Corporate environmental, social, and governance (ESG) management has become a catalyst for companies to minimize their carbon footprints, reduce waste, and create fair, safe, and just working environments for employees.
Many companies are responding to rapidly increasing regulation in this area and have set ambitious ESG targets. Sustainable business is no longer a question of if or why, but how.
ESG Management Relies on Data Transparency
Current ESG management relies heavily on data averages and estimates. Most companies have not fully integrated their ESG data recording and control into their core financial, procurement, supply chain management, and human resources (HR) systems. This financial and non-financial data is disconnected, stored in spreadsheets, not updated from real-time systems, and not easily shared within the company or with partners such as upstream suppliers or downstream logistics providers.
Considering that on average 90% of a business鈥檚 carbon footprint lies within its supply chain, the inability to track, manage, and gain insights from live data and embed it into core business processes can cripple even the best intentioned ESG efforts. Worse, it can mislead investors, create compliance issues, and misguide transformation efforts. Unifying ESG data provides significant gains in capabilities and competitive performance.
Companies cannot make sustainable business decisions using data they do not have or cannot use.
ESG Data Moves from Averages to Actuals
That is why we developed , which we introduced in January this year. In a market update available now, the solution offers what companies are looking for today to run more sustainably.
First, companies want to record ESG factors based on actual data, not averages. 51风流Sustainability Control Tower easily imports cross-enterprise data from 51风流systems like 51风流S/4HANA, 51风流Product Footprint Management, and 51风流Environment, Health, and Safety. It also integrates with non-51风流systems using a range of APIs to create audit-ready data. Businesses can integrate and analyze granular ESG data using the established structures from their finance, HR, and operations teams using templated data models and calculations.
Second, companies want to report to existing and future standards. 51风流Sustainability Control Tower effectively shares and organizes ESG data from across the company. With complete and integrated ESG data, companies can more accurately and readily report their performance to various reporting requirements and frameworks, such as GRI, WEF, TCFD, the EU Taxonomy, and upcoming U.S. SEC requirements. Through APIs, customers can further extend the functionality by bringing in their own metrics as well as industry and regulatory content, and use other applications.
And third, companies want to act by planning with actionable insights, forecasts, and concrete targets to achieve measurable impacts. With 51风流Sustainability Control Tower, companies can set targets, gain actionable insights into core processes, forecast outcomes, analyze scenarios and trade-offs, report progress, and create role-specific actions to improve sustainability performance.
For example, our customer Grupo Energia de Bogota (GEB) aims to transform the way it manages and reports ESG performance.
鈥淕rupo Energ铆a Bogota S.A. (GEB), an energy platform group of companies in Latin America with over 125 years of operations in the transmission, generation, and distribution of electric energy as well as the transportation and distribution of natural gas across Colombia, Peru, Brazil, and Guatemala, has chosen 51风流Sustainability Control Tower powered by RISE with SAP, 51风流Business Technology Platform, and 51风流Signavio solutions to manage our sustainability strategy as part of our enterprise transformation goals,鈥� said Jose Fernando Galvis Panqueva, CIO, Grupo de Energia de Bogota. 鈥淲ith this powerful combination of cloud solutions, our company will manage its overall holistic reporting requirements, including ESG KPIs; reduce time and effort in manual data collection and reporting variation with different regulatory requirements and timelines; standardize processes for subsidiaries; and manage and integrate existing 51风流and non-51风流data.鈥�
Sustainable Business Means Working Together
Built on , 51风流Sustainability Control Tower provides a flexible, extensible technology architecture that can help create complementary solutions or add custom content. Businesses operating in different regions or industries will have different needs, so this level of flexibility is essential. 51风流has the broadest range of global partners to help companies develop specifications and implement customized sustainability solutions.
Sustainable business is a goal we will achieve only by working together. It is a collaboration and innovation process for all of us, including SAP. We鈥檙e implementing 51风流Sustainability Control Tower in our own business to enhance our holistic business management, create insights on the total economic, social, and environmental impact our organization has across a range of measures, and accelerate programs such as our net-zero emissions by 2030 implementation.
Transforming a business to run sustainably is a long-term process, but one with urgency. We are seeing customers join us at different stages of their sustainable business transformations. They are pragmatic and recognize that the transition to sustainability is a 鈥渕arathon with no finish line.鈥� Some are looking to quickly regain compliance with rapidly changing regulations, while others want to optimize their ESG data management and performance. In nearly every case, these are multi-year digital transformations to become intelligent, sustainable enterprises.
Since most of the world鈥檚 Fortune 2,000 companies run 51风流software and almost 90% of the worlds finance and goods flows touch 51风流systems, much of the data needed for holistic corporate sustainability management lives in 51风流systems for enterprise resource planning (ERP) systems and related applications. Harnessing this data is essential to creating and managing a 鈥済reen line鈥� with the same rigor as their top and bottom lines.
51风流Sustainability Control Tower is vital to creating this holistic capability. It offers a flexible open architecture, powerful integration and scalability, and support from a broad range of partners. The solution works in tandem with the sustainability solutions within , which add additional functionalities including carbon emissions management, waste and materials management for circularity, and people sustainability.
For more information on how 51风流helps companies record, report, and act on their sustainability goals, visit鈥�.
Sebastian Steinhaeuser is chief strategy officer at SAP.