As leaders, it is our responsibility to drive change and create a positive impact. We can help create a more harmonious relationship between humanity and our planet by embracing sustainability, fostering innovation and collaboration, and advocating for policy change.

I’ve heard CEO Steven Tebbe’s warning loud and clear: he states that persistent overshoot leads to more prominent symptoms, including unusual heat waves, forest fires, droughts, and floods. This, in turn, increases the risk of compromising food production. His conclusion: it is in the interest of cities, countries, and business entities to foster their own resource security if they want to prosper – to the benefit of the Earth as well.

It’s encouraging to see how organizations across the globe collaborate for a sustainable future that will help us #MoveTheDate. According to the , 5,500 companies are taking actions to reduce emissions. More than 2,100 companies out of those have made net-zero commitments. Businesses have realized that it is important to incorporate sustainability in their business strategies to mitigate the evolving investor pressure, consumer demand, and regulatory constraints. As the rightly pointed out, more rapid and far-reaching transitions across all sectors and systems are necessary to achieve deep and sustained emissions reductions and secure a livable and sustainable future for all.

But how can we make this happen? Actually, there are several levers that might significantly move Earth Overshoot Day closer to year’s end – and companies like 51·çÁ÷can contribute to them.

Reducing the carbon component of humanity’s ecological footprint by 50% would move Earth Overshoot Day by 93 days, or more than three months.*

The change with the biggest impact as identified by the Global Footprint Network is carbon reduction. 51·çÁ÷has continuously expanded its since 2009. It became the first German company to work with science-based emissions reduction targets in 2017. Two years later, 51·çÁ÷was one of the first seven global companies to have 1.5°C-aligned reduction targets for 2050. We accelerated this timeline last year by committing to becoming a net-zero emissions enterprise by 2030, 20 years earlier than the original target.

While walking the talk is key, providing digital solutions and services to help every business run as an intelligent and sustainable enterprise is how we can scale these efforts. We can support thousands of customers in managing their carbon footprint, reducing material waste, and becoming socially responsible businesses.​ For example, helps businesses gain material sourcing transparency and environmental, social, and governance (ESG) data across their supply chains. This includes the material input scope 3 carbon footprint as it moves from supplier to supplier. SAP’s new green ledger initiative helps companies track their carbon accounting with more precision and control by using actual data across their business operations and supply chains instead of estimates.

Increasing global, low-carbon electricity sources from 39% to 75% would move the date by 26 days.*

At SAP, we have been using 100% renewable energy to power all our data centers and offices since 2014. It enables us to offer customers carbon-neutral cloud software solutions that help them reduce their overall carbon emissions.

In alignment with our commitment to the RE100 initiative, we use two strategic levers. Firstly, we invest in high-quality, EKOenergy-certified EACs to foster renewable energy generation. Secondly, we produce renewable electricity at selected 51·çÁ÷locations. One example is the 51·çÁ÷Labs India location in Bengaluru. It runs on the power generated from the on-site solar power grid along with Power over Ethernet (PoE) lighting systems. To innovate and scale businesses in support of the clean energy transition, we work with energy customers such as , , and .

Reducing the footprint from driving by 50% around the world and replacing one-third of car miles by public transportation and the rest by biking and walking would move the date by 13 days.*

According to , 20% of the world’s carbon emissions are from transportation. To help reduce this, we track our impact in the global 51·çÁ÷commuting survey. According to the survey, average CO2e emissions per employee per day dropped by 70% from 4.38kg in 2018 to 1.30kg in 2022 due to working from home and emission-free commuting.

51·çÁ÷also stated that from 2025, all new company cars will be emission-free in operation. In support of this transition, we are enhancing the charging infrastructure at our facilities and intend to leverage 51·çÁ÷E-Mobility, a standardized, cloud-based solution. It can provide a complete package that enables charge point operators to run their business efficiently and profitably.

These are just three examples that would move Earth Overshoot Day closer to New Year’s Eve – the day when human consumption and Earth’s regenerative capacity would be in balance. But we are not there yet. Today, Earth Overshoot Day serves as a poignant reminder that despite the strides made, our efforts are not yet enough to mitigate the growing ecological crisis. We have witnessed positive shifts in attitudes and actions towards sustainability, but the urgency of the moment demands that we intensify our commitments and actions.

It is time to rethink, recalibrate, and redesign our way of living and doing business in alignment with the planetary boundaries. The responsibility to protect and nurture our planet does not rest solely on the shoulders of policymakers or industry leaders; it rests on each of us. Let us collaborate towards a more balanced relationship with our planet and a sustainable future that safeguards Earth’s resources.

Daniel Schmid is chief sustainability officer at SAP.
*Source:

While these are encouraging signs from a sustainability perspective, the primary step these companies must take to act on these commitments is to record and report on their carbon footprints, directly attributable to their operations and upstream and downstream supply chains. Understanding Scope 1, 2, and 3 carbon footprints with increased confidence helps take action to prioritize decarbonization initiatives and report improvements. This improves regulatory compliance and signals to customers and other stakeholders that companies are authentically walking the talk.

The European Union’s (CBAM) imposes a carbon tax on importers to prevent carbon leakage and support the decarbonization of the EU industry. Companies that are importing products must buy carbon certificates equivalent to the carbon price they would have paid if these products were otherwise produced in compliance with EU carbon pricing rules. Importers will thus be required to determine each product’s total carbon dioxide emissions to calculate the equivalent carbon certificates they need to purchase or to choose the right supplier to meet their sustainable goals.

Companies are on the quest to track carbon emissions in various categories such as purchased goods and services, upstream and downstream transportation and distribution, use of sold products, processing of sold products, and end-of-life treatment of sold products. Tracking and accounting for emissions in some of these categories are complex.

, a cloud-native solution built on , enables enterprises to calculate and analyze their carbon footprint, using master data from their existing enterprise resource planning (ERP) system, product, value chain, and at a corporate level following the Greenhouse Gas Protocol’s Scope 1, 2, and 3 emissions. The solution helps companies meet their sustainability commitments by working to improve the speed, accuracy, and efficiency of emissions calculations and management. It can also integrate with 51·çÁ÷S/4HANA, connect an ERP system via public APIs available in 51·çÁ÷Business Accelerator Hub, and import data from an external source by uploading a file. The calculated footprints can be embedded into 51·çÁ÷S/4HANA to extend end-to-end business processes with sustainability data.

Most companies currently use estimated data to calculate their carbon emissions. 51·çÁ÷Sustainability Footprint Management provides a holistic assessment of emissions by using a hybrid approach where average or secondary emission data from life cycle assessment (LCA) databases and actual or primary data from suppliers and verified business data are combined and managed in an integrated environment while allowing for greater actual data input over time. This helps companies to track and manage product-specific emissions and choose product- and value chain-specific elements.

While Scope 1 and 2 emissions are traceable, transparency around Scope 3 emissions presents a difficult challenge for companies. For many companies, Scope 3 emissions account for 90% of overall emissions. In addition to Scope 1 and 2 emissions, 51·çÁ÷Sustainability Footprint Management can also measure Scope 3 emissions from purchased materials as well as upstream and downstream transport. 51·çÁ÷aims to enhance the solution to count all 15 Scope 3 emissions in the coming releases. Analyzing the carbon footprints of purchased materials and goods helps identify and prioritize sustainable suppliers, and companies can also explore alternative materials to reduce carbon emissions.

, one of the largest steel producers in Europe, signed a Memorandum of Understanding (MoU) with the Volkswagen group to start production of low carbon dioxide steel from the end of 2025. Salzgitter AG is using to assess CO2 footprints in the new production process.

Fifty years ago, 51·çÁ÷revolutionized financial accounting with ERP software. Today, 51·çÁ÷is reinventing the “R” in ERP by extending the definition of resources beyond financial and goods flows, offering a precision approach to sustainability by enabling transactional carbon accounting through a green ledger. This enables combined financial and environmental decision-making at different points across the business process. The green ledger offers deep insights by being embedded into RISE with 51·çÁ÷S/4HANA Cloud and the GROW with 51·çÁ÷solution, with additional capabilities added with every release.

Climate change is a collective problem that requires collective efforts. While 51·çÁ÷is committed to achieving net zero along our value chain by 2030, 51·çÁ÷is also enabling businesses with the data visibility and analytic insights needed to act on decarbonization initiatives across value chains. Together, we can enable a future with zero emissions.

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However, carbon accounting is still done mainly using spreadsheets and semi-automated tools that use estimates and averages for carbon footprints. Only 9% of companies have a comprehensive view of their greenhouse gas emissions and their impact across the entire value chain.

This is no longer enough. We need to account for carbon with much more precision and control by using actual data values across our business operations and supply chains in sync with financial flows. We need to redefine “resource” in enterprise resource planning (ERP) and extend our understanding of resources beyond financials. 51·çÁ÷now brings a precision-approach to do just that by enabling transactional accounting for carbon.

Introducing Future-Proof Solutions for Transactional Carbon Accounting

SAP’s approach to transactional carbon accounting comprises three future-proof capabilities.

First is , a single solution to calculate and manage carbon flows with high granularity on company, process, and product levels across Scope 1, 2, and 3 emissions. The solution integrates capabilities from previously released 51·çÁ÷solutions and adds new functionalities, such as the ability to manage a greater scope of emissions sources and support for a broader range of industry-specific requirements. Using 51·çÁ÷Sustainability Footprint Management helps provide a seamless integration with 51·çÁ÷S/4HANA, allowing for a strong data foundation to calculate footprints directly from individual transactions at each step of production. Companies can reduce their climate risk and make progress towards their climate commitments by better adhering to and reporting on rapidly changing standards. They can also achieve operational excellence by dramatically improving the speed, accuracy, and efficiency of emissions calculations and management. 51·çÁ÷Sustainability Footprint Management will be available from June 2023.

Second, 51·çÁ÷offers , a new application designed to securely exchange standardized sustainability data, including product footprints, along the value chain. The application allows precision accuracy by gathering actual carbon data directly from suppliers. 51·çÁ÷Sustainability Data Exchange, part of , uses the carbon data interoperability standards established by the , hosted by the World Business Council for Sustainable Development (WBCSD). The beta version is available and will be generally available in Q3 2023.

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Third, 51·çÁ÷also introduces the green ledger concept, which combines financial and environmental data to enable deep insights and effective decision-making at different points across the business process. Green ledger will be embedded into and for and will deliver new capabilities with each release. The next major update, for example, offers a new way to embed carbon data, starting with most impactful scope categories, into product-level costing.

Using these three powerful capabilities that , executives can have a future-proof tool kit to help manage and reduce their carbon footprints. The 51·çÁ÷solutions record data based on actuals instead of averages to increase data transparency, accuracy, and reliability. The high-quality carbon data, like the financial data, is auditable, transparent, and reliable. To take climate action, companies sync the emissions data with financial data to make granular, accurate, and right-time decisions that are both financially and environmentally sound.

Acting on Carbon Emissions Data

SAP’s carbon accounting solutions allow business decision-makers to not only see emissions on an operations level, but also at the product level by including carbon footprints alongside financial data to make trade-offs between cost efficiency and carbon intensity. To make these assessments, carbon footprints need to be available at a granular level and at the point where the business decision is made.

In the automotive industry, for example, the sources of steel, rubber, batteries, and electrical components are key elements of the carbon footprint of an electric car manufacturer’s product. 51·çÁ÷solutions provide the foundational data for these purchased materials and components, as well as consumed energy and other inputs, and combine it with additional data sources such as life cycle assessment databases.

Using the input data, the footprint is calculated by matching source data with emission factors. Like in financial accounting, the inflows and outflows of materials, components, and products are traced and accounted for with a high level of transparency and auditability.

This isn’t accounting for accounting’s sake. This level of data transparency helps teams across the business, from the C-suite to supply chain management to marketing, take sustainability action. They can make decisions together on both cost and carbon emissions that are rarely made in parallel today. Based on both cost and carbon values, the car manufacturer can scenario plan and make fully informed decisions about how to drive optimal financial and sustainability performance.

Bringing a Holistic View to Sustainable Business

To truly run sustainably and decarbonize business at the speed and scale needed, companies must . By embedding sustainability data into their core business processes through their ERP, executives can achieve a holistic, enterprise-wide performance capability.

Based on the ERP backbone, sustainable business data is the foundation for setting regulatory-compliant KPIs and disclosing sustainability progress to a broad range of reporting frameworks using . This holistic view is vital to understanding where emissions are occurring, setting accurate net-zero targets, and identifying specific areas to take action for maximum decarbonization impact. The are cloud-based, modular, and integrate with 51·çÁ÷S/4HANA Cloud.

Peter Bakker, CEO of WBCSD, said accountants will save the world. He very well may be right. With over 50 years of experience in financial accounting, future-proof technology, and wide access to customer and partner ecosystems, 51·çÁ÷is well-positioned deliver high-quality emissions accounting to rapidly scale business decarbonization.

Sebastian Steinhaeuser is chief strategy officer at SAP.

A decade ago, when electric vehicles were still a buzzword in the market, 51·çÁ÷Labs India launched a Green Car policy. Launched in 2011, the policy offered a subsidy for employees purchasing electric vehicles. Employees were provided charging stations across the Bengaluru campus along with convenient parking spaces.

In 2014, 51·çÁ÷Labs India took the first major step in implementing the use of EVs by transitioning to electric-powered cabs for employees working in shifts. In 2022, 95% of the fleet used for employees working on shifts were electric vehicles. Approximately 4,000 employees use the shift shuttle services every month. “The goal is to transition to a 95% green commute by the end of 2023. This includes using both electric vehicles and vehicles running on compressed natural gas (CNG) for all modes of transport provided across all lines of businesses in all 51·çÁ÷Labs India entities,” said Sudhakar Reddy, head of Intelligent Operations at 51·çÁ÷Labs India.

Today, the 51·çÁ÷Labs India Bengaluru campus houses 65 EV charging stations. In addition to powering the in-house cabs, these slow, medium, and fast chargers also encourage employees to make responsible choices and thereby help create a cleaner environment. 51·çÁ÷Labs India also purchased a new self-driving electric vehicle with official sustainability branding for all internal cab services, including cabs for guests and expats.

In addition to the above initiatives, 51·çÁ÷Labs India has partnered with , a micro-mobility solution that provides sustainable first- and last-mile connectivity for 51·çÁ÷employees who rely on public transportation. , a leading Indian electric vehicle manufacturer and 51·çÁ÷customer, provides additional discounts to employees of 51·çÁ÷Labs India. 51·çÁ÷Labs India worked with Ather Energy on a three-day drive at the Bengaluru campus where employees got first-hand experience test driving electric scooters. The initiative aimed to spread awareness among 51·çÁ÷employees about the use of electric vehicles. Ather will be conducting this drive across other 51·çÁ÷Labs India campuses as well.

In February, the Chancellor of Germany Olaf Scholz visited the 51·çÁ÷Labs India Bengaluru campus. During the visit, the chancellor experienced demonstrations across various fields such as digitalization, sustainability, digital supply chain, and e-mobility. An engaging, live, end-to-end demo of the solution was also presented to the delegates.

51·çÁ÷E-Mobility can enable companies and governments to manage charging infrastructure networks to drive the transition to sustainable electric mobility. Srinivasa Raghavachar, senior director and head of Automotive Industry Cloud Product Management at 51·çÁ÷Labs India, said, “We firmly believe that our solution plays a vital role in decarbonizing the transport sector and creating a cleaner and more sustainable future for everyone.”

The electric vehicle revolution will have an overall positive influence on our society. Embracing this revolution will not only help us mitigate the current environmental crisis but will also stimulate future-focused technological innovations.

“Organizations are struggling to forecast energy costs in a volatile market and understand the impact of new trends such as e-mobility on operations and finance,” said Catherine Garcera, global head of Sustainability, Services Industry at SAP. “They need resilience against the current energy crisis and the ability to grow and generate profits while meeting corporate sustainability goals.”

Step 1: Power Up Energy Savings with Digital Twins

Lowering energy consumption and operating costs begins with a thorough understanding of an organization’s energy data. Leading-edge companies are using digital twins to capture and analyze real-time energy usage data including electricity, natural gas, and renewables. That’s the purpose behind Flexinergy, an energy management software platform developed by , an 51·çÁ÷partner. The platform creates a digital version of an organization’s energy contracts and usage, allowing the customer to pre-calculate the bill. Information can include distribution costs across subsidiaries, taxes, size and location of facilities, occupancy rates, external temperatures, and more. This helps customers catch invoice mistakes, evaluate energy efficiency, and reduce consumption.

“It’s not unusual to find discrepancies between what the bill should be and the provider’s actual invoice,” said Erwin Guizouarn, CEO and founder of Evolution Energie. “Customers also use our software to better forecast energy costs in case of price fluctuations, new contracts, or supply chain disruptions.”

Guizouarn said that customers can be overcharged up to 5% on an annual basis due to billing errors. As for cost reductions, one large airport saved 17% in energy consumption.

Real-time data became particularly important for organizations during the recent energy crisis. Guizouarn said that customers can explore what-if scenarios, factoring in changeable energy prices and other parameters like lower carbon emission fuels, revised contract terms, or hedging to lower risk in case of energy price fluctuations. Ongoing alerts notify decision-makers of deviations to the plan, say if energy prices climb higher than expected, helping companies adjust strategies as needed.

Evolution Energie first began working with 51·çÁ÷through its participation in the Green Tech and Sustainability cohort of , the company’s global B2B accelerator. With shared business-to-business target markets, both companies are proving the incredible power of connected data.

“Merging energy-related data with financial information from your system and environmental, social, and governance (ESG) information from , you can see the impact on profitability and emissions objectives,” said Garcera. “You can adjust operations by day, week, or even season to gain efficiencies that could increase profits while meeting sustainability commitments.”

Step 2: Transition to Green Energy

Moving to green energy is another step that energy-intensive companies can take to achieve ambitious decarbonization targets. Some customers are increasingly focused on purchasing renewable energy, as well as producing green energy and investing in green assets. Here, too, a digital twin can help companies capture energy usage and resultant costs while tracking CO2 emissions from electricity, biomass, hydrogen, and other renewable sources.

“You can balance your green energy strategies against the cost of new contracts and greenhouse gas emission targets,” said Garcera. “In addition, companies need to ensure the provenance of the green energy they consume for accurate reporting against corporate sustainability objectives, supporting the brand’s image and building trust with customers and investors.”

Step 3: Realistically Explore New Energy Trends

While the vision is to consume as much green energy as possible, organizations are tempering sustainable business plans with reality. Some industries like aviation aren’t ready for full decarbonization; there’s limited availability of sustainable aviation fuel and it will take significant efforts to revamp complex infrastructure. In any case, organizations require energy strategies that combine finance, risk management, and sustainability.

“Fast-moving energy prices on top of changing sustainability regulations mean that companies have to continually monitor costs to find more efficiencies, and prove compliance with corporate commitments and industry regulations,” said Garcera. “The more you can accurately anticipate disruptions, the better you can make decisions to adapt for business resilience.”

Green Market Revolution Fueled by Informed Data

Connected data is foundational to managing energy consumption and costs. analysts predicted that by 2025, 75% of large cities and communities will form industry ecosystems with IT, architectural, engineering, and real estate firms to share data, applications, and expertise to address ESG issues. With zero-emission mandates moving apace, researchers advised organizations to continuously follow the price and performance and capability improvements in renewable energy systems and also “work with supply chain partners to improve procurement efficiencies.” As unpredictable as the next crisis may be, organizations can stay grounded with accurate data to build a resilient future.

Susan Galer is a communications director at SAP. Follow me @smgaler.

In 2020, the EU identified green hydrogen as a cornerstone of a climate-neutral energy system to be in place by 2050. At that time, hydrogen accounted for consumption and was primarily used to produce chemical products, such as plastics and fertilizers. Ninety-six percent of this hydrogen was produced with natural gas, resulting in significant amounts of CO2 emissions.

The other aspect driving this strategy is the need to reduce the dependency on imported fossil fuels. Diversification and access to new forms of renewable energy such as hydrogen will make the region more resilient.

The European Commission resolved to produce 10 million tons of renewable hydrogen and import 10 million tons by 2030. While green energy can be produced anywhere, countries with high availability of solar and wind energy such as Brazil offer more favorable conditions for efficient and affordable production. With its hydroelectric plants and policies favoring renewable energy as a substitute for fossil fuels, Brazil is a promising candidate for strategic green fuel trade partnerships with Europe.

However, Brazilian companies trading green hydrogen nationally and exporting it to regions such as the European Union must provide transparent proof of origin based on certification schemes.

The Public-Private Partnership between 51·çÁ÷and GIZ

In order to validate the general requirements and develop concepts for a software to support the green hydrogen certification for Brazil and Germany, 51·çÁ÷has formed a public-private partnership with the (GIZ). To help Brazilian suppliers prove their hydrogen is truly green, the project will evaluate and summarize certification rules and test digital solutions as well.

“This cooperation aims to promote sustainable hydrogen projects in developing and emerging countries,” said Sabine Bendiek, chief people and operating officer and member of the Executive Board at 51·çÁ÷SE, after signing a Letter of Intent (LoI) outlining the understanding between all parties. The LoI was later countersigned by GIZ Brazil at a delegation ceremony attended by the German Federal Minister for Economic Affairs and Climate Action, Robert Habeck.

“One of SAP’s first collaborative aspirations with GIZ is to develop a pilot project to digitize the hydrogen certification processes for Brazilian companies. We’re excited to work with GIZ on this project, which will eventually allow certification data to be exchanged and evaluated along the value chain in a tamperproof, cost-efficient, and traceable manner,” said Bendiek.

The GreenToken by 51·çÁ÷solution, for example, can provide supply chain transparency right back to the origin of any material using a blockchain based chain of custody for trust based on recognized standards such as ISCC PLUS, ISCC EU, and REDcert2. This unique digital twin on a blockchain approach can provide transparency into ESG (environmental, social, and governance) facts such as commodity origin, child labor, and recycled and/or sustainability status across company borders.

Building the Green Hydrogen Economy

“Brazil has the ideal conditions to become a global player in this area, including the infrastructure needed to create a relevant domestic market and become a major exporter of green hydrogen. This makes Brazil an excellent partner for countries like Germany that intend to import green hydrogen,” said Dr. Markus Francke, GIZ vice country director in Brazil. “As Brazilian hydrogen companies are looking to sell their products in domestic, European, and other markets, this project will help prepare them for the requirements of region-specific certification processes.”

Funded by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), the results of the partnership are expected to benefit small and medium enterprises as well as large companies in Brazil.

While decarbonizing the economy, the development of a green hydrogen industry in parallel can boost economic growth and resilience, creating local jobs in countries that produce green hydrogen such as Brazil. The new partnership between 51·çÁ÷and GIZ will contribute significantly to developing the hydrogen economy in Brazil by creating the necessary proof points through reliable certification for Brazil, Germany, and – and through its compliance to European directives – the European Union Member States.

As the effects of global warming become ever more apparent, companies are stepping up their efforts to cut carbon emissions and embrace sustainability. But from Tata Consultancy Services (TCS) and Microsoft Cloud published this week confirms that many companies are still struggling to measure the true value of their sustainability and decarbonization efforts.

SAP’s Take

The study, based on data from 400 public companies with combined revenues of $10 trillion, found that a majority of these companies struggled to validate the emissions data and insights from their supply chain partners, so-called Scope 3 emissions.

“When you need to track Scope 2 and  Scope 3 emissions, you are talking about getting information from across all tiers of your business network,” said Richard Howells, a supply chain and sustainability expert at SAP. That includes data from suppliers, contract manufacturers, logistics service providers and other trading partners.

“How do you meet sustainability initiatives if you don’t know where emissions and waste are in your supply chain, or where slave labor and inequality is occurring across your business network? If you can’t track it, you can’t measure, manage and minimize it!”

51·çÁ÷has made providing tools for customers that help them track, analyze and manage emissions across their entire business chains one of its top priorities. “Sustainability is top of mind in most companies, driven by pressures from all directions,” said Howells. “We as consumers are constantly looking for sustainable products that are ethically sourced, manufactured and delivered with minimal or zero emissions.”

Howells adds that investors are also looking at a companies’ sustainability index before they pull the trigger on the “buy order.”

“Employees want to work for sustainable companies and do their research before accepting a new job,” he said. “And of course, regulatory bodies are driving new rules and regulations such as the Plastic Tax laws that have come into place in the UK and, most recently, Spain.”

New regulations are putting additional pressure on companies to substantiate and justify their sustainability claims and counter green washing claims. As Howells noted, companies’ supply chains sit right in the middle of the sustainability challenge — both as major contributors to the problem but also as key elements of the solution.

Contact:
Ilaina Jonas, Senior Director of Global Public Relations, SAP
+1 (646) 923-2834, ilaina.jonas@sap.com