lösungen. Um einen Überblick über die vorhandenen Lösungen für verschiedene Anwendungsfälle in den Branchen zu erhalten, kann der den SAP Sustainability Navigator genutzt werden.

Wie in vorherigen Blogposts bereits beschrieben, gelten für die Finanzindustrie spezielle Anforderungen durch die EU-Taxonomie und die CSRD. Die Anforderungen der EU-Taxonomie und der CSRD richten sich primär an das Unternehmen als solches, inklusive seiner Geschäftsaktivitäten. Finanzinstitute nehmen hier jedoch eine besondere Rolle ein. Zum einen müssen Finanzinstitute die Nachhaltigkeit ihres eigenen Unternehmens betrachten (Corporate Sustainability). Zum anderen liegt der Fokus die Finanzinstitute auf den verursachten Emissionen durch ihre Produkte und Services (‚Finanzierte / Versicherte Emissionen‘). Speziell für diese Anforderung werden beispielweise durch die EU-Taxonomie separate Kennzahlen gefordert (z.B. Green Asset Ratio) und die CSRD verweist auf andere Standards (PCAF), die wiederum separate Kennzahlen fordern. Zur Berechnung dieser Kennzahlen werden jedoch auch Informationen benötigt, die in der Wertschöpfungskette entstehen und nicht öffentlich zugänglich sind, wie zum Beispiel Treibhausgas (THG)-Emissionen der Kapitalnehmer. Damit verbunden ergeben sich Herausforderungen von der Datenbeschaffung bis hin zur Steuerung des Finanz- und Versicherungsportfolios. Mit Lösungen im Bereich ‚Holistic Steering & Reporting‘ gibt SAP Antwort auf diese Fragen.

Abbildung 2: SAP Sustainability Navigator – Beispiel Banking

Im abgebildeten ‚Sustainability Navigator‘ werden zwei zentralen Lösungen für die Finanzindustrie aufgezeigt: ‚SAP Sustainability Control Tower‘ (SCT) und ‚SAP Profitability and Performance Management‘ (PaPM). Wie bereits beschrieben umfasst ‚Holistic Steering‘ jedoch alle Geschäftsprozesse. Daher wird im Folgenden eine Auswahl relevanter Lösungen von Datenbeschaffung bis hin zu Reporting für die Finanzindustrie beschrieben. Die Evaluierung der entsprechenden Lösung erfolgt jedoch auf kundenspezifischer Basis. Wie in Abbildung 3 dargestellt, stehen insbesondere die fünf folgenden SAP-Lösungen im Fokus von Finanzinstituten.

SAP Business Technology Platform (BTP)
SAP Datasphere
SAP Sustainability Control Tower (SCT)
SAP Profitability and Performance Management (PaPM)
SAP Analytics Cloud (SAC)

Abbildung 3: SAP-Nachhaltigkeitslösungen für Finanzdienstleistungen

SAP Business Technology Platform (BTP)

Die SAP BTP ist eine Innovationsplattform in der Cloud, optimiert für eine Vielzahl von SAP-Anwendungen. Innerhalb der BTP werden verschiedene Funktionalitäten in einer zentralen Umgebung vereint. Die Funktionalitäten können in die fünf folgenden Säulen eingeteilt werden:

Anwendungsentwicklung mit Low-Code-No-Code-Funktionen
Automatisierung
Integration
Daten und Analysen
Künstliche Intelligenz (KI)

Abbildung 4: Überblick über SAP BTP

Die BTP bietet demnach eine Plattform für verschiedene Produkte und Services, die es den Nutzer*innen ermöglicht, bestehende Anwendungen zu erweitern, neue Innovationen zu erschaffen oder Datenbankfunktionalitäten zu nutzen. Für Entwicklungsteams bis hin zum Fachbereich und dem Vertrieb, bietet die BTP demnach eine Vielzahl an Möglichkeiten.

Auch das Thema Nachhaltigkeit ist fest in die BTP integriert. Insbesondere zur Bestimmung der Scope-3-Emissionen müssen Finanzinstitute Informationen von Kapital- oder Versicherungsnehmern einholen, um sie in die Berechnungen regulatorischer KPIs einzubeziehen. Diese Informationen, wie z. B. Emissionen, die durch ein gefördertes Projekt verursacht werden, sind häufig nicht öffentlich verfügbar. Mit SAP-Build-Funktionen auf der BTP kann das Finanzinstitut beispielsweise eine Vorlage entwerfen, die vom Kunden oder Partner ausgefüllt werden muss, wenn der Vertrag unterzeichnet wird. Diese externen Daten werden dann direkt in der Datenbank gespeichert und können anschließend im Reporting verarbeitet werden.

Auch die KI-Funktionen der BTP spielen auch im Kontext der Nachhaltigkeit eine wichtige Rolle. Insbesondere KI-Funktionen auf der BTP sollen zukünftig zur Erstellung verschiedener Berichte, sowie zum Mapping von Emissionsfaktoren genutzt werden können.

In der Gesamtarchitektur betrachtet spielt die BTP hier eine Schlüsselrolle bei der Entwicklung neuer Innovationen und der Erstellung kundenspezifischer Anwendungen, die eine unterstützende Funktion übernehmen können.

SAP Datasphere

SAP Datasphere, als die nächste Generation von SAP Data Warehouse Cloud, ist eine umfassende Data-Services-Lösung, die auf der BTP basiert. SAP Datasphere ermöglicht eine Business-Data-Fabric-Architektur, die geschäftskritische Daten unternehmensweit harmonisieren kann. Die Lösung kombiniert eine Vielzahl von Funktionen wie Datenintegration, Katalogisierung, semantische Modellierung und Data Warehousing für SAP- und Nicht-SAP-Daten.

Abbildung 5: SAP Datasphere als Teil von SAP BTP

Für die meisten Unternehmen besteht die größte Herausforderung in der Beschaffung und Verwaltung relevanter Nachhaltigkeitsdaten. Benötigte Informationen von Kunden und Geschäftspartnern (z.B. Emissionen) werden bisher meist nicht durch den jeweiligen Vertrag abgedeckt , Dies erschwert es Finanzunternehmen zunehmend, Nachhaltigkeitsdaten zu beschaffen und zu verwalten. Aus diesem Grund benötigen Unternehmen in der Finanzindustrie zuverlässige Lösungen, die es ermöglichen Daten verschiedener Quellen zu identifizieren, zu strukturieren und nachvollziehbar darzustellen. Im Bereich Nachhaltigkeit wird SAP Datasphere daher als zentrale Data-Warehouse-Lösung verwendet, um alle relevanten Nachhaltigkeitsdaten zu sammeln und aus externen Systemen zu verbinden. Zum einen bietet die SAP Datasphere die Möglichkeit ein zentrales Data Warehouse für alle Nachhaltigkeitsinformationen, gemäß den Wünschen und architektonischen Herausforderungen des Kunden individuell zu erstellen. Zum anderen kann SAP Datasphere bereits vordefinierte Datenmodelle für bestimmte Nachhaltigkeitsinformationen liefern, die dann direkt an den SAP Sustainability Control Tower übergeben werden und dort genutzt werden können.

Neben der Datenbeschaffung und -modellierung aus SAP- und Fremdsystemen, unterstützt SAP Datasphere auch die Anbindung externer Daten aus dem sogenannten „Data Marketplace“. Die folgende Abbildung zeigt eine Auswahl verfügbarer Emissionsdaten, die vom Data Marketplace abgerufen werden sollen. Dazu gehören z.B. Emissionsfaktoren, Statistiken und Emissionen pro Kopf oder für bestimmte Produktgruppen. Der “Data Marketplace” kann zum einen zum Erwerb und Verkauf von Daten an andere Datasphere-Nutzer*innen verwendet werden, oder er kann zum anderen zur internen Distribution von Daten genutzt werden.

Abbildung 6: SAP Datasphere – Data Marketplace – Beispiele für den Suchbegriff „Emission“

Im Rahmen der ganzheitlichen Steuerung bietet SAP Datasphere vielfältige Möglichkeiten Nachhaltigkeitsinformationen zu sammeln und aufzubereiten. Im Folgenden werden die Werkzeuge zur Berechnung und Analyse der quantitativen Nachhaltigkeitsinformationen erläutert.

SAP Sustainability Control Tower (SCT) und SAP Profitability and Performance Management (PaPM)

Der SAP Sustainability Control Tower ist die zentrale SAP-Lösung zur Umsetzung der regulatorischen Anforderungen der EU-Taxonomie, CSRD und ESRS und ist, wie auch die SAP Datasphere basierend auf der SAP BTP. Der SCT, als zentraler Bestandteil der ‚SAP Cloud for Sustainable Enterprises,‘ ist eine cloud-basierte Lösung, mit der Unternehmen ihre operative Leistung in Bezug auf Nachhaltigkeit überwachen können und ihr Unternehmen basierend aus finanziellen und nachhaltigkeitsbezogenen Kennzahlen steuern können. Grundsätzlich folgt der SCT dem Prinzip der ganzheitlichen Steuerung eines Unternehmens in Bezug auf Nachhaltigkeit. Dies bedeutet, dass alle Nachhaltigkeitsaspekte (Umwelt, Unternehmensführung, Soziales) aus verschiedenen Quellen im SCT konsolidiert werden, um darauf die von der Regulatorik geforderten Kennzahlen zu berechnen und auszuweisen.

SAP SCT wird mit vorgefertigten Inhalten („SAP-Standardinhalt“) ausgeliefert. Dazu gehören unter anderem Berechnungslogiken und Berichte für die EU-Taxonomie, sowie zukünftig CSRD-Reporting einschließlich ESRS. Grundsätzlich können Nutzer*innen frei wählen, welche der im Standard enthaltenen Metriken verwendet und welche zusätzlichen Metriken angelegt werden sollen. Darüber hinaus können Nutzer*innen zusätzliche Metriken und Reports in der „Calculation and Process Engine“ (CPE) entwickeln und erstellen, wie z.B. zusätzliche Nebenrechnungen oder Konvertierungen.

Abbildung 7: SAP-SCT-Komponenten

Die Metriken der EU-Taxonomie, der CSRD und den ESRS sind für Unternehmen in Europa von besonderer Bedeutung. Aus diesem Grund enthält der SCT bereits Kennzahlen und Berichte zur Berechnung der quantitativen Anforderungen der EU-Taxonomie und der ESRS. Weitere Metriken für die Umsetzung der quantitativen Anforderungen von CSRD / ESRS befinden sich derzeit in der Entwicklung und werden voraussichtlich folgen. Eine Roadmap der geplanten Inhalte ist hier zu finden.

Wie eingangs beschrieben, bestehen besondere Anforderungen an Finanzinstitute hinsichtlich der auszuweisenden Kennzahlen und Datenpunkte. Die finanzindustriespezifischen Kennzahlen berden jedoch noch nicht im Standardinhalt des SCT ausgeliefert, können aber mit der CPE kundenspezifisch angelegt werden. Die CPE ist mit SAP Profitability and Performance Management (SAP PaPM) kompatibel, welches selbst auch eine Schlüsselkomponente der SAP-Nachhaltigkeitsplattform darstellt und eine zentrale Rolle bei der Erstellung von finanzspezifischen Kennzahlen für verschiedene Nachhaltigkeitsstandards spielt.

Basierend auf der In-Memory-Plattform SAP HANA, wurde SAP PaPM ursprünglich für detaillierte Allokationen bei Finanzinstituten entwickelt. Seit langem ist SAP PaPM jedoch eine integrierte Performance-Management-Anwendung für alle Branchen und Geschäftsbereiche, einschließlich Nachhaltigkeit. SAP PaPM Cloud ist eine Performance-Management-Anwendung der nächsten Generation, die kein eigenes Datenmodell benötigt, sondern vorhandene Daten und Informationsmodelle aus anderen SAP- und Nicht-SAP-Anwendungen wiederverwenden kann. Aufbauend auf SAP-Fiori ist die Software so konzipiert, dass sie von Nutzer*innen einfach und komfortabel ausgeführt werden kann.

Um die finanzindustrie spezifischen Anforderungen zu erfüllen, bieten SCT und PaPM auch sogenannte „Sample Contents“ an, die verschiedene Use Cases im Kontext Nachhaltigkeit abdecken, z.B. quantitative ESRS-Anforderungen, sowie EU-Taxonomie- und TCFD-Anforderungen. Der in Abbildung 8 gezeigte Sample Content kann als Ausgangspunkt für die Implementierung weiterer Logiken und Metriken oder als Beispiel für eine neue Implementierung verwendet werden. Neue gesetzliche Anforderungen oder technische Anpassungen werden fortlaufend durch neue Versionen des Sample Contents eingeführt. Wenn jedoch ein neues Modell mit einem Sample Content als Grundlage angelegt wird, ist dieses Modell von Erneuerungen des Contents nicht betroffen und kann bei regulatorischen Änderungen von Nutzer*innen oder Beratungsservices angepasst werden. SAP PaPM bietet außerdem die Flexibilität, für andere Anwendungsfälle als Nachhaltigkeit verwendet werden zu können, um beispielsweise Nachhaltigkeitsberechnungen mit Rentabilitätsmodellen zu kombinieren. Eine vollständige Liste der verfügbaren Sample Contents in SAP PaPM Cloud ist auf der offiziellen Produktseite einzusehen.

Abbildung 8: Übersicht über Beispielinhalt für Nachhaltigkeit in SAP PaPM und SCT

Der Sample Content von ESRS Disclosure Management kann beispielsweise als Grundlage für die Berechnung der von ESRS benötigten quantitativen Informationen verwendet werden. Dieser enthält Berechnungslogiken für die quantitativen Anforderungen von ESRS E, S und G, sowie Reports für einzelne KPIs und Datenpunkte. Abbildung 9 zeigt einen Ausschnitt aus dem ESRS-Disclosure-Management- Sample Content.

Abbildung 9: ESRS-Reporting in SAP PaPM Cloud

Die flexible Modellierungsumgebung bietet auch die Möglichkeit, beliebig viele Modelle für andere Nachhaltigkeitsaspekte, sowie andere Anwendungsfälle zu erstellen und zu verknüpfen. Speziell für die Finanzindustrie ist es möglich, quantitative Informationen und Bewertungsmodelle zu erstellen, wie sie beispielsweise vom PCAF gefordert werden. So kann zum Beispiel die Ableitung eines bestimmten Datenqualitäts-Scores, abhängig von der Verfügbarkeit und Genauigkeit der zu verwendenden Daten in PaPM Cloud erstellt werden.

Abbildung 10: Beispiel – PCAF-Scoring in SAP PaPM Cloud

SAP Analytics Cloud

Mit SAP SCT und SAP PaPM stellt SAP Werkzeuge zur Berechnung gesetzlicher KPIs und freiwilliger quantitativer Informationen sowie für Ad-hoc-Reporting und -Simulation bereit. Ein wesentlicher Bestandteil der ganzheitlichen Steuerung und Berichterstattung liegt jedoch in der Integration von Nachhaltigkeitsinformationen in die Planung und Berichterstattung des gesamten Unternehmens. Als Teil der Cloud for Sustainable Enterprises und Teil der SAP BTP ist SAP Analytics Cloud (SAC) eine Lösung für diese Herausforderungen bei der Nachhaltigkeitsberichterstattung.

Mit einer benutzerfreundlichen Oberfläche adressiert SAC in erster Linie Geschäftsbereiche und Managementfunktionen, die verschiedene Nachhaltigkeitsinformationen strukturiert verwalten und verwenden möchten, z.B. um regulatorische Kennzahlen oder Abweichungen in Zielen darzustellen. Um die Zusammenarbeit zu stärken und als Voraussetzung für nachhaltiges Handeln können Self-Service-Analysen genutzt werden, um aussagekräftige Erkenntnisse im gesamten Unternehmen zu identifizieren und auszutauschen. Beispielsweise können die Ergebnisse von KPI-Berechnungen aus SAP SCT oder SAP PaPM in konsolidierter Form dargestellt werden.

Nachhaltiges Wirtschaften erfordert nicht nur die Identifizierung des Status quo und die Offenlegung regulatorischer Informationen, sondern sollte als Grundlage für die allgemeine Corporate Governance und Planung dienen. Das Pariser Klimaziel von 1,5° kann beispielsweise nur durch zukunftsorientiertes Handeln erreicht werden. In diesem Zusammenhang stellt SAC Planungsfunktionen bereit, mit denen Nachhaltigkeitsinformationen in die gesamte Unternehmensplanung integriert werden können.

Abbildung 11: SAP Analytics Cloud – Überblick

Vorteile der SAP-Nachhaltigkeitsplattform

Nachhaltigkeit ist ein Teamsport! Um eine Nachhaltigkeitsstrategie erfolgreich umzusetzen, ist die Zusammenarbeit aller Geschäftsbereiche des Finanzunternehmens erforderlich. Aus diesem Grund richtet sich die SAP Sustainability Plattform an alle Bereiche und Stakeholder des Unternehmens. Die Plattform ermöglicht die Umsetzung unterschiedlichster quantitativer Anforderungen sowie die Verbindung verschiedener Modelle miteinander.

Darüber hinaus kann die SAP-Nachhaltigkeitsplattform auf der bestehenden IT-Architektur aufbauen. Vorhandene SAP- und Nicht-SAP-Datenquellen können über vordefinierte Schnittstellen verbunden werden, sodass vorhandene Daten bestenfalls ohne Replikation verwendet werden können.

Die Replikation von Datenobjekten kann auch auf der SAP-Nachhaltigkeitsplattform weitgehend vermieden werden, indem vorhandene Datenobjekte aus den SAP-Quellsystemen wiederverwendet werden. Die vorhandenen Datenmodelle und Objekte können z.B. direkt für die Berechnungen verschiedener KPIs verwendet werden.

Zudem kann die SAP-Nachhaltigkeitsplattform schrittweise wachsen. Die beschriebenen Module können unabhängig voneinander eingeführt werden. So kann beispielsweise zunächst ein einzelner Anwendungsfall implementiert werden (z.B. Emissionen aus Reisen), um die Plattform zu testen. Dadurch wird das Risiko für das Unternehmen deutlich minimiert.

In diesem Blogbeitrag werden die vorhandenen Tools der SAP-Nachhaltigkeitsplattform beschrieben, die die technische Umsetzung der Nachhaltigkeitsstrategie von Finanzunternehmen unterstützen können. Nachhaltigkeit ist jedoch ein Zyklus und wird in Zukunft immer neue Herausforderungen und Chancen mit sich bringen. So arbeitet die SAP bereits an weiteren Funktionalitäten, um Nachhaltigkeitsinformationen identisch zu Finanzdaten im Unternehmen zu behandeln. Daraus hat sich die Entwicklung des „SAP Green Ledger“ und des „Carbon Accounting“ etabliert. In weiteren Blogposts werde ich weitere Themen aus dem Bereich Nachhaltigkeit für die Finanzindustrie im Kontext der SAP diskutieren. Stay tuned!

Quellen:

[1] SAP at COP28

[2] https://www.sap.com/sustainability/solutions.html

[3] https://sustainability-navigator.cfapps.sap.hana.ondemand.com/

[4] https://news.sap.com/2023/03/sap-datasphere-power-of-business-data/

[5] https://www.sap.com/products/technology-platform/datasphere/features.html

[6] SAP Datasphere – Data Marketplace – Beispiel verfügbar über „Guided Experience“ https://guided-experience-datasphere.cfapps.eu10.hana.ondemand.com/dwaas-core/index.html#/marketplace_search

[7] https://news.sap.com/germany/2023/02/nachhaltigkeit-fuer-unternehmenssteuerung-mit-sap-sustainibility-control-tower-sct/

[8] https://help.sap.com/docs/SAP_SUS_SCT/21ecfb83f8d14e5982b7af315da5889a/3904fa967d1f4c3d928d2e719141b016.html?q=ESRS

https://help.sap.com/docs/SAP_SUS_SCT/0ec96e5804244b40b2adab7bbe20fcff/2d126df2aa704c3fadbf428a593c5c22.html?q=ESRS

[9] https://help.sap.com/docs/SAP_PROFITABILITY_PERFORMANCE_MANAGEMENT_CLOUD

[10] https://discovery-center.cloud.sap/serviceCatalog/sap-analytics-cloud/?region=all

Are you ready for Scope 3 reporting? Procurement in an ESG regulated world

2024-04-29T10:54:05.915000+02:00

Previously thought to be a voluntary responsibility, companies operating across the European Union (EU), Australia, Singapore and listed companies on China's three major stock exchanges are no longer immune to averting Scope 3 reporting obligations.

The EU's Corporate Sustainability Reporting Directive (CSRD) since January 2023, and Australia's phased implementation of mandatory Scope 3 emissions reporting starting from the 1st of July 2024 - is expected to challenge many existing procurement professions both directly and indirectly worldwide. CSRD is estimated to impact approximately 50,000 European companies.

When we talk about procurement as a service and operating function, preconceptions are evoked about the role of supply chain management purely being about spend control, supply chain resiliency, cost minimisation and compliance.

Indeed, procurement plays a significant role in asserting compliance and cost control. But what would this look like in an environmentally regulated landscape? One where environmentalism is no longer voluntary, but compulsory?

With the rollout of CSRD in the EU, environmental, social and governance (ESG) principles are no longer about branding a company's tolerance and support for sustainability to appease stakeholders.

We're now entering an era of sustainable procurement compliance which is profoundly challenging our conventional presumptions on the role of procurement beyond simply purchasing.

Procurement leaders are starting to find that spend control and sustainable procurement compliance are mutually inclusive and supportive of one another.

Picture this, you are currently running a sourcing event and your objective is to minimise procured costs. By using an EcoVadis carbon scorecard, you can select suppliers with verified credentials with a low emissions footprint, and therefore, potentially reduce your Scope 3 procured carbon tax.

Carbon taxes will force finance, auditing and procurement professions to work together to tackle spend on emissions. Demonstrating decarbonisation starts at the supplier selection level and can only be done using accurate, auditable carbon values and calculations. An invoice with a carbon value, can be a good starting point for documenting these emissions. Scope 3 emissions calculators will become a critical part of the procurement ESG toolkit to help users approximate the emissions intensity of that item. In most cases, actual carbon emissions are always preferred over estimated ones because let's face it...who wants to overpay their carbon taxes!

However, collecting and reporting Scope 3 emissions is a significant challenge. Deloitte cites that the poor holistic integration of emissions collection technologies throughout a business's ecosystem, lack of tools especially from small to medium businesses to report Scope 3 emissions, poor supplier engagement, poor data quality and reliability, and rapidly evolving regulatory standards - all discourage many business leaders from investing in Scope 3 collection and reporting solutions...or even championing the cause at all.

This was exemplified greatly in the SEC's recent policy backflip (March 2024) to make Scope 3 reporting voluntary. But bear in mind, that many of these SEC-listed, large companies will more than likely, still have to report their Scope 3 emissions if they have a major presence in the state of California (SB-253 Climate Corporate Data Accountability Act) or the EU.

The Boston Consulting Group survey found that companies using automated digital emissions solutions were 2.5 times more likely to report their emissions comprehensively. Technology, therefore, is a huge enabler of sustainability compliance.

Despite policy setbacks from the SEC, non-EU companies with a significant EU presence (activities greater than €150 million revenue turnover) are expected to report their Scope 3 emissions to the authorities. Most large US companies with a presence in the state of California are already mandated to report Scope 3 emissions. The Biden Administration is currently proposing to enforce mandatory Scope 3 emissions reporting for its major federal contractors (annual contract values of >$US50 million).

With supply chains contributing up to 88% of a company's emissions and 11.4 times that of Scope 1 and 2 primary emissions, it is no wonder that Scope 3 emissions reporting has garnered huge attention among regulators and environmental groups.

Fortunately, at SAP Ariba we are making strides and efforts to ensure that our customers remain compliant to Scope 3 reporting obligations and other ESG regulations. For example, enabling supplier Scope 3 carbon submissions and third-party sustainability certifications.

Transport Carbon Footprint Calculation in SAP Sustainability Footprint Management

2024-04-29T10:54:34.885000+02:00

I am writing to provide you with a concise summary of the recent SAP Sustainable Footprint Management (SFM) demonstration, specifically focusing on the transport carbon footprint calculation feature.

The demo highlighted the system's capability to compute the carbon footprint of transportation activities using various data elements. These include:

- Shipment number: Unique identifier for tracking shipments. (Mandatory)
- WEIGHT: The Weight of the Shipment (Mandatory)
- Source location: The starting point of the shipment. (Mandatory)
- Destination location: The final delivery location. (Mandatory)
- Delivery date: The scheduled date for the shipment to reach its destination. (Mandatory)
- Quantity: The amount of product being transported. (Mandatory)
- Mode of transport: The method by which the shipment is being moved (e.g., truck, ship, train). (Mandatory)
- Product: The specific item or items being shipped. (Optional)

Each of these Data Elements could be extracted from SAP ECC or SAP S/4 HANA Embedded Transportation Management from the transaction Documents

SAP ECC

SAP S/4 HANA Embedded Transportation Management

Shipment Document which have

Shipment number: Unique identifier for tracking shipments. (Mandatory)
- WEIGHT:
- Source location:
- Destination location:
- Delivery date:
- Quantity:
- Mode of transport:
- Product:

Freight Order Document which have

Freight Order number: Unique identifier for tracking shipments. (Mandatory)
- WEIGHT:
- Source location:
- Destination location:
- Delivery date:
- Quantity:
- Mode of transport:
- Product:

Picture of the Template

This functionality allows for detailed monitoring and reporting of emissions, aiding in the management of environmental impact across supply chains.

Picture of the Manage Data App with Data Entities

By leveraging pre-determined emission factors for each stage of the process, the GLEC framework can provide customized total carbon emission factors for any defined energy pathway. For biodiesel made from soybeans, it would calculate factors for emissions from farming the soybeans, converting to biodiesel, transporting the fuel, and combusting it in a diesel engine. The pre-configured emission factors enable the framework to rapidly generate carbon footprint estimates for all these different energy forms and uses. This allows users to easily compare the carbon impacts of utilizing gasoline versus ethanol or natural gas versus jet fuel for a given purpose.

Picture of the Dynamic Transport Data - Report App

CO2e(WTW)(Transport)[KG]/Parcel Target Location, Product and Quarter

CO2e(WTW)(Transport)[KG]/Parcel Target Location and Quarter

CO2e(WTW)(Transport)[KG]/Quarter

CO2e(WTW)(Transport)[KG]/Parcel Number and Quarter

Are you ready for Scope 3 reporting? Procurement in an ESG regulated world

2024-04-30T10:17:42.115000+02:00

We're now entering an era of sustainable procurement compliance which is profoundly challenging our conventional presumptions on the role of procurement beyond simply purchasing.

Procurement leaders are starting to find that spend control and sustainable procurement compliance are mutually inclusive and supportive of one another.

Picture this, you are currently running a sourcing event and your objective is to minimise procured costs. By using DitchCarbon carbon risk ratings, you can select suppliers with a low emissions footprint, and therefore, potentially reduce your Scope 3 procured carbon tax.

4 Lessons from Moms in Risk-Resiliency for Supply Chain Professionals

2024-05-10T13:36:56.541000+02:00

This Sunday is Mother’s Day! It is a beautiful day to show our moms, grandmas, or nanas how much we care and appreciate all the things they do for us. They are our first real-time superheroes, setting an amazing example in every aspect of life. So, why not take a cue from moms and incorporate their best practices into our supply chain strategies?

Let's get inspired and see how we can learn from our very first supply chain managers of all time: our moms!

#1 She is the dictionary definition of risk-resiliency.

When I was a kid, each time I tripped and scraped my knee, like a superhero, my mom would come rushing to my rescue with a napkin and band-aid in hand. Or whenever I mentioned I was hungry or thirsty, she'd pull out a magical purse filled with snacks and water. They are constantly one step ahead, knowing our needs and ready for any kind of shenanigans.

Just like how moms, supply chain professionals need to have their special tools in their toolbox to predict, anticipate, and act with agility toward any issues that may arise. If anyone knows how often the ship hits the fan, it's supply chain managers.

One of the most important tools in the supply chain managers’ toolbox is having full visibility to thrive instead of just surviving in the business world. Breaking down silos and sharing real-time information with each stakeholder in the supply chain operations enables businesses to make informed decisions with an agile reflex.

#2 She leverages Momtifical Analysis capabilities.

Let’s be honest, moms never seem to forget a single detail – this is a dad-approved statement by the way - and they are always ready to give us the guidance and support we need to make the optimal decision in seconds.

Much like moms’ ability to make quick decisions, supply chain professionals need the tools to do the same. Incorporating business AI into operations is like the supermom senses of real-time data and insights, enabling supply chain managers to make quick and resolute decisions and guiding businesses through the complexities.

By harnessing the power of data analytics and machine learning algorithms, organizations can pinpoint and address issues in real time, reduce wastage, and improve overall production quality. They prevent potential equipment malfunctions before they occur, schedule maintenance, and safeguard against costly breakdowns and production chokepoints, which enables them to increase efficiency and maximize profitability.

#3 She can effectively alternate sourcing strategies.

Shopping with mom is like embarking on a wild scavenger hunt through the aisles of multiple stores. She knows where to buy the freshest groceries, and always knows when to get them. Moms’ knowledge of suppliers - including the network amongst the local stores and other moms - is so extensive that she is always prepared and alternates sourcing strategies in case their supplier cannot provide what they need.

In today's digital age, an interconnected, transparent, and versatile network is a must for businesses to establish strong connections with their partners and suppliers along the supply chain. Connecting the partners, suppliers, and logistics data in a single centralized environment eliminates the need for individual integrations with each trading partner. This streamlined and centralized network improves risk management and enhances trust, therefore, enhancing customer satisfaction.

#4 She shapes a greener future.

Back in the day, my schoolbag and pockets were like a treasure trove of empty snack packs and wrappers, as my mom taught me to throw away my trash only in the bin. Fast forward to adulthood, I still find myself hoarding trash in my bags, as her voice still rings in my head. The fact is moms are shaping the future by teaching generations to be eco-conscious by instilling habits like repurposing items and cutting down on waste.

Just as mothers are instrumental in making this change, supply chains, as great contributors to waste in the world, are also essential drivers of change and innovation in creating a more sustainable future for our planet.

By implementing sustainable methodologies and tools, the supply chain can become a valuable asset in not only profitable growth but also positive environmental change.

In a world where we are consistently looking for alternative ways to run supply chains more efficiently, why not draw inspiration from our very first supply chain managers we know: our mothers?

To learn more about enabling a risk-resilient and sustainable supply chain, please join us at the upcoming SAP Sapphire & ASUG Annual Conference, from June 3-5, 2024 in Orlando.

How Finance teams can steer their businesses today based on financial and sustainability data

2024-05-13T17:35:10.384000+02:00

The environment for sustainability is evolving rapidly – in some cases, teams are concerned that new IT systems will not be in place in time to meet the first deadlines. While SAP’s Cloud ERP-centric approach will be generally available soon, organizations can already be reaping the benefits of their existing investments to deal with some primary concerns.

Planning Sustainability KPIs

To change business practices to reach sustainability goals, finance teams need to include key metrics in both their strategic and operational planning processes. SAP Analytics Cloud has shipped sustainability planning processes as part of SAC Business Content package “Integrated Financial Planning” on February 19th, 2024. This content supports a collaborative planning process designed to integrate seamlessly with Financial Planning, but it also can be used standalone for companies who want a dedicated approach.

Teams can plan greenhouse gas (GHG) emissions integrated into existing business plans, using sales quantities, material resources, or expense planning to calculate not only the financial outlook, but also the product and corporate footprint.

Starting from a spend-based emission calculation, retrieving emission factors from SAP Sustainability Footprint Management or using planned activity quantities and rates, business users can forecast and simulate GHG emissions for cost centers, products or assign planned GHG quantities to financial statements.

This planning tool presents companies the opportunity to execute their sustainability strategies and plan the GHG footprint alongside their economic goals. And progress toward sustainability goal achievement can be measured.

Figure: Planning flows for GHG

Analyzing Sustainability KPIs

The SAP Sustainability Control Tower is an analytics solution that supports teams in their management of reporting sustainability metrics. Companies can use predefined integration to pull data from SAP and other systems, easing data collection and centralizing all relevant data in one place. SAP delivers pre-defined content which can be extended with customized metrics, emission calculators, and templates to meet the evolving sustainability reporting needs. With this transparency, companies can define and execute on ESG goals and track sustainability action.

Sustainability risk management

The SAP GRC (Governance, Risk, and Compliance) portfolio contains solutions that can help companies manage the risks associated with sustainability. Using the risk management capability of SAP Risk and Assurance Management (formerly known as SAP Financial Compliance Management), business and operational managers owners can identify, assess, and respond to sustainability risks, as well as raise and respond to identified issues, in a documented and auditable collaborative process. In addition, teams can set up and structure internal controls for sustainability and test the controls regularly using the process control capability) to address segregation of duties demands for sustainability. For companies already using these solutions, adding an additional sustainability risk and control category is a quick-win for transparency. The short implementation time of the solutions means that teams can start getting value for their risk management use cases quickly.

Entity-level carbon closing activities

With the introduction of new sustainability reporting requirements, finance teams are not only tasked with new data collection, preparation and reporting requirements, but also with the need to orchestrate and coordinate sustainability period-end processes and activities.

SAP’s entity closing orchestration solution, SAP Advanced Financial Closing, is a tool that teams can use to organize and automate many repeatable activities in the financial but also in the sustainability-oriented record-to-report process. It allows teams to run a combination of automated jobs, bots, workflow-supported and status-triggered manual follow-on tasks, and to document sign-offs by experts. With this, sustainability reporting can benefit from this structured approach as well. From organizing and automating data collection, to running automated routines, and providing assurance checks and variance analysis, the oversight and status reporting helps teams identify roadblocks and stay on track to meet reporting deadlines.

Collecting data from subsidiaries with a systematic approach

A key capability of SAP S/4HANA Cloud for group reporting is data collection, which ensures non-financial data is collected from all subsidiaries in a structured, traceable approach. SAP delivers sustainability content for SAP Group Reporting Data Collection, but teams can also define their own forms. These forms can include data validation rules to ensure the data being collected is the highest quality. Process support ensures central teams have a good overview of the collection process, so that reporting deadlines can be met.

Group-level carbon consolidation

Teams can use SAP S/4HANA Cloud for group reporting to account for group-level greenhouse footprints using GHG consolidation methodologies based on operational control alongside the financial consolidation methodologies and standards. Finance teams do not have to learn to use a new tool – rather the existing consolidation capabilities and automation routines can be re-used for financial and sustainability consolidation. The specific consolidation rules which consider control differences (which may differ between financial and non-financial consolidation principles) can be flexibly and accurately modeled according to ISSB, ESRS or other sustainability standards and rules.

Disclosure Management with SAP and partner solutions

Finally, the immediate task facing Finance teams is to coordinate the external reporting related to carbon and sustainability and make that information available to authorities. This “last mile of reporting” combines data and commentary and requires a traceable and verifiable approach.

With SAP Disclosure Management and other SAP partner solutions, organizations are already compiling greenhouse gas emissions metrics for the external filings and making this information available in the required XBRL technical formats. There is standard integration between SAP Disclosure Management and SAP S/4HANA for group reporting which can be used to make sure the non-financial information flow is accurate, and there is extensive collaboration support to structure the process of dozens of experts working together under time pressure to deliver a high-quality report.

Conclusion

In summary, finance teams can begin today making the most of their existing estate to prepare for future sustainability business reporting requirements. Companies can provide Sarbanes-Oxley compliance for ESG reports and enable data ownership and governance with traceable and verifiable data using tools that are already in place.

Read more about how SAP broader suite of SAP solutions - Cloud ERP, Supply Chain Management, Spend Management and Business Network, and Business Technology Platform - are delivering SAP solutions for sustainability.

Embracing Sustainability using the SAP Enterprise Architecture Framework

2024-05-14T15:50:19.648000+02:00

Embracing Sustainability: A Guide to Transforming Your Enterprise with SAP Enterprise Architecture Framework

In today's rapidly changing world, the pursuit of sustainability has emerged as a critical imperative for enterprises seeking to thrive in the long term. SAP Enterprise Architecture Framework (EAF) provides a comprehensive model for aligning business strategy with technology capabilities, making it very powerful in driving sustainability initiatives in enterprises using SAP.

In this blog, we'll explore how organizations can leverage SAP EAF to become sustainable enterprises, integrating environmental, social, and economic considerations into their core business practices.

Understand the Impact of Sustainability:

Begin by recognizing the importance of sustainability in driving business value and resilience.
Understand the environmental, social, and economic impacts of your organization's operations, products, and services.

Align Sustainability with Business Strategy:

Integrate sustainability goals and objectives into your overall business strategy.
Leverage SAP EAF to ensure alignment between sustainability initiatives and key business priorities, such as growth, innovation, and risk management.

Define Sustainable Enterprise Architecture Principles:

Develop a set of sustainable enterprise architecture principles that guide decision-making and design.
Consider factors such as resource efficiency, waste reduction, social equity, and stakeholder engagement.

Implement Sustainable Solutions with SAP EAF:

Utilize SAP EAF to design and implement sustainable solutions across the enterprise.
Leverage SAP's portfolio of sustainability-focused products and services, such as SAP S/4HANA, Sustainability Footprint Management or SAP Ariba, to support your sustainability initiatives.

Enable Data-Driven Decision Making:

Leverage SAP EAF to establish data governance processes and systems that capture, analyze, and report on sustainability metrics.
Enable real-time visibility into environmental performance, social impact, and economic value creation.

Optimize Resource Efficiency:

Use SAP EAF to identify opportunities for optimizing resource efficiency and reducing environmental footprint.
Implement technologies such as IoT, AI, and advanced analytics to monitor and optimize energy consumption, water usage, and waste generation.

Engage Stakeholders and Partners:

Foster collaboration and engagement with stakeholders, including employees, customers, suppliers, and communities.
Leverage SAP EAF to establish partnerships with suppliers, customers, and industry peers to drive collective action on sustainability.

Measure, Monitor, and Improve:

Establish key performance indicators (KPIs) and metrics to measure progress towards sustainability goals.
Use SAP EAF to monitor performance, identify areas for improvement, and continuously refine your sustainability strategy and architecture.

By leveraging SAP Enterprise Architecture Framework, organizations can transform their company into a sustainable enterprise, driving positive environmental, social, and economic outcomes. By embedding sustainability into every aspect of their operations and leveraging SAP's innovative technologies and solutions, enterprises can create value for themselves, their stakeholders, and the planet. Together, let's embrace sustainability as a strategic imperative and build a more resilient and sustainable future for all.

Frank Jacobs
SAP Sustainable Enterprise Architect

Webinar "Ensure Product Compliance with SAP S/4HANA for Product Compliance" on May 23rd

2024-05-15T14:41:33.434000+02:00

I'd like to draw your attention to this upcoming webinar which our Product Marketing Manager for Product Compliance, Dr. Rüdiger Kreuzholz will hold on May 23rd.

Companies that manufacture or sell products must make sure that their products comply with a growing number of regulations and requirements. To help companies with these challenges, SAP has developed a new product compliance solution called SAP S/4HANA for product compliance.

This is ideal if you are new to the solution and would like to get insights and ;

Hear about SAP’s vision and strategy for SAP S/4HANA for product compliance
Get an overview of the solution
Catch a glimpse of the solution with a short offline demo

You can register here ! Feel free share with your colleagues and partners, as the webinar is open to all and free-of-charge.

How can SAP Recommerce help businesses to create new revenue streams while accelerating circularity?

2024-05-16T09:21:08.739000+02:00

In the constantly changing consumer environment of today, businesses are constantly seeking innovative ways to not only increase revenue but also to align with sustainability goals. For several years now, one model in retail businesses has been gaining popularity: Recommerce programs.

Recommerce and resale programs not only promise financial gains but also resonates with eco-conscious consumers. By embracing recommerce campaigns, brands can embark on a journey of reinvention, extending the lifespan of products while unlocking new revenue streams.

Recommerce isn't just about reselling pre-owned items; it's a paradigm shift that redefines the relationship between brands and consumers. It's an opportunity for businesses to not only engage with their audience but also to build brand loyalty through sustainable practices.

Latest statistics show that consumers selling pre-owned items return to the brand and spend 2.5 times the amount of what they received in credit. In addition, 75% of customers return to those brands that offer resale programs. Especially in the fashion sector, resale programs are growing faster than in other sectors. As highlighted in the 2023 Resale report of thredUP, the U.S. resale market is expected to grow 9 times faster than the broader retail clothing sector by 2027 reaching $70 billion.

From retail, fashion, consumer products to electronics and automotive – resale programs gain popularity in various areas and industries. Brands like Coach, Lululemon, Patagonia, and Nespresso have effectively integrated resale programs into their established business models. For example, Coach launched Coach (Re)Loved, an initiative that offers customers to trade in their pre-loved leather Coach bags in order to be refurbished, recycled or reimagined and finally resold via the brands’ website. Another nice example is Nespresso which introduced the Nespresso “RELOVE” program providing customers the possibility to return their Nespresso machines. These machines are then refurbished, extending their lifespan and allowing them to be used for as long as possible, thereby giving them a second chance at life.

While resale programs offer many upselling opportunities for companies, it is also important to mention that they can help and support with important regulations. The European Commission, for instance, introduced in March 2020 the circular economy action plan, “designed to promote more sustainable product design, reduce waste and empower consumers, for example by creating right to repair”. This plan was further adopted in February 2021 demanding additional measures to become an environmentally sustainable and fully circular economy by 2050.

The time for companies to act is now!

Circular business models represent a paradigm shift in how businesses operate, aiming to minimize waste and maximize resource efficiency throughout the product lifecycle. Unlike traditional linear models where resources are extracted, used, and then disposed of, circular models seek to close the loop by keeping resources in use for as long as possible through reuse, recycling, and regeneration.

One key aspect of circular business models is designing products with longevity and durability in mind, thereby extending their lifetime. This can involve using durable materials, modular designs, and repairable components to prolong product use and reduce the frequency of replacements.

How can SAP support brands with resale programs?

As one of the leading software companies worldwide, SAP is committed to help the world run better and improve people’s lives with sustainability at the core. One new solution which can support businesses to create circular revenue streams and reduce waste is SAP Recommerce.

SAP Recommerce can take back, manage, and resell preowned inventory. The solution helps customers accelerate the shift from a linear to a circular business model, extending customer lifetime value, and promoting more-sustainable consumption.

How does SAP Recommerce work?

SAP Recommerce is a flexible end-to-end solution tailored to the business priorities of retail, fashion, consumer product, and automotive businesses.

The solution is easy to use from end-customer, store associate, recondition and Recommerce manager perspectives:

End-customer: SAP Recommerce can be integrated to the brands’ website providing customers the possibility to trade-in pre-loved items online, or give them back in-store. Customers can easily upload images of the items, and immediately see the estimated credit value of the pre-loved item.
Store associate: Once the traded-in item has reached the store, the store associate can verify the item and its “real” condition, and finally confirm the trade-in flow in the system.
Recondition manager: As a next step the recondition manager can define the next relevant steps for the item to be performed such as cleaning, repairing, reconditioning and restocking. Each step can be documented and tracked on a detailed level. Users can enter the time needed for every step.
Recommerce manager: After all steps have been completed, the Recommerce manager can control and monitor the reporting of the Recommerce program and check the number of trade-in items and further relevant sustainability data. Before the traded-in item returns back to stock, the Recommerce manager can set a new price. This price setting task can be provided by AI – while checking external 3rd party platforms and marketplaces.
End-customer: Once the price is set, the pre-loved item is ready to find a new buyer. The end-customer opens the webshop and selects to buy a pre-loved item.

Watch the following video to get the idea behind the solution.

Added Value with SAP Recommerce

The above case shows how businesses can enable circularity and extend their product lifecycles while using SAP Recommerce to resell and manage all their processes.

Brands have further benefits when using SAP Recommerce:

New revenue streams as an opportunity for up- and cross selling
Demand generation while acquiring new customers
Contribution to a more sustainable environment via commitment to reduce waste and promote circularity
Monetize returns while capturing value from “write-off” products

Interested to learn more about SAP Recommerce? Visit our sap.com page, or connect with us in LinkedIn.