This was one of the nuggets Gavin Starks, founder of , shared during a recent , hosted by Tom Raftery, global vice president, futurist, and innovation evangelist at SAP. Read on to find out what Starks thinks companies should do to deliver on their net-zero commitments.

Decentralize Data, but Maintain Control

Icebreaker One had its genesis in the Open Banking Standard that Starks helped develop in the UK, allowing financial institutions, government regulators, startups, and others to share data easily. He envisioned bringing the same large-scale data interoperability to sectors involved with achieving net-zero commitments.

“We spent a couple of years talking to hundreds of people and, whether it was someone from a hedge fund, insurance company, engineering firm, or elsewhere, the conclusion was that we just need all the data,” said Starks. “However, the natural response from countries, big organizations, or multinationals is to build a Big Data portal and put all the data in one place. That doesn’t work.”

Instead, Starks launched Icebreaker One as a decentralized, secure way to share net-zero data across markets and the public and private sector, supporting benchmarking, progress metrics, and compliance reporting.

“The blueprint we got from open banking is to leave the data where it is. Then when it’s needed, provide consent within a tightly controlled process so that your risks and controls are managed,” said Starks. “We want to bring together the legal components, the business units, the regulators, and so on. If we construct this in a way that’s very repeatable, we can connect people rather than collecting all the data.”

Define Relevant Data: Is This Decision-Worthy?

Starks was the first to admit that measuring and reducing CO2 emissions requires sharing across vastly diverse, distributed, and decentralized networks of information. He said that Icebreaker One is building out use cases, incorporating the entire data value chain, including customers and supply chain partners. Working out details such as liability, dispute resolution, and inter-organizational relationships will be painstaking, but worthwhile.

“Rather than talking about real-time data, we talk about relevant time data, meaning what’s decision-relevant data. As we layer this together with other information, we’re looking at the full scope of data required for material impact,” he said. “We’re trying to unlock a web of net-zero data. And that connects financial information, engineering information, and environmental data to help inform net-zero decisions.”

Measure the Impact to Realize the Net-Zero Vision

Starks advocates a multi-dimensional approach that brings government and industries together, sharing actionable information. In other words, let the data show how you’ll deliver a low carbon future.

“We’d love to see information flows about the demonstrable net zero at the design stage, the construction stage, the operational stage, and the decommissioning stage of infrastructure projects so the information can flow to people who need it,” he said. “This includes people in the financial community who need to make investment decisions, the engineers who need to know what works, and the policymakers who need to help unblock things that are in the way and amplify things that will accelerate that change.”

Three Net-Zero Questions to Ask

After attending COP26 last year, Starks was concerned but fired up to move ahead with the next climate change strategies.

“The levers of change have to be a combination of government and policy, large companies, and the investment community driving that change,” he said. “The action for consumers and for citizens is to ask your pension provider, your bank, your insurance company, what is their net-zero strategy? And how are they going to prove it? The third question is how your chief executive’s remuneration is tied to delivering that target.”

Trusted Data Strategy of the Future: Connect, Don’t Collect

As net-zero demands grow, Starks advised people to resist “natural corporate antibodies” against data sharing and open up the exchange of information. He also called for systemic yet realistic thinking to transform risk modeling and business behaviors for short- and long-term progress aligned with net-zero commitments.

“The richest companies on earth have made their money by connecting data. And through those connections, their data increases in value,” he said. “You need a dose of realism…There are structural changes that will happen, but you also have to demonstrate the business value along the way.”

No doubt one of the major challenges for sustainable business will be cultural, replacing age-old competitive conventions with practices grounded in the collective good. With the right policies and technology, we can surface and share the data that will help save our future.

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The cloud-based solution’s dashboard provides executives a commanding view of business operations and enables faster decision-making in response to events that, if unrecognized, would imperil company objectives.

“The release of 51ˇçÁ÷Sustainability Control Tower represents another key milestone on our mission to establish the ‘green line’ alongside the top and bottom lines as key dimensions of performance,” says Gunther Rothermel, head of 51ˇçÁ÷S/4HANA Sustainability Management. “Based on the power of 51ˇçÁ÷Business Technology Platform, the solution provides the necessary agility and flexibility to quickly adapt to evolving and changing requirements without having to write code.”

enables companies to transform into intelligent and sustainable enterprises based on financial as well as environmental, social, and governance (ESG) indicators, allowing them to fully assess global impact both within their operations and across their business networks.

“The very first thing companies need to do on their path of becoming sustainable enterprises is to understand their environmental footprint based on facts and figures,” says Jan Gilg, president of 51ˇçÁ÷S/4HANA, SAP. “Using these insights, 51ˇçÁ÷Sustainability Control Tower combines a company’s critical ESG metrics into one aggregated view, helping leaders take informed decisions to shape a better, sustainable future.”

The Push to Become More Sustainable and Socially Responsible

A number of drivers – ecological, economic, and societal – are currently motivating businesses and entire industries to make their operations more sustainable. Companies have taken notice, for example, that investors, shareholders, regulators, and consumers increasingly demand responsibly derived products and services with a smaller environmental footprint.​

In a , the share of sustainability-marketed products grew more than seven times faster than other products, delivering 54.7% of CPG market growth. According to The World Bank, have already been implemented worldwide. A confirmed that younger generations want to work for companies with a purpose beyond profit.

Most recently, the ambitious goals discussed at the (COP26) in Glasgow made it clear that businesses are under growing pressure to accelerate their sustainability efforts in conformance with regulations and that ESG-related KPIs have become part of the “license to operate.”

In a of business professionals who are knowledgeable about their organization’s sustainability goals, actions, and reporting methods, 17% of respondents believe environmental issues are already materially affecting their companies’ finances and operations.

But, as with every new venture, there are challenges. Early adopters seeking a complete picture of their ESG impact struggle with many reporting frameworks and standards. This hinders their ability to produce consistent and comparable investor-focused disclosures, creating a negative impact on global business. The International Federation of Accountants that fragmented financial reporting systems cost the global economy US$780 billion per year.

Embedding Sustainability into Business Processes

51ˇçÁ÷Sustainability Control Tower addresses fragmented financial reporting head-on by giving companies tools to extend their top- and bottom-line optimizations to the “green line,” based on sustainability KPIs. Using a data-driven approach, businesses can now embed sustainability throughout their business and gain actionable insights across the value chain to enable the transition to low-carbon business processes.

“The insights from combined data provide a continuous view on a company’s performance that manual processes based on spreadsheets cannot match,” says Rothermel. “Simplified steering, reporting, and performance management meet the requirements of a growing number of legal obligations as well as the emerging sustainability standards.”

Users can drill down into strategic areas within the company and across a business network to make informed decision-making based on financial and pre-financial (ESG) indicators. An optimization can then be made between costs and greenhouse gas emissions. For example, a company’s chief financial officer could quantify the total impact of a business activity on the environment and society and manage trade-offs based on a comparable monetary currency.

51ˇçÁ÷Sustainability Control Tower uses the World Economic Forum’s as a foundation. These can be applied by companies to align reporting on performance against ESG indicators and include non-financial disclosures centered around four pillars: people, planet, prosperity, and principles of governance. The Stakeholder Capitalism Metrics promote alignment among ESG frameworks and create data points that are comparable between companies, regardless of industry or region.

Co-Innovating with Customers and Partners

As part of its co-innovation model, 51ˇçÁ÷has worked closely with numerous customers and partners to test 51ˇçÁ÷Sustainability Control Tower during development to ensure it meets market requirements and is focused on users’ needs. Customer feedback is continually used to improve the product and adapt the road map to customer priorities. Partnerships with BCG, Deloitte, EY, and PwC will help reinforce SAP’s strong value proposition to its customers on ESG reporting and climate compliance.

51ˇçÁ÷has long been committed to fully integrating sustainability into its strategy and business model, and recently achieved top scores as an ESG leader by the Carbon Disclosure Project (CDP) and Dow Jones Sustainability Indices (DJSI). It is only natural, therefore, for the company to apply 51ˇçÁ÷Sustainability Control Tower in its own operations.

“At SAP, we believe in managing business success holistically and have been reporting on our financial, social, and environmental performance in one since 2012,” says Daniel Schmid, SAP’s chief sustainability officer. “We are excited about being an early adopter of 51ˇçÁ÷Sustainability Control Tower, which will help us further simplify and automate our reporting processes by enabling us to integrate financial and pre-financial data on an ongoing basis. Based on the insights derived from the combined data we can manage and steer the company performance while minimizing manual processes.”

51ˇçÁ÷Sustainability Control Tower is one of numerous sustainability solutions 51ˇçÁ÷released in 2021. In November, the company introduced 51ˇçÁ÷Responsible Design and Production, a solution for designing products sustainably and transitioning to a circular economy. With 51ˇçÁ÷Product Footprint Management, introduced in September, companies can gain visibility into carbon footprint data throughout a product’s supply chain, enabling intelligent supply chain decisions that improve sustainability KPIs. This product-related carbon footprint data – collected during production, material sourcing, and transport – can be used by other solutions, such as .

Climate change is widespread, rapid, and intensifying, with some trends now irreversible, according to the recent .

The science is clear: unless immediate, fast, and large-scale action is taken to reduce emissions, the average global temperature is likely to reach, or cross, the 1.5° C warming threshold within 20 years. The alarming results are already with us, ranging from droughts and heat waves to wildfires and devastating flooding worldwide.

While much hope is focused on a green recovery, the window of opportunity is closing fast. The latest report from the International Energy Agency (IEA) predicts that energy-related , an increase of nearly 5% year-over-year and the second-largest in history, taking us back to pre-COVID-19 peak levels.

The urgency to dramatically change course and accelerate decarbonization has never been higher. But only when businesses are moving beyond their siloed approaches, commitments, and climate pledges to fully embrace sustainability and embed these ambitions in an integrated way will we be able to drive the systemic change needed.

It is a journey toward embedding sustainability across everything we do.

Moving Away From Add-On to Core

Companies need to avoid thinking of sustainability as only an add-on to their strategies and operations. They need to integrate it across the business. Rather than defining a separate sustainability strategy, it is crucial to .

A first step toward 51ˇçÁ÷realizing this was linking sustainability to our purpose of helping the world run better and improving people’s lives. The objective: create positive economic, environmental, and social impact within with special focus on climate action, circular economy, social responsibility, and holistic steering and reporting.

This is reflected not only in the updated 51ˇçÁ÷vision to “reinvent how the world runs as a network of intelligent, sustainable enterprises,” but also in the executive compensation that rewards Executive Board members for customer loyalty, employee commitment, and SAP’s carbon impact, along with financial performance.

Enabling Climate Action Through Technology

The IPCC report has once again highlighted that harnessing the innovation power of enterprises has to be at the center of fighting climate change. For SAP, this means using digitalization to contribute to the United Nations Sustainable Development Goals (UN SDGs), .

In collaboration with customers and partners, 51ˇçÁ÷is working to optimize material, financial, and energy flows throughout end-to-end business processes in order to address planetary and social challenges. For example, the company’s multi-year Climate 21 program helps build analytical and transactional capabilities into enterprise applications that can help 51ˇçÁ÷customers understand and minimize the greenhouse gas footprint of their products and operations along their value chains.

During the in April, sustainability management by SAP was introduced, providing an expanded portfolio of sustainability-specific solutions, including 51ˇçÁ÷Product Footprint Management, which has been available since September 2021. There is more to come with the releases of the and 51ˇçÁ÷Sustainability Control Tower solutions in the next months, as will be shown during

Foundries locations Berlin and Munich are fostering startup innovation by setting up the Sustainable Future program together with Accenture. The equity-free program is designed to propel digital transformation in four target areas: carbon tracking and trading, resource efficiency, climate risk tracking and mitigation, and circular economy.

Setting Ambitious Targets

In addition to harnessing innovation, the climate emergency calls for bold targets for decarbonization. By mid-2021, countries representing around 65% of global carbon dioxide emissions and more than 70% of the world economy have made ambitious commitments to carbon neutrality. The U.S, the European Union, Japan, the Republic of Korea, and others — in total 126 countries — have pledged carbon neutrality by 2050; China says it will do so before 2060.

The private sector also needs to step up. More than 1,900 companies, including 51ˇçÁ÷in 2017, have set emissions reduction targets grounded in climate science through the .

In 2019, 51ˇçÁ÷raised its commitment and adopted a 1.5° C science-based emissions reduction targets aligned with a net-zero future. However, the journey started much earlier; back in 2009, 51ˇçÁ÷set the first goal of reducing its global carbon emissions to the year-2000 level by 2020. This target was met at the end of 2017, even though 51ˇçÁ÷grew more than fourfold over the period.

The next milestone is 2023, when 51ˇçÁ÷aims to be carbon neutral in its own operations – two years earlier than previously envisaged. This includes all direct (Scope 1), indirect (Scope 2), and selected categories of value chain (Scope 3) carbon emissions, such as business flights, employee commuting, paper consumption, and external data centers (co-locations and hyperscalers).

Monitoring and Reporting

It is essential to measure and monitor progress on the path toward achieving these targets. For example, 51ˇçÁ÷has increasingly embraced holistic steering and reporting because connecting financial and pre-financial performance leads to better management decisions and business success.

SAP’s sustainability and annual reports were merged into the in 2012. Since then, both material and immaterial value creation have been at the center of the company’s reporting and have been placed on an equal footing. Besides key financial information, environmental progress, workforce information, and social investments have been made transparent. In addition, an internal sustainability dashboard allows employees to explore the key sustainability key performance indicators (KPIs), such as women in management and carbon emissions by their country, location, and line of business, with updates every quarter.

Our reporting shows that in 2020, 51ˇçÁ÷was able to overachieve by 43% on its target for net carbon emissions in 2020, generating 135 kilotons instead of the anticipated 238 kilotons. This trend continued in the first half of 2021, during which SAP’s carbon emissions totaled 45 kilotons compared to 90 kilotons in the first half of 2020 (-37%).

The low emissions level is a consequence of the ongoing COVID-19 pandemic, as well as the introduction of Pledge to Flex, which enables a more flexible mix of remote and onsite work. 51ˇçÁ÷believes this trend will continue and has just announced in its that it has lowered its 2021 carbon emissions outlook from 145 kilotons to a range of 90-110 kilotons.

Taking Action: Measures of Implementation

To become carbon neutral in its own operations by 2023, 51ˇçÁ÷is following a three-pillar approach: avoid, reduce, compensate.

• Avoid: Whenever possible, 51ˇçÁ÷aims to avoid the creation of greenhouse gases. This is a top priority, supported by, for example, using virtual telecommunication instead of business flights.
• Reduce: If greenhouse gas emissions cannot be avoided, 51ˇçÁ÷aims to drive efficiency and reduce all types of emissions; for example, building efficiency, data center operations, carpooling and car sharing, and e-mobility.
• Compensate: 51ˇçÁ÷has extended its compensation models for travel. For business flights, it has introduced an internal carbon price to offset related carbon emissions. If greenhouse gas emissions cannot be eliminated altogether, 51ˇçÁ÷aims to reduce them through innovations in the areas of building efficiency, data center operations, carpooling, and car sharing, as well as e-mobility. For example, 51ˇçÁ÷has powered its own data centers and facilities with 100% renewable electricity since 2014, implemented an environmental management system with ISO 14001 certification in more than 30 countries and ISO 50001 at headquarters, adopting green IT initiatives in order to foster sustainable IT equipment usage and promoting tools such as as a default search engine.

In 2020, 51ˇçÁ÷implemented additional energy and climate measures within its operations, ranging from opening a new office with energy-efficient design in Australia and implementing more efficient data center technology in Germany to introducing a bike fleet at 51ˇçÁ÷Hungary as well as a flexible mobility budget in Germany and installation of photovoltaic systems in Austria.

For emissions that cannot yet be reduced or avoided, 51ˇçÁ÷thirdly invests in high-quality carbon credits. For example, 51ˇçÁ÷has been a long-term investor of the Livelihoods Carbon Funds (LCF) since 2012. 51ˇçÁ÷has also donated funds to restore ecosystems and improve people’s lives. In support of the UN Decade on Ecosystem Restoration 2021-2030, 51ˇçÁ÷recently joined the 1t.org corporate alliance, which aims to conserve, restore, and grow trees worldwide, with a pledge to plant 21 million trees by the end of 2025.

I am proud that SAP’s efforts to combat climate change and to strengthen its transparent reporting are externally recognized. The non-profit organization CDP included 51ˇçÁ÷on its , thereby granting us the top rating for leading in environmental transparency and action.

Partnering

51ˇçÁ÷recognizes that strong partnerships are an invaluable asset in tackling climate change. This is why we became a founding member of the European Green Digital Coalition and joined the World Economic Forum Stakeholder Capitalism Coalition and CEO Climate Leaders as well as the World Business Council for Sustainable Development (WBCSD), complementing our previous engagements with the UN Global Compact, the We Mean Business Coalition, the Value Balancing Alliance, the Ellen MacArthur Foundation, and many more.

In addition, we signed the calling for greater climate ambition and we launched Chasing Zero, a new initiative that will feature executive thought leadership, best practices, and insights into a sustainability-related transformation of 51ˇçÁ÷and its global ecosystem to achieve zero emissions, zero waste, and zero inequality. The transition to a circular economy remains central to our vision for a world of zero waste and plastic free oceans by 2030. Consequently, we support stronger circular economy policies, such as the Worldwide Fund for Nature’s OneSource Coalition and the Ellen MacArthur Foundation’s Extended Producer Responsibility endorsement.

Daniel Schmid is chief sustainability officer of SAP.

With a backdrop of , Belgium, the UK, and China, and with in Greece, Italy, and the west coast of the , a new major United Nations (UN) scientific report in essence . The Intergovernmental Panel on Climate Change (IPCC) concluded the treaty is almost surely out of reach.

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While many are turning to the public sector to take the wheel, the private sector is waking up. As Kimberly Nicholas, scientist and author of , told , “As much as any other sector, businesses benefit from a stable, predictable climate. The more we let the climate warm, the harder it is to adapt.”

While businesses look to lower the risks of their supply chains, impacted often by these natural phenomena as well as geopolitics, they are also increasingly looking at how their supply chains might be impacting the environment.

For instance, large cargo ships, which are the standard oceanic transport of material and goods, expel 2.9% of global carbon dioxide emissions — as much as the South American continent produces. Interestingly, one solution being considered is taking advantage of wind, which is generated by changes in air temperature. A number of are already in use, serving as a proof of concept for wind propulsion.

Business leaders are increasingly recognizing the importance of sustainability, with 86% of respondents in the Oxford Economics survey “” noting it as a competitive differentiator.

And what is 51ˇçÁ÷doing about this? Earlier this year, we introduced to help customers align with their business partners to manage commercial flow while gaining insights into sustainability opportunities. Collaboration through this network addresses design, manufacture, shipping and delivery, and the maintenance of products in order to lower carbon footprints while reducing waste.

Throughout the end-to-end design to operate process, many elements help customers to create a with thinking green, embracing the circular economy, and supporting transparency. Companies can gain visibility into carbon footprint data throughout a product’s supply chain, bringing the ability to take sustainable supply chain decisions based on actionable insights. Product-related carbon footprint data, such as for production, material sourcing, or transport, from 51ˇçÁ÷Product Footprint Management can be utilized in 51ˇçÁ÷Integrated Business Planning for Supply Chain.

51ˇçÁ÷has embraced an end-to-end sustainability mission to address the three pillars of sustainability: economic, social, and environmental. This approach addresses customer priorities: profits, protecting the planet, and people.

The 51ˇçÁ÷solution portfolio supports these principles of sustainability by embedded them in products. For example the Climate 21 initiative address areas including sustainability index reporting and circular economy through the design-to-operate pillars of design, manufacturing, logistics, and assets.

The individual pillars of design to operate addressĚý customer needs around recyclable and environmentally sustainable products, ethical sourcing and traceability, reduction of waste and lowering of emissions, health and safety of assets and people, overall reduction of carbon footprint through efficient planning and logistics management, and efficient operation of assets to reduce energy consumption. This eliminates a single-dimension approach to sustainability around only one or two topics.

While the IPCC’s conclusions do not provide a feel good moment, they do offer another strong incentive for companies to examine how their supply chains can make the world a better place. Not only is , it’s taking center stage.

Franz Hero is head of 51ˇçÁ÷Digital Supply Chain Development.

But the race to “net zero” for the automobile industry is still in the first lap, and the route promises to be long and arduous. Greenhouse gas emissions from the industry account for more than 9% of global emissions – equaling those of the entire European Union. To achieve their individual sustainability targets, companies are dependent on each other for reliable and verifiable data.

Decarbonization Is All About the Data

Becoming carbon neutral requires managing the carbon footprint of individual products in the supply chain, and to achieve this companies need transparency into the carbon footprints of their upstream suppliers – referred to as . The problem is that only 21% of business executives are satisfied with the quality of their environmental data, according to a global research study from SAP.

But more accurate carbon footprint data is on the way. “Until now, companies have been using averages to calculate carbon footprint at a product level because there’s been a lack of accurate, granular emissions data and no consistent methodology,” said John Revess, director Net Zero Transformation at the World Business Council for Sustainable Development (WBCSD). “To remain a part of global supply chains, it will be necessary for companies to accurately calculate the carbon footprint of their products based on measured values,” predicted Revess. As a member of WBCSD, 51ˇçÁ÷and other companies are defining a for the exchange of carbon emissions data.

“To meet our decarbonization goals, we depend on credible data from our suppliers on the carbon footprints of the components we build our vehicles with,” said Ralf Pfitzner, global head of Sustainability at Volkswagen, at the .

The two-day online meeting focused on how companies are applying new technologies to reduce their environmental footprint and manage limited resources. “We decided to join 51ˇçÁ÷in the co-innovation of a digital carbon tracking tool and database, and this is really exciting because there is obviously a demand,” said Pfitzner.

Volkswagen and 51ˇçÁ÷are working together toward decarbonization in other ways. In 2020, their CEOs Herbert Diess and Christian Klein joined the . The Alliance’s 10 European business leaders have committed 100 billion to decarbonizing their companies and products and are calling for far-reaching climate protection measures.

Massive Investments Necessary in Electrification and Digitalization

VW is to help put its decarbonization challenges in the rear-view mirror. The underlying reasons for companies’ investments in environmental issues varies, spanning industry regulations (29%) to society’s approval of their organization (27%) and strengthening company reputation (26%). Uncertainty as to how to embed sustainability into business processes and IT systems is seen as the greatest barrier to implementing plans for action, one study concludes.

Despite the challenges, VW’s Pfitzner is optimistic about achieving the company’s decarbonization targets. VW’s head of sustainability expects digitalization to play a major role in this transformation. “Beyond green electricity, there are plenty of opportunities where digitalization will help us reduce our carbon footprint, for example by hooking the manufacturing data into the cloud and having more efficient programming of robots,” he said.

Pfitzner reiterated along the entire lifecycle of its cars, emphasizing the need for intermediate milestones. “The coming decades will be essential for the transformation of transport and the car industry. By 2030, we intend to reduce the lifecycle carbon footprint of our passenger car portfolio by 30% compared to 2018,” said Pfitzner.

No Carbon Neutrality in Isolation

Although nearly two-thirds of the global economy is covered by net zero targets, achieving them will require systems thinking and collaborative action among businesses of a type and scale that has never been done before, , partner, Deloitte UK. “The proof will be in the implementation,” she predicted.

“No business or country can become net zero in isolation,” said Routh. “Whether you are looking at energy supply, transportation, infrastructure, government, or communities, they all need to act in a coordinated way.”

One of the biggest challenges for companies, says Routh, is embedding climate transformation into their business strategies and decision-making processes. This requires data transparency, she emphasizes, noting that there is no shortage of data, but the quality and usability of the data must be ensured.

Nicolas Peter, BMW’s chief financial officer, agrees. “Digitalization helps in a significant way to increase data quality, and, from an auditor’s perspective, data quality is key in order to perform his responsibility in the audit process,” he said at SAP’s Sustainability Summit. Peter left no doubts that BMW is counting on new technologies to help it : “The trend to sustainability has to be accompanied by digitalization. There is no alternative,” said Peter.

Digitalization Supports Decarbonization

“CEOs need transparency into their supply chains,” said Thomas Saueressig, head of Product Engineering and member of the Executive Board of 51ˇçÁ÷SE. “Through its strategic initiative , 51ˇçÁ÷is launching new solutions that help customers reduce their emissions and manage their carbon footprint.”

A new integrated set of solutions announced at the 51ˇçÁ÷Sustainability Summit includes 51ˇçÁ÷Product Footprint Management, which treats greenhouse gases like a ‘currency’ in the value chain. “Our sustainability management solutions enable companies not only to optimize their production facilities according to top line and bottom line, but also according to greenhouse gas emissions,” said Saueressig. As part of several joint sustainability initiatives with Accenture, 51ˇçÁ÷and Accenture are workingĚýto develop new 51ˇçÁ÷solutions that address sustainability and enhance existing core technologies.

The Need for Speed

Setting data quality issues aside, the most important factor for transforming businesses to net-zero is speed, said Deloitte’s Routh. “I think the world can master this, but my concern is whether it can do it quickly enough. The businesses that are going to succeed are the ones that understand and embrace the urgency.”

With our application portfolio, industry expertise, and extensive business network, we aim to enable emissions reduction and help tackle the ocean plastics crisis. We aspire to infuse sustainability into all relevant core business processes by focusing on regulatory compliance, operational excellence, and responsible innovation and growth — going beyond the traditional scope of value creation.

We believe that the path to a low-carbon future is circular. Only when businesses are moving beyond their siloed approaches, commitments, and climate pledges, fully embracing sustainability, and embedding these ambitions in an integrated way will we be able to drive systemic change. The good news is that . Evidence shows it can bring big opportunities and drive positive impact across industries, sectors, and lives. Working toward a circular economy can protect human health and biodiversity in many ways, including better use of natural resources, such as protecting water and land, thus mitigating the climate crisis.

The role of a circular economy must expand to successfully reduce emissions across sectors, as it is an essential component to achieving climate neutrality.

Sustainability management by SAP, launched last month at the first , showcases our suite of sustainability solutions that can help organizations in their journey to becoming a sustainable enterprise. We aim to enable organizations to assess and reduce their carbon footprint, increase resource productivity through circular processes, and run safer, sustainable business processes. This will also include industry-specific insights that combine operational and financial data across value chains embedded in core business processes.

Our portfolio addresses four dimensions of sustainable transformation.

Climate Action

With , planned for availability in the third quarter of 2021, our ambition is to provide customers with product footprint transparency. This will equip them with the insight to reduce carbon emissions across their value chains while enabling them to exchange data with their customers, suppliers, and business partners — driving transparency across a company’s scope 1, 2, and 3 operations.

Carbon is increasingly becoming a that can be tracked, traded, managed, and minimized like any other resource. Learn more about how to do this in the .

Circular Economy

With , planned for availability in the fourth quarter of 2021, we aim to further our vision for a plastic-free ocean by 2030. By preventing waste and pollution, using products and materials for longer, and applying circular principles, we can regenerate natural systems and make better use of finite resources. Successful execution on circularity will bring the upstream visibility for sustainable inputs together with downstream visibility, thus enabling reverse logistics and product authentication, promoting reuse across the product’s life cycle.

Extended producer responsibility is our first step in building resilience and circularity principles into material flows throughout value networks.Learn more about .

Holistic Steering and Reporting

The upcoming 51ˇçÁ÷Sustainability Control Tower solution will meet the hyper transparency needs of our customers on their environmental, social, and governance (ESG) performance through a higher level of granularity than historically available through reporting and disclosure. We want to provide focused analysis on the most important data in real time, protecting against business risks, tying it back to underlying business data.

A successful ESG information architecture must meet the needs of external audiences and internal managers at the same time. Explore how .

Socially Responsible Value Networks

The journey to support our customers’ ambitions has only just begun, and there is a huge potential to make this vision bigger and stronger through collaboration with our ecosystem. As an example, with 51ˇçÁ÷Business Network, we support continuous improvement in safe, equitable, and compliant businesses, within the company and across the value network. Other examples include the planned inclusion of the sustainability scores of suppliers during the purchase requisition process, so that procurers are informed on the sustainability profiles of their suppliers.

With sustainability management by SAP, we embed sustainability as a new dimension of success while delivering incremental innovations in our sustainability product portfolio, which is modular, integrated, and embedded along end-to-end business processes in the Intelligent Enterprise, starting with 51ˇçÁ÷S/4HANA. To execute on this vision, we will collaborate with our ecosystem across industries to innovate on top of 51ˇçÁ÷Business Technology Platform.

To achieve these ambitious goals, we need to continuously challenge ourselves and work together with customers, partners, non-governmental organizations (NGOs), and regulators for sustainable product life cycles across the value chains.

We are delivering jointly on the United Nations Sustainable Development Goals (UN SDGs) through the . .

To keep updated on the latest product innovations, visit the , which will guide you on transformative actions toward a more sustainable future.

Enabling tomorrow starts today.

Gunther Rothermel is senior vice president and head of Sustainability for 51ˇçÁ÷S/4HANA.
Anita Varshney is global vice president of Strategy for Sustainability for 51ˇçÁ÷S/4HANA.

Unsurprisingly, many companies are daunted by the seemingly insurmountable challenges, so 51ˇçÁ÷and Accenture are taking action to help them.

The Right Time

By now, we all know we must radically change the way businesses run, our impact on the environment, and the inequalities in society. That’s the only way to ensure a lifestyle that allows us to meet our current needs without compromising the ability of future generations to meet theirs.

The signs are everywhere. Consumers are increasingly aware about the negative environmental impact of products and services, such as fast fashion, single-use plastics, food waste, and excessive packaging. They are demanding accountability and responsible business models from their favorite brands. Governments are increasing regulations around carbon emissions and waste management and are demanding manufacturers to take responsibility for their impact on the environment.

Enterprises are under pressure from investors to include their environmental, societal, and governance (ESG) factors in their financial performance reports. And finally, employees are increasingly vocal about the environmental policies and actions of their employers. Businesses know they need to act, but few are rising to the challenge.

A study by Accenture found while the United Nations (UN) Global Compact’s Sustainable Development Goal (SDG) program has challenged companies to enhance their commitment to the UN SDGs, only 25% have set goals aligned to societal or environmental needs. Although CEOs acknowledge the universal call-to-action to achieve a better and more sustainable future for all, less than 50% have implemented sustainability into their operations.

The Challenge

As a survey of business drivers and actions to improve the environment at planetary scale conducted by 51ˇçÁ÷Insights revealed there are numerous barriers. Almost 7,500 CEOs and other business leaders from 16 industries around the globe participated in the survey. The top three reasons they cited for not moving ahead were lack of clarity on how to embed sustainability in business processes and IT systems, lack of clarity on how potential actions would align with strategy, and difficulty proving return on investment. Other factors include lack of funding, lack of expertise, or lack of support from senior management.

The challenges are daunting, which is why solving sustainability issues is not something individual corporations or governments can do alone.Ěý The way ahead involves . In this decade of delivery, partnerships are crucial.

A Will and a Way

Accenture and SAP, for example, have just announced they are expanding their long-term engagement to help companies embed sustainability across the full spectrum of their business operations. This will help unlock new value and realize long-term growth.

By combining 51ˇçÁ÷technology with Accenture’s , the partners plan to jointly create new solutions that can empower companies to accelerate their progress on decarbonizing their supply chains and capture their share of the projected $4.5 trillion economic growth that the .

Together, Accenture and 51ˇçÁ÷will develop the new 51ˇçÁ÷Responsible Production and Design solution, which will help companies consume fewer resources and build sustainability within the design process. It will also enable companies to apply analytics to the operational, asset, and process data collected across the value chain. Such an integrated view will help them determine clear sustainability goals and metrics across business processes.

As a result, companies will be able to reduce the costs of compliance and extended producer responsibility (EPR) regulation by designing and producing products with .

Accenture also supports SAP’s initiative, which allows companies in any industry to use analytics to measure and minimize carbon dioxide (CO₂) emissions and lower the carbon footprint across the product life cycle. Adding sustainability metrics across the supply chain provides an integrated view of environmental savings and helps optimize operations.

This type of co-innovation could help solve some of the barriers cited in the 51ˇçÁ÷Insights survey. Embedding sustainability in business processes and IT systems and measuring return on investment (ROI) gives enterprises a better understanding of how to fund their sustainability efforts. With time and success companies can gain expertise, set aside funds, and engage senior leadership to support their sustainability journey.

Call to Action

The Accenture study identifies three things leaders anywhere in any industry can do to start implementing and scaling plans of action to address climate change, social inequalities, and resource availability.

• Raise ambition and impact: Leaders must drive change in their own organizations, and through the disruption of market systems.
• Change collaboration: Key players must connect in new ways because meaningful transformation is not a solo sport.
• Redefine responsible leadership: Leaders must embrace their role as change agents to champion the sustainability agenda.

To learn more about the 51ˇçÁ÷and Accenture partnership for a sustainable future, join the virtualĚý, taking place April 28-29. The event will focus on how companies are reducing their environmental footprints and managing limited resources productively while steering and reporting their businesses holistically.

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The initiative is dedicated to enhancing transparency in corporate carbon emissions with the objective to ultimately decarbonize supply chains. The announcement was made at the virtual event.

The membership accelerates SAP’s momentum in sustainability leadership and innovation. Last year, 51ˇçÁ÷announced the Climate 21 program to help companies understand, minimize and disclose the full carbon footprints of their products and services.

“We are supporting businesses of all sizes and industries in determining the carbon footprint across their operations and supply chains down to the individual product level by embedding the corresponding capabilities into our core enterprise software systems,” said Christian Klein, CEO and member of the Executive Board of 51ˇçÁ÷SE. “By partnering with WBCSD and other forward-thinking companies, we will jointly find new ways to collect and share product carbon footprint data with their customers and consumers, which will give them a real competitive advantage while accelerating global decarbonization efforts.”

WBCSD is a global, CEO-led organization dedicated to accelerating the transition to a sustainable world. At the core of the network are its six work programs, including climate, energy and circular economy, which focus on helping realize the Sustainable Development Goals (SDGs) set by the United Nations General Assembly in 2015. WBCSD invites businesses, standards-setting bodies, technology experts and other decarbonization initiatives to join the Carbon Transparency Pathfinder in helping develop an effective model to help decarbonize industry through data transparency.

“We’re glad to be counting on SAP’s support, drive and expertise across our programs and projects – especially in the Carbon Transparency Pathfinder, which is a perfect initiative for 51ˇçÁ÷because their software and data management solutions are used by many of the world’s largest companies to run complex supply chain and manufacturing operations,” said Peter Bakker, president and CEO, WBCSD. “We look forward to innovating with 51ˇçÁ÷and other members to make real, tangible progress on sustainable development and climate action for a more sustainable world in line with the recently released .”

Visit the 51ˇçÁ÷News Center. Follow 51ˇçÁ÷on Twitter at .

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About WBCSD

WBCSD is a global, CEO-led organization of over 200 leading businesses working together to accelerate the transition to a sustainable world. We help make our member companies more successful and sustainable by focusing on the maximum positive impact for shareholders, the environment and societies.ĚýTheir member companies come from all business sectors and all major economies, representing a combined revenue of more than USD $8.5 trillion and 19 million employees. Their global network of almost 70 national business councils gives our members unparalleled reach across the globe. Since 1995, WBCSD has been uniquely positioned to work with member companies along and across value chains to deliver impactful business solutions to the most challenging sustainability issues.ĚýThe organization is a leading voice of business for sustainability, united by a vision of a world where more than 9 billion people are all living well, within planetary boundaries, by 2050.Ěý

About SAP

SAP’s strategy is to help every business run as an intelligent enterprise. As a market leader in enterprise application software, we help companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an 51ˇçÁ÷system. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. 51ˇçÁ÷helps give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want – without disruption. Our end-to-end suite of applications and services enables business and public customers across 25 industries globally to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, 51ˇçÁ÷helps the world run better and improve people’s lives. For more information, visit

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For customers interested in learning more about 51ˇçÁ÷products:
Global Customer Center: +49 180 534-34-24
United States Only: 1 (800) 872-151ˇçÁ÷(1-800-872-1727)

For more information, press only:
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51ˇçÁ÷Press Room; press@sap.com

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to 51ˇçÁ÷are intended to identify such forward-looking statements. 51ˇçÁ÷undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
Š 2021 51ˇçÁ÷SE. All rights reserved.
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Combining 51ˇçÁ÷technology with Accenture’s and broad industry knowledge, the partners are expanding their alliance to jointly create new solutions that can empower companies to accelerate their progress on fully de-carbonizing their supply chains and capture their share of the projected $4.5 trillion economic growth that the circular economy could bring.*

Through this extended partnership, Accenture and 51ˇçÁ÷plan to co-innovate and co-develop SAP’s new solution for responsible production and design, which includes capabilities that help companies embed sustainability metrics across their value and supply chains with a focus on product design and manufacturing. Using integrated data from across operations, companies can better design and produce products with less waste, improved recyclability and more recycled content. This will also help reduce the growing cost of compliance driven by new regulations for packaging and extended producer responsibility (EPR) regulations.

“Our work together will enable SAP’s customers, which include 92% of the Forbes Global 2000, to use their core systems to help drive their sustainability agenda, optimize their ESG performance and achieve their goals,” said Julie Sweet, chief executive officer at Accenture. “This expanded collaboration builds on our long history with 51ˇçÁ÷— including our joint partnership with the — and our shared commitment to drive adoption of the Sustainable Development Goals.”

Accenture also supports SAP’s initiative, which allows companies in any industry to use analytics to measure and minimize carbon dioxide (CO₂) emissions and lower the carbon footprint across the product lifecycle. For instance, research shows that emissions from upstream suppliers are on average over five times as high as those from direct operations.** With sustainability metrics added across the end-to-end supply chain, companies gain an integrated view of environmental savings and cost impacts and more easily optimize their operations.

“To successfully tackle the greatest threat to our world today, we need to collaborate at every level of business and society,” said Christian Klein, chief executive officer at SAP. “Building on our long-standing and trusted partnership, 51ˇçÁ÷and Accenture are joining forces to help our customers realize long-term growth in a sustainable way. We’re creating visibility into the environmental impact across the entire value chain, providing enterprises with the insights they need to take the right action and accelerate their transition to the circular economy.”

Last month, 51ˇçÁ÷and Accenture kicked off a global sustainability-focused accelerator program at Foundries. The Sustainable Future program, the largest cohort in SAP.iO to date, aims to help early-stage B2B startups drive digital transformation and innovation in four target areas: carbon tracking and trading, resource efficiency, climate risk tracking and mitigation, and circular economy. Thirteen startups have been selected to work with SAP.iO Foundries Berlin and Munich, in tandem with Accenture experts and leading companies in various industries.

“Implementing sustainable supply chain management and circular economy principles is an incredibly challenging task for companies, given the diverse set of ESG issues and multiple stakeholders involved,” said Bjoern Stengel, senior research analyst, Worldwide Business Consulting and ESG Business Services at IDC. “According to IDC’s research, issues around enterprises’ value creation process — product design and lifecycle management, materials sourcing, etc. — are the ESG topics that will generate the greatest near-term demand. This new offering from Accenture and 51ˇçÁ÷allows clients to generate critical, data-driven end-to-end insights that take into consideration non-financial metrics that are needed to build sustainable supply chains and help companies create shared value.”

This collaboration is the latest in a series of initiatives from Accenture and 51ˇçÁ÷that help businesses capture value from sustainability. The United Nations Global Compact with the support of Accenture and 51ˇçÁ÷SE, supporting the Sustainable Development Goals (SDGs), SDG Ambition in January 2020 and the SDG Ambition and Integration Guides in September 2020. Together, through the SDG Ambition Accelerator that began in February 2021, more than in 65 countries are being upskilled to apply these tools to their businesses.

About Accenture

Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, we offer Strategy and Consulting, Interactive, Technology and Operations services—all powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. Our 537,000 people deliver on the promise of technology and human ingenuity every day, serving clients in more than 120 countries. We embrace the power of change to create value and shared success for our clients, people, shareholders, partners and communities. Visit us at .

About SAP

SAP’s strategy is to help every business run as an intelligent enterprise. As a market leader in enterprise application software, we help companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an 51ˇçÁ÷system. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. 51ˇçÁ÷helps give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want – without disruption. Our end-to-end suite of applications and services enables business and public customers across 25 industries globally to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, 51ˇçÁ÷helps the world run better and improve people’s lives. For more information, visit

Note to editors:
To preview and download broadcast-standard stock footage and press photos digitally, please visit . On this platform, you can find high resolution material for your media channels. To view video stories on diverse topics, visit . From this site, you can embed videos into your own Web pages, share video via email links, and subscribe to RSS feeds from 51ˇçÁ÷TV.

For customers interested in learning more about 51ˇçÁ÷products:
Global Customer Center: +49 180 534-34-24
United States Only: 1 (800) 872-151ˇçÁ÷(1-800-872-1727)

For more information, press only:
Stacy Ries, SAP, +1 (484) 619-0411, stacy.ries@sap.com, ET
51ˇçÁ÷Press Room; press@sap.com
Alexander Aizenberg, Accenture, +1 (917) 452-9878, alexander.aizenberg@accenture.com
Julie Bennink, Accenture, +1 (312) 693-7301, julie.l.bennink@accenture.com

*Peter Lacy et al., , Palgrave MacMillan, 2020.
**CDP Supply Chain, “,” 2019.

Any statements in this release that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to various risks and uncertainties described in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC), including its most recent annual report on Form 20-F, that could cause actual results to differ materially from expectations. 51ˇçÁ÷cautions readers not to place undue reliance on these forward-looking statements which 51ˇçÁ÷has no obligation to update and which speak only as of their dates.
51ˇçÁ÷and other 51ˇçÁ÷products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of 51ˇçÁ÷SE in Germany and other countries. Please see for additional trademark information and notices.
Please consider our . If you received this press release in your e-mail and you wish to unsubscribe to our mailing list please contact press@sap.com and write Unsubscribe in the subject line.

The challenge this presents is huge, but so are the rewards. In Europe alone, .

Change in the Air

SMEs have compared with large corporations. But change is in the air. Pressure to act is as large companies pass their requirements on to suppliers.

BMW is a case in point. In July 2020, the German auto group of well over 10,000 suppliers, with the goal of reducing emissions per vehicle produced by at least one-third. The company uses carbon footprint as a criterion for awarding contracts for everything from materials and components to production equipment and tools. “Our aim is to ensure the most sustainable supply chain in the entire industry,” says Oliver Zipse, chairman of the Board of Management at BMW.

BMW’s German competitor Mercedes-Benz announced that more than 75% of its suppliers are committed to supplying CO₂-neutral parts to help it achieve its 2039 ambition of CO₂ neutrality.

Other examples of large enterprises that are working with their suppliers to reduce carbon footprint include and . Nearly half of CEOs at large companies are targeting sustainability in their business operations, according to the .

But it is not only the supply chain leaders that are adding climate action to their corporate policies. Increasingly investors, shareholders, consumers, and employees are looking to business to adopt ambitious climate-related targets. Countries, cities, states, and provinces are also adding to the pressure. Over or are planned worldwide. National and international regulations may soon require to be provided on product labels and descriptions.

Open Questions Without Adequate Answers

Matthias Weigold is familiar with the complex world in which SMEs currently find themselves. The director of the Institute for Production Management, Technology, and Machine Tools (PTW) at the Technical University Darmstadt is partnering with German manufacturers to test scenarios for energy efficiency and flexibility in manufacturing processes based on the availability of renewable energy sources.

“Many SMEs hear their primary customers saying, ‘Do something about your carbon footprint and do it fast.’ They are faced with a mountain of open questions without adequate answers,” he explains. “SMEs also know that if they react too slowly and without the necessary level of detail, they could lose their most valuable customers.”

To satisfy the demands of their customers for low-carbon production, SMEs will increasingly need to adapt their manufacturing operations to the pricing fluctuations associated with the energy mix of fossil and renewable energy. The scenarios are no longer hypothetical, according to Weigold: “Exceptionally led wholesale electricity prices to go negative in Germany.”

Complicating the situation are the myriad national policies and timelines worldwide, says Weigold, who provides an example. “Over 80% of the machine tools made in Germany are exported, with the lion’s share going to manufacturers in China. Now that , German SMEs are unsure how they should react.”

At the which makes it possible to test various production scenarios under real-world conditions, 51ˇçÁ÷and PTW are modeling enterprise resource planning (ERP) software to the manufacturing environment.

“By bringing two worlds together — the business software layer and the operational layer — we can influence the efficiency and flexibility of manufacturing processes,” Weigold says, adding that it is the first project of its type worldwide.

Turning Climate Action into a Competitive Advantage

51ˇçÁ÷expects the cooperation with PTW to help it refine its new software package that enables CO₂ accounting for SMEs over the entire supply chain. The solution makes it possible for companies to manage the CO₂ footprint for each product by combining their existing ERP system — for example, 51ˇçÁ÷Business One or 51ˇçÁ÷Business ByDesign — with an energy flow model for the process. 51ˇçÁ÷partners worldwide will be responsible for applying the solution to customers’ individual and industry needs.

that SMEs are prepared to manage their carbon emissions if they have the necessary support and tools. The recently launched is a brokerage for such resources. With a growing number of members, the hub could serve as a vital part of the implementation of ambitious corporate climate action.

Emissions are typically divided into three categories, or . The main targets of 51ˇçÁ÷Business Ecology Management are the Scope 1 and Scope 2 emissions of SMEs, which directly impact the upstream Scope 3 emissions of their customers.

“Supply chains make up the part of the carbon footprint, which are not under direct influence of a company, but have the highest reduction potential because they give organizations insight into the hot spots in their supply chain,” says Jochen Mayerle, business process architect, SAP.

Mayerle emphasizes that the new product is designed to be easy to use and its implementation does not require the hiring of an expert in sustainability. Niels Hermansen, founder of the Danish 51ˇçÁ÷partner BitPeople A/S, based in Denmark, agrees. “I like that 51ˇçÁ÷has taken the initiative in this area,” Hermansen says. “It understands that SMEs have the same requirements as big companies, but do not have the same resources.”

51ˇçÁ÷Business Ecology Management is currently being testing by numerous customers and is planned for launch the third quarter of 2021.

Sandra Thiel, Agile expert, and Chris Horak, global vice president of Solution Marketing, contributed to this story.

Although Mother Earth could take a deep breath, we still need to wean ourselves off fossil fuels. Greenhouse gas (GHG) emissions would have to be reduced by around 7% every year for the next 30 years in order to not exceed the 1.5 degree Celsius temperature limit set by the . Climate scientists have not therefore stopped sounding the alarm: The largest greenhouse-gas-producing economies must hit the ground running to veer off a destructive path.

Drivers for Sustainable Business

The COVID-19 pandemic has delivered an example of how quickly countries can mobilize against a common threat. Some leaders see a to the pandemic as an opportunity to forge a better world by reducing dependency on fossil fuels and stemming global warming. A new administration in the U.S. under president-elect Joe Biden has , which is almost certain to spur renewed global impetus in the battle against climate change. Biden’s transition team has already launched their , which carries the same name as SAP’s Climate21 initiative to help companies become sustainable businesses.

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There are number of drivers — ecological, economic, and societal — currently motivating businesses to make their operations more sustainable. Customers are demanding visibility into the carbon footprint of the products they purchase, as are shareholders and employees, who are looking for purpose and sustainability in their investments and livelihoods. Producers are taking notice, not least because national and international regulations may soon require such environmental impact information be provided on product labels and descriptions.

But does transparency have to come at the expense of profitability? No, says Toby Croucher, solution manager for Climate 21 and Sustainability at SAP.

“Sustainable businesses have the ability to measure the carbon footprint of their manufacturing processes and are able to direct investments to the right parts of their business in a timely fashion, enabling them to achieve both strong financial returns and decarbonized business models,” Croucher says. With the introduction of carbon pricing, he predicts strong demand for such solutions.

For those companies aiming to improve their carbon footprint across the supply chain, establishing GHG transparency is not something achievable overnight.

“It is about establishing long-term value in a carbon-constrained world,” Croucher explains.

Footwear Industry Takes a Step in the Right Direction

Every industry has exemplars of sustainable business practice, but few have gained as much attention as the shoe industry. The world consumes about 25 billion pairs per year, an average of three pairs per person. The result is _e, contributing about 1.4% to total global greenhouse gas emissions.

A pair of . This includes greenhouse gas emissions generated from conception and design, until it is eventually used and discarded or recycled. Some manufacturers are making strides to reduce the footprint of their shoes significantly. , have already gotten off on the right foot by targeting the zero-carbon shoe made of recycled, recyclable, or natural materials.

In 2019, Nike was able to reduce the average carbon footprint of its footwear and apparel products to 7.33 kg CO_2e per pair. As part of its , it plans to power its facilities with 100% renewable energy by 2025, reduce carbon emissions across its global supply chain by 30% by 2030, and divert virtually all of its footwear manufacturing waste from landfills.

It remains to be seen whether sustainability initiatives like Nike’s will gain traction with Generations Y and Z, but such strategies take time to develop and companies that get off to an early start are likely to reap the benefits sooner. Others may be forced to catch up by regulatory measures.

Carbon Emissions Accounted for Along the Entire Value Chain

In early 2020, 51ˇçÁ÷introduced a product that delivers transparency on the carbon emissions of a product across the entire value chain of a business, including production, raw materials, energy use, and transport. 51ˇçÁ÷Product Carbon Footprint Analytics makes it possible to compare each activity of a value chain to determine the amount of GHG released to make the product in each location.

“In the future there will be no difference made between cost, revenue, and GHG performance,” says Bettina Zedlitz, solution manager for Climate 21 and Sustainability at SAP. “We think that end-to-end ERP processes need to support multiple sustainability-related attributes of products and services, to gain insights for understanding and optimize the GHG footprint. We can give you the tools to analyze your business models and identify tangible actions to minimize emissions.”

51ˇçÁ÷Product Carbon Footprint Analytics is part of SAP’s Climate 21 program. .

As that sentiment becomes more firmly rooted in the public consciousness, enterprises are responding with new business models and a more circular mindset. While doing well and doing better are already reflected in the top and bottom lines, what is missing is the doing good part of the equation.

That’s why 51ˇçÁ÷leaders are convinced that to the top and bottom line is a crucial move. In the future, the success of a company will be determined based on all three of these dimensions. But any talk about top, bottom, or green lines must begin with a clear view of a company’s finances and its strategic plan to deliver on its mission.

Role of Reporting

“It is our ambition to maintain our position as the role model for sustainable corporate reporting,” says Christopher Sessar, head of Corporate Financial Reporting and chief accountant at SAP. “51ˇçÁ÷has been a frontrunner in assigning value and reporting on non-financial targets, allowing us to build a bridge between the financial and non-financial dimensions.”

As a member of the Sustainability Council at SAP, Sessar aims to improve reporting processes in non-financial dimensions and enhance the portfolio by embedding intelligent reporting capabilities on non-financial measures in 51ˇçÁ÷solutions.

Members of the council are nominated by the 51ˇçÁ÷Executive Board and are responsible for integrating sustainability into their core business area. Sessar’s role is to make sure the company’s sustainability objectives and financial practices are in full alignment, connecting economic performance with environmental and social impact.

Sessar supported the implementation of SAP’s award-winning integrated reporting strategy as well as its new finance strategy. He is inspired by his peers at companies such as Chanel, Siemens, and Burberry in programs like the . Such programs are designed to help senior finance executives determine the impact of external factors on price, navigate the changing business landscape, and deliver on ‘purpose.’

Connectivity Matrix

The importance of corporate sustainability reporting cannot be overestimated. Its role is to drive decision-making and strategy execution through transparency and early warning.

Sustainability-focused enterprises like Kering, which including Gucci, are developing ways to speak about their environmental impact in financial terms. Kering has developed a capital accounting methodology calledĚý, which measures and analyzes vital data like carbon emissions along the entire supply chain.

This makes the impact of the group’s activities visible and quantifiable by enabling the company’s use of natural resources to be translated into monetary values. To tighten the connection between profitability and sustainability, a portion of top management bonuses is based on their sustainability achievements.

For Sessar, Kering’s model and others, like PwC’s simulation of , are eye-openers.

“I was trained in the traditional interpretation of the accounting function,” Sessar explains. “By adding environmental and social values to a traditional balance sheet and profit and loss statement, the new models provide more meaningful and holistic insights into the true value creation process of an entity.”

51ˇçÁ÷has developed its own methodology for putting a value on non-financial performance indicators. Using regression analysis, the approach highlights how key environmental and social indicators connect to corporate objectives and metrics. An interactive infographic offers a range of this information. For example, clicking on Carbon Emissions will show that lowering SAP’s carbon emissions can have a positive impact on employee engagement because loyalty should rise as employees see their company act responsibly.

°ÚąŐ“Tłóąđ was SAP’s first attempt to put a price tag on environmental or social activities, such as training, or line items like energy consumption,” Sessar says.

The goal is to create one global standard taxonomy for internal and external reporting purposes that can be used regardless of industry or line of business. A global standard creates the consistency needed to compare companies across industries, giving shareholders a meaningful basis for making sustainable investment decisions.

“51ˇçÁ÷must take a thought leadership role in this process, considering that there are many touchpoints with our products and technology,” says Sessar. “We need to share our experience in reporting and analytics excellence.” Sessar goes on to explain that 51ˇçÁ÷became a founding member of the along with other forward-thinking companies like BASF, Mitsubishi, and Novartis, for exactly this reason.

The alliance is a non-profit organization operating on the premise that planetary boundaries and social needs form the basis for a stable business environment. “We want to change the way company performance is measured and valued,” says Sessar. “We can do it with a global measurement standard for disclosing the positive and negative impacts of corporate activity and guidance on how they can be integrated into business steering.”

Evolution of Non-Financial Metrics

Sessar realizes this is easier said than done. Being part of this alliance will allow 51ˇçÁ÷to work with like-minded companies to create the foundation to transform the way businesses measure and value their overall societal impacts, dependencies along the value chain, and monetary effect on a company’s value.

Ten years ago, it was unheard of to talk a lot about non-financial metrics during earnings discussions. “Over the years, there has been a tremendous shift in both directions,” he says. “Now, investors ask for, and 51ˇçÁ÷proactively shares, figures about customer satisfaction like the Net Promoter Score along with employee survey results.”

In its dual role as enabler and exemplar, 51ˇçÁ÷is not only developing solutions to help companies become more sustainable through intelligent decision-making; it is using its own technology to steer a clear course as it strives to make the world run better and improve people’s lives.

51ˇçÁ÷is using tools like 51ˇçÁ÷Analytics Cloud and 51ˇçÁ÷Digital Boardroom for global, real-time reporting activities. “We’ve been doing this for years, and it’s amazing to see how our reporting capabilities continue to grow,” Sessar shares. “The journey from manual reporting with Excel sheets to real-time reporting that provides instant transparency and tools for prediction and simulation is still ongoing, but changing fast,” he says. “We should use the momentum to move our social and environmental reporting to the next level, providing real-time insights, predictions, and simulations for the decision-makers steering our company.”

As a father of a two-year-old, Sessar reflects on the Climate 21 initiative and the early this year at the World Economic Forum in Davos: what good is all the extra wealth in the world generated from operating “business as usual,” if you can do nothing but watch it burn in catastrophic conditions?

Only a revolution in the way theĚýglobal economyĚýandĚýfinancial marketsĚýwork can save the planet from the climate crisis and secureĚý, and Sessar is determined to do his share by leading SAP’s accounting team on that path.

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Business transformation expert Herman Gyr said during the session, “This is the time to act, the only time to act. This is the moment that we all have to take action. The good news is that a lot of companies are signing onto to more sustainable practices.”

Facts about climate change put the need for urgency into perspective. Today, the world is currently measuring temperatures 1.1 degrees Celsius above pre-industrial levels. TheĚýĚýcalls for keeping global temperature rise below 1.5 degrees Celsius in order to prevent the worst effects of climate change. To do this, worldwide carbon emissions would need to be reduced by about seven percent each year for the next 30 years.

According to experts, this goal is virtually impossible, but not because of technological or financial limitations. The money and technology exists to accomplish this goal. The major challenge is not in overcoming these hurdles, but rather in modifying the way we live and the way we do business in order to bring carbon emissions down, along with other climatic factors.

Decisive Action by Leaders

How can we begin to bring carbon emissions down globally? It starts with leaders who are willing to lead by example and pave the way for practices that use fact-based data to reduce waste and emissions. Data insights enable businesses and individuals to reliably track emissions and analyze their impact on the environment, and ultimately the economy and society.

leaders like the European Space Agency (ESA) are keeping the pulse of the planet and using the data from their earth observation satellites to provide reliable resources for businesses and on the environment, which then allows the masses to strategically act. Amid a global pandemic, this seems daunting but during the session, ESA Director of Earth Observation Josef Aschbacher described how they are helping to tackle two crises at once.

ESA is using satellite data from space agencies across the world to maintain a dashboard that analyzes the impact of COVID-19 on the environment. For example, during national stay-at-home orders, air quality improved in some regions, but the dashboard showed how quickly pollution increased when the lockdowns ended. This fragile dependency on human actions stresses the need for long-term solutions.

During the session, the panelists explained how businesses across all industries can take five practical steps to have a lasting, sustainable impact on the environment.

1. Measure your current carbon footprint, then continuously measure it
2. Estimate your legacy footprint, or how much CO2 the business has put into the atmosphere over its lifetime
3. Communicate these measurements to encourage transparency and accountability
4. Commit to action and enroll others into the action plan
5. Contribute to carbon capture solutions and consortiums to work together

Collaboration is Key

With such a massive undertaking, collaboration is an important factor to slow climate change. The , jointly started by ESA and SAP, was developed with this in mind. By integrating satellite data from ESA Earth observation missions and satellite data provided by alliance partners onto 51ˇçÁ÷Cloud Platform, the partnership allows easy access, networking, and commercial distribution of data and products worldwide.

In January 2020, 51ˇçÁ÷joined theĚýCEO Carbon Neutral Challenge, which was issued in November 2019 by Gucci President and CEO Marco Bizzarri. Participating companies must adopt an annual strategy to avoid greenhouse gas emissions and reduce them throughout the supply chain using nature-based solutions. The challenge is designed to not only reduce emissions, but to support biodiversity and forestry worldwide.

Scalability Requires Technology

Along with collaboration, climate change is an issue that requires scalable solutions. For lasting, strategic impact companies need the ability to track emissions across the entire value chain, using data to highlight areas in which improvements can be made.

This is whatĚý51ˇçÁ÷Product Carbon Footprint AnalyticsĚýis all about. It is designed to empower companies to track carbon emissions by cost center, profit center, or plant. With this solution,ĚýmanufacturersĚýcan look at the data and find the places where emissions can be cut. Technology like this enables companies around the world to not only track their bottom line, but also their environmental impact.

The key to slowing climate change will be data integrated with advanced technologies, collaboration, and the urgency to act. During the session, Gyr said it best: “It’s a new world. So we have to step into it with new tools, new technology, new orientation, and a new mindset.” Together, we can save our planet.

For more on how 51ˇçÁ÷is actively working to slow climate change and enabling our customers to join us, read our .

“My role empowers me to make things happen,” the executive, who views himself as a change agent in a powerful position, says. If you consider that 70 percent of world transactions touch an 51ˇçÁ÷system in some way, it is clear that 51ˇçÁ÷software has a huge influence on the global economy. With that power comes responsibility.

“We need to have ambitious goals, because the challenges we face are immense,” Gilg says. “There is a huge demand to rethink how we live and work. We must become sustainable to survive.”

This mindset is critical for Gilg, who is also a member of SAP’s Sustainability Council. Members are nominated by the 51ˇçÁ÷Executive Board and are responsible for integrating sustainability into their core business area. Gilg’s role is to weave sustainability into the product portfolio.

Software Solves ProblemsĚý

that digital transformation is not the latest industry catchphrase. It is a movement, a significant shift in how companies operate, compete, and grow.Ěý The goal is to use technology to be more efficient, effective, and sustainable.

The coronavirus crisis has forced enterprises to realize how much work they still need to do in order to become digital. They now see the disconnect — what worked in a non-crisis mode was disrupted by the pandemic, uncovering broken processes. As a result, many companies are .

Gilg points out SAP’s unique advantages. First, 51ˇçÁ÷software is essential for all enterprise functions, from manufacturing, shipping, and delivering products to managing finances and human resources. Second, 51ˇçÁ÷understands that the world works through networks. Networks provide visibility into trading, ethical business practices, logistics, and inventories. 51ˇçÁ÷already owns the largest B2B procurement network with . 51ˇçÁ÷has also invested in the and 51ˇçÁ÷Asset Intelligence Network, and is now about to bring all those assets together to create a more simplified and unified networking experience.

New Dimension

As the company’s flagship product, 51ˇçÁ÷S/4HANA is a suite of business applications built to enable enterprises to run better. It already addresses two key dimensions: the top line and the bottom line.

“We decided to add a green line,” Gilg explains. “Adding the ecological angle provides transparency into the use of natural resources, available alternatives, suppliers, and transportation. Bringing the three dimensions together enables better corporate decision making.”

This philosophy all comes together in the Climate 21 initiative.Ěý Embedding sustainability as a new dimension of success into analytical and transactional applications allows ERP and intelligent enterprise systems from 51ˇçÁ÷to optimize the resources not only of an individual enterprise but across value chains — for the entire product life cycle.

This means that ERP is becoming a game-changer once again, and can help enterprises achieve their sustainability objectives and their commitments to the (UN SDGs).

“We’ve reached the end of the linear economy,” says Gilg. “We’re seeing the emergence of a circular model that has clear economic and environmental benefits. The waste of the past decades is not acceptable. We need software that addresses an end-to-end approach in all dimensions.”

Decade of DeliveryĚý

The need for urgent action has never been greater. is already impacting our daily lives, but we keep burning fossil fuels, cutting vast amounts of forests, and depleting nature’s stocks. The , yet once again the to stop the destruction of nature according to a recent .

Gilg sees a tremendous opportunity for SAP: “The goal of Climate 21 is to help customers understand and minimize the greenhouse gas (GHG) footprint of their products and operations along their value chains.”

To make it easier for enterprises to do that, 51ˇçÁ÷developed the 51ˇçÁ÷Product Carbon Footprint Analytics application, a carbon emissions accounting system. Aside from helping companies to reduce their own carbon footprints, sharing data with stakeholders can give enterprises a competitive advantage and accelerate their journey to a low-carbon economy. In terms of future innovation, Gilg envisions a sustainability ledger that supports multiple attributes and impacts of products and services, including energy, plastic, toxic ingredients, water, biodiversity, or land use.

Another climate-focused development is the Plastics Cloud, a new marketplace to expand the trade of recycled plastics and plastic alternatives.

Signs of Progress

While the need for even more action is crucial, there are signs of positive change. Customers are using 51ˇçÁ÷software for environmental and commercial success. Doehler was theĚý, and Swiss retail giantĚýĚýto support its journey to zero waste, enabling them to increase market share despite the crisis.

One of Gilg’s favorite success stories is Queen of Raw, a ĚýstartupĚý in New York using a textile sustainability application based onĚý51ˇçÁ÷S/4HANA. “Waste is a significant problem for the textile industry,” says Gilg, “making it a perfect target for sustainability efforts.”

Each year around $120 billion worth of textiles from across the supply chain goes to waste, causing huge environmental issues and economic loss. For some companies, it swallows up to 15 percent of their bottom line annually. Queen of Raw matches suppliers with unused textiles to potential buyers. The company worked with 51ˇçÁ÷to develop an easy-to-use automated process on a powerful back-end system.

This sustainability app uses tools like blockchain and machine learning to identify products, confirm the integrity of the suppliers, and match them to Queen of Raw’s 175,000 global users. The system also provides an environmental cost-benefit analysis when a successful match is made.

“Queen of Raw isn’t just doing good for the sake of good. It makes economic sense,” Gilg says. “With tools like this we can show people the return on investment and the value of the circular economics.”

Gilg says it’s not enough to tell our children we must protect the sea we swim in and the trees around us. We must show them that we are making a difference. “It’s up to us to decide what kind of a difference we make. That’s why I’m proud to tell them that I am a part of a company that looks out for the world they will live in.”

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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,Ěýthe , 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’s natural limits earlier and earlier — 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.ĚýWithout a healthy planet, there can be no basis for a return to healthy societies, resilient and restorative economies, and shared prosperity.ĚýAlthoughĚýCOVID-19 i˛ő , we clearly remain on an  a˛Ôťĺ . We must act nowĚýto 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’s entire annual budget on August 22 and will run on a deficit for the rest of the year?

So why aren’t we applying this logic to stay within our common budget, the Earth’s 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’t 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’s accounting system is still derived from Luca Pacioli’s thinking back in the 15th century, when he popularized the system of double accounting and the world was not yet facing today’s challenges, including climate change and resource depletion.

Luckily, the mindset is shifting. We are moving beyond Milton Friedman’s 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 51ˇçÁ÷that steering a company holistically — considering the financial but also social and green bottom lines — leads to better management decisions and better performing and more resilient companies.

For several years we have been investigating theĚýĚýas 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 ofĚýour engagement in the Value Balancing Alliance, we are working with like-minded businesses to transform how to measure and value a business’ overall societal impacts and dependencies. While this effort is still at the beginning, all dimensions are interwoven in today’s world.

Company leaders will need to do much more than manage their top and bottom lines to keep investors and other stakeholders happy.ĚýThey will also need to manage their “green line.” This requires openly disclosing, through aggregated reports,Ěýhow 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 — 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 “take-make-waste” 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 51ˇçÁ÷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 51ˇçÁ÷include ĚýandĚý. 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 , 51ˇçÁ÷launched 51ˇçÁ÷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’s 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.

After lockdowns took hold around the world and people’s everyday behavior changed overnight, many companies found their revenues shrank to near zero. For some — including household names from all industries — this meant filing for bankruptcy and citing the pandemic as a key reason for their demise. Many will already have had less-than-healthy balance sheets even before the spread of the virus brought such sudden change to their operations.

While adaptability is by no means a magical remedy, many of the companies weathering the economic downturn best are those that have evolved and diversified their business model over the years, staying closest to the pulse of their customers and the market as a whole.

Keys to Success

What helps a company to stay ahead of change and to be more resilient to sudden changes in the market? Insight and understanding – of every aspect of a business,Ěý customers, partners, and in fact the entire network in which it operates – are key. State-of-the-art software 51ˇçÁ÷S/4HANA is designed for this, providing unrivaled tools to manage a company’s finances along with its manufacturing, supply chain, procurement, sales, and service operations. As a system at the heart of the business, 51ˇçÁ÷S/4HANA enables users to:

• Deepen value chains and develop new business models
• Enhance and optimize existing business processes leveraging intelligent capabilities
• Transform business to become a sustainable and intelligent enterprise

ERP itself has adapted enormously since the early days: If you are still using tools that were cutting-edge a decade or two ago, you will struggle to keep up — let alone lead the way.

Introducing 51ˇçÁ÷S/4HANA Cloud Release 2008

51ˇçÁ÷has just released the latest update to its . Offering functional and usability enhancements across all industries and lines of business, the August 2020 release of 51ˇçÁ÷S/4HANA Cloud (release 2008) focuses on increasing efficiency, and specifically on helping to evolve business models for the future.

As business models in all industries are transforming rapidly, companies look to augment their product portfolio and grow revenue streams with more sustainable billable services, subscriptions, and solutions. Solution order management, enhanced in this release, enables the management of such business scenarios that offer a hybrid combination of sales and (often higher-margin) services with products into a single order. This provides a single view of all items of a solution: physical products and one-time and recurring services. Orchestration and monitoring capabilities are provided to manage the processing of such solution orders and automated creation of a solution order is supported through an API. Similarly, the work of service teams working on in-house repairs is simplified by decision support capabilities, automatic notifications when exceptions occur, and the ability to verify and release items from repair to billing without navigation to a different app. New capabilities for service quotation will increase the use of service quotes, from which service orders can be generated leading to greater process efficiency.

In 51ˇçÁ÷S/4HANA Cloud release 2008, new innovations powered by intelligent technologies help increase the efficiency of core business processes. In finance, additions to event-based revenue recognition help ensure support for selling projects assigned to sales order items. This can significantly reduce manual effort by providing real-time automatic revenue recognition, margin analysis, and clear audit trails for each posting, with a link to the reference document. Intercompany matching and reconciliation now leverages automated postings to help reduce manual effort and improve compliance. It streamlines the real-time reconciliation-to-elimination process and provides richer insights into detailed results.

IntelligentĚýsituationĚýautomationĚýfor the physical inventory process automatically checks whether a recount should be triggered or if inventory discrepancies are tolerated. This helps increase both employee efficiency and inventory accuracy and transparency while enabling real-time reporting of warehouse stock.

Looking Beyond the Pandemic

Crisis is widely believed to be a catalyst for change. Across the world, COVID-19 forced us to change our ways immediately and to an extent that was previously unimaginable. As both individuals and entire industries adapt to their new realities, there is an opportunity to reset rather than resume old ways. Although global carbon emissions shrank as the pandemic took hold, this has only a minuscule impact on the more existential challenge of climate change. We have to fundamentally change our ways forever.

In June, 51ˇçÁ÷announced the first solution in its Climate 21 program to support enterprises trying to make their operations better prepared for the emerging business reality where sustainability is a strategic and economic imperative. Delivering product-specific carbon footprints and providing capabilities to optimize the carbon footprint based on real-time insights in industries such as consumer products, chemicals, and oil and gas can be very complex, involving analysis of multiple production sites and production steps. In doing so, 51ˇçÁ÷helps businesses to optimize not only their top and bottom line, but also their green line, enabling them to prepare for a change driven by consumer incentive and choice.

The 2020s are heralded as the decade of change and transformation. Let 51ˇçÁ÷help you to rise to the challenge and make the right changes.

For more details on the release, see by Sven Denecken.

Oliver Betz is senior vice president and head of Product Management for 51ˇçÁ÷S/4HANA.

It started out as a spice mill during the industrial revolution and has been a leading supplier of natural ingredients for the food and beverage industry ever since. Its secret to survival? A technology-driven mindset.

Food and Beverage

Döhler’s worldwide customers produce a wide range of goods from alcoholic and non-alcoholic beverages to bakery and confectionery as well as dairy and plant-based products. With over 5,000 different raw materials and more than 20,000 product applications, such as flavors and colorings, the company has an incredibly complex supply chain. Not only does that mean high operating costs, it means high carbon emissions. According to climate change experts, supply chain emissions are often as a corporation’s direct emissions, leaving a significant footprint on the environment.

“Our goal is to take the complexity out of the supply chain for our customers and suppliers,” Pierre Wiese, head of Business Solutions Commercial at Döhler, says. “This involves a huge logistical effort, but we’re in this business for the long term, so we’re heavily focused on sustainability. We can only achieve our goals by being a digital leader. That’s how we can reduce carbon emissions and save on costs and resources.”

The company’s business model revolves around managing the supply chain in a sustainable manner. DĂśhler maintains close ties to its partners and suppliers. Farmers are deeply impactedĚý by climate change. Their plants and trees are sensitive to changes, such as water shortages caused by lack of rain. Drier seasons, for example, mean apples with less water content and less juice for concentrate.

Continuous Innovation

The company has decades of experience finding innovative solutions, such as replacing meat and dairy products with plant-based solutions like oat milk. It also produces natural ingredients that save on production costs and raw materials, such as natural fruit flavors and colors for food and beverages.

To remain innovative, the company is working closely with its technology vendor, SAP, to find better ways to manage the supply chain and reduce emissions. The journey to digitization began over two years ago and required a change in mindset as well.

“If we want to be a digital leader in the food and beverage industry, we need a clear vision on climate,” says Wiese. “Maintaining adequate food supplies for generations to come requires better data collection and analysis to find areas where we can improve. And we need the right software and tools.”

DĂśhler’s supply chain challenge is not an exception. Many companies have highly complex operating and supply chain structures, and their CO2 footprints are hard to evaluate. But DĂśhler’s solution is innovative; it is the first company to implement 51ˇçÁ÷Product Carbon Footprint Analytics, a new tool for tracing carbon emissions with 51ˇçÁ÷S/4HANA and 51ˇçÁ÷Analytics Cloud.

Back to the Roots

“The only way to reduce carbon emissions is to trace them to their roots,” Wiese explains.

51ˇçÁ÷Product Carbon Footprint Analytics provides insights into carbon usage by product, plant, or profit center and reveals production steps or raw materials causing high emissions.

This information is exactly what companies need to identify low-carbon opportunities, such as buying raw materials with a smaller footprint, replacing energy-inefficient machines with more modern ones, or purchasing green energy instead of a conventional electricity mix.

Such decisions are usually made by board executives and require tradeoffs on a commercial level. In the past, according to Wiese, the decision to replace antiquated machinery was based purely on cost calculations. At Döhler today, emissions are taken into consideration along with costs, and Döhler’s IT expert believes emissions will soon surpass traditional costs when it comes to making investment decisions.

Analyzing the carbon impact of production processes is a new step for many companies. It requires tight collaboration between departments that normally act independently from each other. For example, production data specialists on the shop floor need to work more closely with process experts on the business side, requiring new processes or responsibilities.

For the Long HaulĚý

For DĂśhler, sustainability is an opportunity to balance economical, ecological, and social issues in order to guarantee long-term, lasting success.ĚýFor the company, people, planet, and performance are equally important. Whether it’s protecting human rights within the supply chain, engaging in fair trade practices, or decreasing carbon emissions, the belief that sustainability goals can only be achieved through constant measurement and improvement is ingrained in the company DNA. That’s the role of technology. For a company with a global value chain reaching from the field to the supermarket shelf, digitization is the only way to ensure longevity.

“We’re on this journey together with our suppliers and customers,” Wiese explains. “We’re already innovating together to move away from a linear model to a more sustainable, circular one. Creating innovative food solutions and production processes now is how we’ll stay around for another few hundred years.”

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“I’m asking you and all of us to become resilient, sustainable, and profitable companies,” he said. “Together, as intelligent enterprises, we can turn the world’s biggest challenges into our greatest opportunities. The recent pandemic is a crisis that will drastically impact societies and business for months and probably years. Digital transformation is no longer an option, but a must.”

Klein brilliantly brought the intelligent enterprise to life, spotlighting SAP’s newly launched Climate 21 program for sustainable and profitable business, as well as the company’s . Joined by customers and experts during the virtual broadcast, Klein reaffirmed SAP’s commitment to customer success, as well as partnerships with customers like Porsche for business adaptability and growth.

SAPPHIRE NOW Reimagined is a digital program of livestreamed and on-demand broadcast channels featuring senior 51ˇçÁ÷executives, customers, solution demonstrations, and experts in 14 languages across regions worldwide.

Building a More Sustainable, Profitable Future

, Klein shared how companies using technology to adapt supply chains and automate for new digital business revenue streams were more competitive before the pandemic. They were also emerging more resilient after the crisis. Pointing out that increasingly companies were measured on both their financial performance and contribution to society, Klein saw business and society at a turning point.

“Just like we cannot ignore the pandemic… we cannot ignore climate change and the major contributions of enterprises,” he said. “Together, we can lead this change and become intelligent enterprises, to make sustainability profitable and profitability sustainable. With our new Climate 21 program, we will support all of our customers to become sustainable companies by building analytical and transactional capabilities [to track greenhouse gas emissions] into our core business applications. It is a huge step in taking climate action.”

51ˇçÁ÷as Trusted Partner

While Klein acknowledged that SAP’s more than 400,000 customers did not question the company’s ability to generate business outcomes, he said what they needed was a trusted partner to help in their digital transformation. He explained how the 51ˇçÁ÷solution portfolio reflected the intelligent enterprise vision, based on integration, innovation, agility, and speed. This included how the integrated connected end-to-end business processes — finance, human experience management (HXM), customer experience, spend management, and supply chain — for more informed decisions.

“No other company is more experienced than 51ˇçÁ÷to transform your business, because we have been doing this for almost 50 years,” he said. “Our product strategy has one goal: to be the innovative and trusted partner for your holistic business transformation.”

Klein showcased how the open with embedded analytics and real-time reporting was the technical foundation of the intelligent enterprise, allowing an ecosystem of partners and customers to integrate with 51ˇçÁ÷and non-51ˇçÁ÷applications and data across hybrid landscapes to extend and create innovative business applications.

Industry Cloud for Vertical Differentiation

Emphasizing the importance of partners, Klein explained how the industry cloud supported the development of cloud-native applications for differentiating business capabilities, powering the “fourth industrial revolution.”

“We will partner with our ecosystem to gain broad coverage across all industries… because you know which industry best practices matter most to you… Business processes and steps have many dependencies,” he said. “Only 51ˇçÁ÷can bring together all this data of the many stakeholders in one business network, allowing you to manage all these dependencies in real time.”

Partnership with Porsche Drives Results

While it might seem counterintuitive to hold up the automotive industry as an innovation leader during the pandemic, Lutz Meschke, CFO of Porsche, discussed how his company’s partnership with 51ˇçÁ÷was instrumental in helping both organizations usher in a new era of digitalization.

In Porsche’s case, the innovations included electric vehicles, automated driving, new services, and digital sales channels.

“The pandemic showed us insistently how important it was to act with a sustainably profitable strategy… and to work with a resilient supply chain,” Meschke shared. “We see a unique opportunity to become a completely digital company… We believe in strong partnerships, like our strategic partnership with SAP, driving forward co-innovations and jointly delivering new solutions for our digital transformation.”

Meschke said that Porsche is putting data at the “heart of everything” for decision-making backed by . Using and , Porsche will have one integrated reporting system across its application landscape.

Data Fuels Circular Economy

Meantime, Klein detailed SAP’s vision for the intelligent automotive company, taking viewers on a data-driven electric car buying and ownership experience from customized configuration through delivery and beyond. In this future, data provided an informative window into the customer’s entire driving experience, during a car’s lifetime and even after. Businesses could provide new services to customers, cities could increase road safety, and car manufacturers could make continuous improvements in a perfect rendition of the circular economy.

Amazing Intelligent Enterprise Journey

Klein closed his keynote with a heartfelt pledge of SAP’s commitment to its customers, and a resounding call to act.

“We want to serve you with the best possible business outcomes to help you quickly adopt and get the most value from our solutions to ensure your long-term success,” he said. “Together, we’ve embarked on the journey to become intelligence enterprises. We have come a long way already, making a significant contribution to growth while acting sustainably. Let’s show the world when people and technology meet, amazing things happen.”

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51ˇçÁ÷is helping companies improve supply chain and industry-specific processes, connect through the business network and embed sustainability as a critical measure of business success. The announcement was made at the conference, held online June 15–19, 2020.

“In uncertain times, companies need a trusted partner to help them make confident decisions to enhance agility and resiliency during and beyond the current COVID-19 crisis,” said Thomas Saueressig, member of the Executive Board of 51ˇçÁ÷SE for 51ˇçÁ÷Product Engineering. “In today’s hyperconnected world, it’s even more important for businesses to quickly react to environmental and market changes. We’re helping to address these challenges with new ways for customers to address sustainability, lead in their industry and grow their business networks. 51ˇçÁ÷has the strategy, expertise, solutions and partner ecosystem to enable customers to run their business as an intelligent enterprise.”

Climate 21

51ˇçÁ÷announced the Climate 21 program to support customers in pursuing their climate-related objectives. In a multiyear road map, 51ˇçÁ÷will work with co-innovation partners to embed sustainability metrics across SAP’s solution portfolio. This will help customers understand, analyze and optimize the carbon footprint of their products and operations along the value chain.

The 51ˇçÁ÷Product Carbon Footprint Analytics application is now available as the first solution in the Climate 21 program. The application uses data from 51ˇçÁ÷S/4HANA and third-party sources and calculates this information within the 51ˇçÁ÷Analytics Cloud solution. This helps customers understand their carbon footprint and provides a foundation for analyzing and optimizing greenhouse gas emissions.

To learn more, read “Our Decade of Delivery for Climate” by Saueressig. Also read “51ˇçÁ÷Launches Carbon Emissions Accounting System to Address Climate Change.”

Industry Cloud

Intelligent enterprises strike the balance between optimizing their current business models and innovating at the vertical edge to develop new revenue streams and growth potential using digital technologies. 51ˇçÁ÷and its partners are offering industry cloud solutions that extend the end-to-end processes of SAP’s intelligent suite to help drive customer’s core business in their industries.

SAP’s industry cloud strategy will deliver innovative, vertical solutions from 51ˇçÁ÷and its partners. These solutions will be built on technologies in the Business Technology Platform portfolio and use an open API framework, open process model, open domain model and common business services to create a better customer and user experience. The interoperability with SAP’s intelligent suite will enable rapid development, deployment and integration. Artificial intelligence, the Internet of Things and other advanced technologies from 51ˇçÁ÷will be available to help developers to accelerate development and deliver greater business value, enabling improved business practices and business innovation at the vertical edge.

To learn more, read “Innovation at the Vertical Edge: New Business Models for a Digital Economy” by Peter Maier, president, Industries and Customer Advisory, SAP.

51ˇçÁ÷Increases Investment for Industry 4.0 Across the Supply Chain

51ˇçÁ÷brings significant innovations across the supply chain from design to operations to deliver greater insights, automation and responsiveness with the Industry 4.Now initiative. These innovations can help companies design and manufacture intelligent products and assets that can capture and analyze the increased tide of information from sensors across the supply chain. This enables customers to move Industry 4.0 from a factory-focused initiative to a company-wide business strategy.

With Industry 4.Now, 51ˇçÁ÷will deliver innovations that companies need to create and capture a digital thread of these intelligent products and assets throughout their lifecycle to provide real-time insights back into the business processes, from design to operations. With embedded analytics and predictive capabilities, this intelligence can empower people to make better business decisions and drive new business models and revenue streams.

To learn more, read “Why the Time for Industry 4.0 Is Now” by Richard Howells, vice president, Solution Management for Digital Supply Chain, SAP.

51ˇçÁ÷Announces a Strategy for a Unified Business Network

51ˇçÁ÷announced a strategy to bring end-to-end visibility, increased efficiency and collaboration across the entire supply chain processes, including design, planning, sourcing, procurement, manufacturing, logistics and asset operations. By creating aĚýnetwork of intelligent enterprises,Ěý51ˇçÁ÷canĚýhelpĚýcompaniesĚýdigitalize multienterpriseĚýbusiness processesĚýfor better visibilityĚýand collaboration acrossĚýthe supply chain ecosystem.

This initiative spans across SAP, using insights from real-time ERP, advanced analytics and successful networks solutions such as Ariba Network, 51ˇçÁ÷Asset Intelligence Network, 51ˇçÁ÷Logistics Business Network and 51ˇçÁ÷Fieldglass solutions to deliver the collective intelligence through an open and interoperable business network. With more than US$3.3 trillion flowing through these business-to business powerhouses, 51ˇçÁ÷will help enable sustainable and resilient supply chains, transform business models and provide the agility to safeguard against global disruptions.

To learn more, read “Creating a Unified, Open and Intelligent Business Network” by Chris Haydon, president, 51ˇçÁ÷Procurement Solutions, and Paige Cox, senior vice president and head of Digital Supply Chain Networks, SAP.

Visit the 51ˇçÁ÷News Center. Follow 51ˇçÁ÷on Twitter at .

About SAP

As the Experience Company powered by the Intelligent Enterprise, 51ˇçÁ÷is the market leader in enterprise application software, helping companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an 51ˇçÁ÷system. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. 51ˇçÁ÷helps give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want – without disruption. Our end-to-end suite of applications and services enables more than 440,000 business and public customers to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, 51ˇçÁ÷helps the world run better and improve people’s lives. For more information, visit .

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COVID-19 has exposed the world’s vulnerability, but it also provides a shining example of how quickly countries can mobilize forces when faced with a global threat.

A triumvirate of forces — ecological, economic and societal — are currently encouraging leaders across many industries to take action to make their businesses more sustainable. Many leaders see a as an opportunity to forge a better world by reducing dependency on fossil fuels and stemming global warming. The World Economic Forum has even called on business leaders to “.”

Managing the “Green Line”

The shift toward sustainable business practices is being driven by governments, consumers, investors, and even employees. While most companies monitor and measure the CO₂ emissions of their production sites, customers are increasingly demanding visibility into the full carbon footprint of the individual products they purchase. Discerning consumers are inclined to choose companies that deliver transparency while shunning those they view as indifferent to the environment.

In the future, national and international regulations may even require such environmental impact information be provided on product labels.

Company leaders will therefore need to do much more than just manage their top and bottom lines to keep investors happy; they are increasingly being held accountable for the way they are managing their “green line” to reduce the carbon footprint across their business.

Introducing 51ˇçÁ÷Product Carbon Footprint Analytics

This week, 51ˇçÁ÷announced the first solution in its Climate 21 program to support enterprises trying to make their operations better prepared for the emerging business reality where sustainability is a strategic and economic imperative.

Delivering product-specific carbon footprints in industries such as consumer products, chemicals, and oil and gas can be very complex, involving analysis of multiple production sites and production steps. But no other enterprise software company is prepared to help enterprises tackle the challenge like SAP.

“Climate 21 is the embodiment of the intelligent enterprise because it spans the end-to-end business processes across both companies and industries,” Thomas Saueressig, member of the Executive Board of 51ˇçÁ÷SE for 51ˇçÁ÷Product Engineering, said as he addressed participants at SAPPHIRE NOW.

For nearly 50 years, companies of all sizes and from all industries have trusted 51ˇçÁ÷to help them manage their enterprise resources to drive revenue, reduce cost, optimize asset utilization, streamline supply chains, and improve customer service. Much of the base data needed to determine carbon footprints is already in 51ˇçÁ÷systems, such as bill of materials, energy usage, procurement data and master data. 51ˇçÁ÷is also used to managing the complexity that such projects demand.

“It is in our DNA to build software that helps companies measure, account, and take the right action in dynamic and heterogeneous regulatory environments,” Saueressig wrote.

But 51ˇçÁ÷solutions for carbon accounting are not an afterthought bolted onto existing software applications; they are integral to the company’s digital core. Accounting for CO₂ and other greenhouse gases is just an additional factor in an enterprise’s operations.

Carbon Emissions Accounted for Across the Entire Value Chain

51ˇçÁ÷Product Carbon Footprint Analytics delivers carbon emission insights for a company’s products by plant, profit center, or cost center. Based on 51ˇçÁ÷S/4HANA, 51ˇçÁ÷Analytics Cloud and 51ˇçÁ÷Cloud Platform, the application delivers transparency on the carbon emissions of a product across the entire value chain, including production, raw materials, energy use, and transport. Producers can also integrate data from product databases and third-party solutions to analyze and understand the emissions breakdowns.

If a specific product is made in more than one location place, for example, comparisons can be made for each activity of the value chain to determine the amount of CO₂ it takes to produce the product in each location. Transparency about the carbon footprint lays the foundation toĚýminimizeĚýcarbon emissions. Producers can use the data to run simulations to optimize the carbon footprint according to buyer requirements.

“Our goal is to create transparency about carbon emissions all the way through the value chain, across industries, geographies, products, and services,” said Toby Croucher, head of Solution Management for Climate 21 and Sustainability at SAP. “Creating transparency of the carbon footprint straight through to the consumer will help inform climate-responsible buying and consumption.”

Transparency about the product carbon footprint for any good or service can also be passed down the value chain to consumers, enabling buying decisions to be based not only on quality or cost. For example, would be able to view the carbon footprint of the rims from Belgium, the titanium frame from Taiwan, the hub gears from the U.S., and tires from Germany, as well as the total carbon footprint of the bicycle delivered to the local bike store.

Co-Innovation Projects Lead the Way to Carbon Transparency and Climate Action

In addition to taking , 51ˇçÁ÷is running numerous co-innovation projects with companies that are sustainability champions in their industries and understand the business value of taking the next step in managing their environmental impact.

Doehler is a global producer, marketer, and provider of technology-driven natural ingredients, ingredient systems, and integrated solutions for the food and beverage industry. Last month, it became the first company to go live with 51ˇçÁ÷Product Carbon Footprint Analytics.

Watch this space for more examples of companies that are acting today to responsibly manage their green line.

I’ve said it before, but it can’t be said too often: We cannot continue to live and work as we are doing today. To truly accelerate the pace of change that is needed to make an immediate and positive impact on a sustainable path, we must partner on all levels and across organizations, industries, and regions. We need tangible action now.

There are several positive aspects to consider. The energy technologies that the world needs to cope with the environmental challenges are widely available in the developed countries, and their costs continue to fall. These include producing renewable wind and solar power, biofuels, and potentially carbon capture and storage and hydrogen power.

Local governments incentivize technologies that use natural resources wisely or have programs in place to encourage organizations to change their behavior through emissions trading schemes or carbon taxes. In addition, there are many non-governmental organizations (NGOs) that continue to push for a change in our mindset. Like other companies, 51ˇçÁ÷engages in many of these initiatives because we are in the unique position to take a role as an orchestrator in enterprise networks. 51ˇçÁ÷joined the World Economic Forum’s Global Plastic Action Partnership community, which provides tools, solutions, and insights for organizations to eliminate or at least reduce waste by 2030. We are also a member of the Ellen MacArthur Foundation to help companies enhance their resource productivity and realize a circular economy. These initiatives and partnerships are crucial as one company or organization alone cannot address these global challenges.

When it comes to climate change, we have a convenient measurable performance unit in the form of CO₂ to drive and track performance at a global, national, and industrial levels. It is encouraging to see that we have the technologies to act, the support from local and global authorities, and a unit of measurement to know how we are doing. However, the central challenge is that we all need to move faster, together. We must move faster and at much greater scale than any industrial transition in the history of civilization in order to stop global warming and other environmental degradation and pollution, which already has a measurable impact across ecosystems as diverse as the Arctic, rain forests, and oceans.

I strongly believe that technology is an enabler, but people make it happen. To go faster, I see two essential levers, both of which 51ˇçÁ÷can play a pivotal role in supporting.

The first, and hopefully a very powerful lever, is an economic incentive for companies. Together with our customers, we can accelerate action through the financial instrument of carbon pricing. With the that there are currently more than 50 carbon pricing schemes being implemented or scheduled, this is a new business reality for the 2020s. Carbon pricing is complex. While governments and regulators are responsible for setting carbon pricing, it is in our DNA to build software that helps companies measure, account, and take the right action in dynamic and heterogeneous regulatory environments.

The second lever is choice both for consumers and companies. We are inevitably going to see more CO₂ labeling for goods and services in society, creating more transparency and, consequently, awareness. Consumers will demand more transparency into the CO₂ footprint associated with products and services they consume in the future – in the same way that we have had more visibility in recent years into calorie content of the food we consume. This will be true for both individual consumer choice, as well as companies buying through their supply chains. I also believe that there will be a mindset shift resulting in a willingness to pay a premium for the low or lowest carbon alternative. This is already a reality in some markets for renewable energy. Preferential low carbon purchasing behavior will shape markets and company strategies. Carbon pricing will help effectively allocate capital to the most cost-effective options to de-carbonize, and the choice of customers will define who not only survives but thrives in a carbon constrained and sustainable business world. Every organization and every individual needs to move into the same direction.

51ˇçÁ÷provides a starting point to help companies preparing for a change driven by incentive and choice, with the Climate 21 initiative in 2020. I couldn’t be happier to announce 51ˇçÁ÷Product Carbon Footprint Analytics, the first solution available to the market. Our customer Doehler is the first to go live.

Embedding an enterprise-wide approach to CO₂ will help businesses gain transparency and awareness, provide an economic incentive to companies to act now, and can be a starting point for action at scale. Adding a for measuring a company’s performance symbolizes our ability to change for the better of our global community. It is a decade of delivery, and 51ˇçÁ÷is ready to support.

Thomas Saueressig is a member of the Executive Board of 51ˇçÁ÷SE for 51ˇçÁ÷Product Engineering.

The question is no longer if but how fast and how large the .

While experts, activists, and politicians debate the correct response, it is clear that , , and will not be nearly enough to bend the global warming curve.

The current COVID-19 pandemic could mark a turning point in progress on climate change; the has been advanced as a silver lining of the crisis. Estimates by the United Nations (UN) show that emissions must fall by 7.6 percent every year until 2030 to keep temperature increases to less than 1.5°C.

As companies emerge from the crisis, they have to expect that they will be faced with legislation that stipulates a sustainable recovery through tighter CO₂ regulation. This would significantly impact operating costs. The largest carbon producers will feel the push for climate action beginning in highly developed markets, followed successfully by others.

A challenge to corporate reputation is another risk not to be underestimated, as companies are increasingly and the public whether their businesses and products are contributing to the solution or to the problem.

Make the World Run Greener

A few months ago, Thomas Saueressig, member of the Executive Board of 51ˇçÁ÷SE leading Product Engineering, launched an initiative to understand how 51ˇçÁ÷S/4HANA and other 51ˇçÁ÷applications could help customers manage their carbon footprints.

The initiative resulted in Climate 21, a program that reaches well beyond the corporate practices of emissions reporting to data about product-related greenhouse gases and other sustainability issues that help businesses and consumers make more responsible buying decisions.

In January, top management made the company’s first statement to the market on Climate 21 at the World Economic Forum.

Manage the “Green Line”

Saueressig’s vision for the company’s enterprise resource planning (ERP) products is to add sustainability as the third dimension to driving business success: the “green line,” as he calls it.

“51ˇçÁ÷helps customers manage the top line and bottom line of their business, and we run the supply chains and value chains of the largest companies in the world,” Saueressig said. “So we are in the best position to now help companies manage their green line by minimizing the carbon footprint and negative environmental impact of their product. I believe this will help make us the leader of the next-generation ERP market.”

Not Just About CO₂

Since 1972, 51ˇçÁ÷has helped businesses to manage their enterprise resources to drive revenue, reduce cost, optimize asset utilization, streamline supply chains, and improve customer service. From this point of view, minimizing CO₂ and other greenhouse gases is just an additional factor in an enterprise’s target function.

“On the way to a more sustainable future, 51ˇçÁ÷has a critical role to play in helping companies understand, monitor, and optimize their CO₂ transactions — up and down their supply chains as well as in their asset base,” said Toby Croucher, head of Solution Management for Climate 21 and Sustainability at SAP.

Green Line Benefits for Companies and Consumers

The Climate 21 program team is planning a phased approach to crafting the solutions that companies can use to manage their green line. This starts with understanding the composition of the CO₂ footprint that products accumulate over the entire value chain and looking at product design, operations, and supply chains.

The idea is to share the CO₂ product footprint with business customers and consumers to enable them to make climate-friendly buying decisions. Customers that know the CO₂ rating of each product they buy and each service they use are empowered to choose products with the smallest climate impact.

But can citizens really make a difference? Studies say yes. In the U.S., about ; reducing this footprint by only five percent would make a substantial difference. Such buying decisions would influence supply chains and reward businesses that make products and services with a smaller CO₂ footprint.

51ˇçÁ÷is busy preparing to introduce the first analytical solution. Co-innovation with leading customers across all industries in well underway and has set the company on a path to a sustainability-enabled ERP that helps companies balance top line, bottom line, and green line for the 21st century.