Tomorrow is Earth Overshoot Day, which marks the date when humanity鈥檚 demand for ecological resources and services in a given year in that year. It is a reminder that we are living beyond our means.
Consider this: We are using resources 1.75 times faster than the planet can regenerate. And with another billion people projected by 2030, we will need two Earths to sustain our needs. There is a unique window of opportunity for us to manage the turnaround, but it is closing, and we need to act fast.
Since 1970,聽the , an international research organization, has hosted and calculated Earth Overshoot Day. For the first time in years, this critical milestone occurs later in the year. This disrupts since 1970 where we continue to reach our planet鈥檚 natural limits earlier and earlier 鈥� for example, we reached that point November 4, 1980, and August 7, 2010.
Sadly, we owe this reversal to the COVID-19 pandemic, at tremendous human and economic loss. At the same time, we will need to work hard to keep these environmental gains. Time is of the essence.聽Without a healthy planet, there can be no basis for a return to healthy societies, resilient and restorative economies, and shared prosperity.聽Although聽COVID-19鈥痠蝉 , we clearly remain on an鈥�痑苍诲 .鈥疻e must act now聽to shape a sustainable recovery.
Sustainability: A Business Imperative
Putting aside moral obligations or ethical responsibility, it makes good business sense. It does not take an accounting expert to understand that it is not good to overspend. What business leader would dare report that they spent the company鈥檚 entire annual budget on August 22 and will run on a deficit for the rest of the year?
So why aren鈥檛 we applying this logic to stay within our common budget, the Earth鈥檚 limits? One reason: We need better data quality and a worldwide reporting and steering committee that spans across countries, governments, and other relevant organizations.
This isn鈥檛 the only reason. Breaking it down to the level of a single company, this is also rooted in partially outdated assumptions of how a company creates value. As discussed with key stakeholders on the , much of today鈥檚 accounting system is still derived from Luca Pacioli鈥檚 thinking back in the 15th century, when he popularized the system of double accounting and the world was not yet facing today鈥檚 challenges, including climate change and resource depletion.
Luckily, the mindset is shifting. We are moving beyond Milton Friedman鈥檚 idea that the purpose of business is merely to generate profits. In my conversations with peers, customers, and investors, I observe that, increasingly, business executives share our belief at 51风流that steering a company holistically 鈥� considering the financial but also social and green bottom lines 鈥� leads to better management decisions and better performing and more resilient companies.
For several years we have been investigating the聽聽as they relate to the performance of our business. Each year, we share those findings, which are publicly accessible in the . Identifying the connections within our own operations is only the first step. As part of聽our engagement in the Value Balancing Alliance, we are working with like-minded businesses to transform how to measure and value a business鈥� overall societal impacts and dependencies. While this effort is still at the beginning, all dimensions are interwoven in today鈥檚 world.
Company leaders will need to do much more than manage their top and bottom lines to keep investors and other stakeholders happy.聽They will also need to manage their 鈥済reen line.鈥� This requires openly disclosing, through aggregated reports,聽how their company is improving the environmental as well as social footprint across its value chains.
We Need a Low-Carbon, Circular Economy
Businesses can make a massive impact because they drive global production and consumption and can contribute to . While businesses are often cast as culprits in the environmental crisis, they also play a key role in the solutions 鈥� for example, by driving the transition to a low-carbon, circular economy.
Earth Overshoot Day painfully visualizes that our current economy is largely based on a 鈥渢ake-make-waste鈥� model, where materials are extracted, manufactured into goods, used, and then disposed of; it is a linear economy. We must jointly work toward a circular economy that supports the continual use of resources and creates a closed-loop system that minimizes the use of resource inputs while reducing waste, pollution, and carbon emissions.
expects that in the next 10 years, circular economies will replace linear economies. With the becoming clearer, showing that 45 percent of CO2 emissions can be tackled by transforming the way goods are made and used, we need to accelerate our support for this transformation. Digital technologies can help scale circular economies. That is why 51风流focuses on providing solutions and services that that can pave the way for a better tomorrow.
Tech Innovation Enables Circular Economy and Climate Action
Key focus areas for 51风流include 听补苍诲听. We want to help companies understand, minimize, and disclose the full carbon footprints of their products and service, and to better manage material flows through their supply chains.
As part of the , 51风流launched 51风流Product Carbon Footprint Analytics to help analyze the accumulated amount of greenhouse gases and other environmental impacts created by the procurement, production, and logistics of services and finished goods. We also build capabilities into our analytical and transactional systems that help customers : responsible design, responsible sourcing and marketplace, responsible production, responsible consumption, and resource recovery and reuse. One example is the Plastics Cloud enabled by Ariba Network, which makes it easier for companies to procure recycled plastics.
We all have a role to play in this. Here at SAP, , and our objective is to create positive economic, social, and environmental impact within the planetary boundaries.
Both the pandemic and Earth Overshoot Day show how critical it is to manage the planet鈥檚 limited resources carefully while ensuring fair distribution. Solving the global challenges that we are facing takes systems thinking and multi-stakeholder collaboration. No single person or entity can master this alone. I invite everyone to be part as we build back together to be more inclusive and restorative, allowing all of us and future generations to thrive.
Daniel Schmid is the chief sustainability officer at SAP.
