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鈥檚 transition team has already launched their , which carries the same name as SAP鈥檚 Climate21 initiative to help companies become sustainable businesses.

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There are number of drivers 鈥� ecological, economic, and societal 鈥� 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.

鈥淪ustainable 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,鈥� 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.

鈥淚t is about establishing long-term value in a carbon-constrained world,鈥� 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鈥檚 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, 51风流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. 51风流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.

鈥淚n the future there will be no difference made between cost, revenue, and GHG performance,鈥� says Bettina Zedlitz, solution manager for Climate 21 and Sustainability at SAP. 鈥淲e 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.鈥�

51风流Product Carbon Footprint Analytics is part of SAP鈥檚 Climate 21 program. .

鈥淢y role empowers me to make things happen,鈥� 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 51风流system in some way, it is clear that 51风流software has a huge influence on the global economy. With that power comes responsibility.

鈥淲e need to have ambitious goals, because the challenges we face are immense,鈥� Gilg says. 鈥淭here is a huge demand to rethink how we live and work. We must become sustainable to survive.鈥�

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

Software Solves Problems听

that digital transformation is not the latest industry catchphrase. It is a movement, a significant shift in how companies operate, compete, and grow.听 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 鈥� 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鈥檚 unique advantages. First, 51风流software is essential for all enterprise functions, from manufacturing, shipping, and delivering products to managing finances and human resources. Second, 51风流understands that the world works through networks. Networks provide visibility into trading, ethical business practices, logistics, and inventories. 51风流already owns the largest B2B procurement network with . 51风流has also invested in the and 51风流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鈥檚 flagship product, 51风流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.

鈥淲e decided to add a green line,鈥� Gilg explains. 鈥淎dding 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.鈥�

This philosophy all comes together in the Climate 21 initiative.听 Embedding sustainability as a new dimension of success into analytical and transactional applications allows ERP and intelligent enterprise systems from 51风流to optimize the resources not only of an individual enterprise but across value chains 鈥� 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).

鈥淲e鈥檝e reached the end of the linear economy,鈥� says Gilg. 鈥淲e鈥檙e 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.鈥�

Decade of Delivery听

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鈥檚 stocks. The , yet once again the to stop the destruction of nature according to a recent .

Gilg sees a tremendous opportunity for SAP: 鈥淭he 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.鈥�

To make it easier for enterprises to do that, 51风流developed the 51风流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 51风流software for environmental and commercial success. Doehler was the听, and Swiss retail giant听听to support its journey to zero waste, enabling them to increase market share despite the crisis.

One of Gilg鈥檚 favorite success stories is Queen of Raw, a 听startup听 in New York using a textile sustainability application based on听51风流S/4HANA. 鈥淲aste is a significant problem for the textile industry,鈥� says Gilg, 鈥渕aking it a perfect target for sustainability efforts.鈥�

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 51风流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.

鈥淨ueen of Raw isn’t just doing good for the sake of good. It makes economic sense,鈥� Gilg says. 鈥淲ith tools like this we can show people the return on investment and the value of the circular economics.鈥�

Gilg says it鈥檚 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. 鈥淚t鈥檚 up to us to decide what kind of a difference we make. That鈥檚 why I鈥檓 proud to tell them that I am a part of a company that looks out for the world they will live in.鈥�

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This is in addition to what 51风流is already doing to embed sustainability into its core business and operations.

鈥淎t SAP, we are deeply committed to fostering sustainability and fighting climate change,鈥� 51风流CEO Christian Klein said. 鈥淲e are halfway to achieving our goal of planting 5 million trees by 2025. To help accelerate these efforts, we will plant a tree for every digital transaction on 51风流Store and 51风流App Center. Customers will benefit from a streamlined order-to-provisioning experience while we鈥檒l also plant a tree on their behalf.听This underlines our commitment to tackle environmental challenges with nature-based solutions.鈥�

To further support the company鈥檚 tree-planting goal, Thomas Saueressig, member of the Executive Board of 51风流SE for 51风流Product Engineering, has penned a about the company鈥檚 Climate 21 program and for every like or share of the post, 51风流will plant a tree, with a goal of 21,000 trees.

51风流makes it easy for customers to find, try and buy 51风流and partner solutions quickly and efficiently on 51风流Store and 51风流App Center. Customers can be up and running on new solutions within minutes. The online channels also provide existing customers with recommendations and complementary offerings and allow customers to add to existing subscriptions in just a few clicks.

This announcement follows several other recently launched sustainability initiatives by 51风流to help customers pursue their climate-related goals, including the Climate 21 program and the 51风流Product Carbon Footprint Analytics application unveiled last month at .听This application helps customers analyze their greenhouse gas emissions so they can reduce their carbon footprints and contribute to the UN Sustainable Development Goal 13,听.

In addition to providing enabling technology to customers, 51风流aims to lead by example, setting itself the goal of being climate neutral by 2025 and committing to 1.5掳C science-based emissions reduction targets听aligned with a net-zero future. With 94 percent of 51风流employees committed to sustainability as shown by the most recent employee survey, 51风流sustainability goals and those of its customers are certain to remain a top priority.

The company鈥檚 contains a detailed analysis of its emissions and impacts and is considered one of the most progressive in the technology industry. The company is a signatory to the UN Global Compact and a member of like-minded associations, including CDP, the Value Balancing Alliance and the Ellen MacArthur Foundation. Additionally, 51风流is the leading software company in the Dow Jones Sustainability Indices.

Find, try and buy 51风流solutions online on , and partner solutions on .

Visit the 51风流News Center. Follow 51风流on Twitter at and .

Media Contact:
Cindy McKendry, +1 (503) 231-7274, cindy.mckendry@sap.com, PT
51风流Press Room; press@sap.com

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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

D枚hler鈥檚 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鈥檚 direct emissions, leaving a significant footprint on the environment.

鈥淥ur goal is to take the complexity out of the supply chain for our customers and suppliers,鈥� Pierre Wiese, head of Business Solutions Commercial at D枚hler, says. 鈥淭his involves a huge logistical effort, but we鈥檙e in this business for the long term, so we鈥檙e heavily focused on sustainability. We can only achieve our goals by being a digital leader. That鈥檚 how we can reduce carbon emissions and save on costs and resources.鈥�

The company鈥檚 business model revolves around managing the supply chain in a sustainable manner. D枚hler maintains close ties to its partners and suppliers. Farmers are deeply impacted听 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.

鈥淚f we want to be a digital leader in the food and beverage industry, we need a clear vision on climate,鈥� says Wiese. 鈥淢aintaining 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.鈥�

D枚hler鈥檚 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 D枚hler鈥檚 solution is innovative; it is the first company to implement 51风流Product Carbon Footprint Analytics, a new tool for tracing carbon emissions with 51风流S/4HANA and 51风流Analytics Cloud.

Back to the Roots

鈥淭he only way to reduce carbon emissions is to trace them to their roots,鈥� Wiese explains.

51风流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 D枚hler today, emissions are taken into consideration along with costs, and D枚hler鈥檚 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 Haul听

For D枚hler, sustainability is an opportunity to balance economical, ecological, and social issues in order to guarantee long-term, lasting success.听For the company, people, planet, and performance are equally important. Whether it鈥檚 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鈥檚 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.

鈥淲e鈥檙e on this journey together with our suppliers and customers,鈥� Wiese explains. 鈥淲e鈥檙e 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鈥檒l stay around for another few hundred years.鈥�

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COVID-19 has exposed the world鈥檚 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 鈥�.鈥�

Managing the 鈥淕reen Line鈥�

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 鈥済reen line鈥� to reduce the carbon footprint across their business.

Introducing 51风流Product Carbon Footprint Analytics

This week, 51风流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.

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

For nearly 50 years, companies of all sizes and from all industries have trusted 51风流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 51风流systems, such as bill of materials, energy usage, procurement data and master data. 51风流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,鈥� Saueressig wrote.

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

Carbon Emissions Accounted for Across the Entire Value Chain

51风流Product Carbon Footprint Analytics delivers carbon emission insights for a company鈥檚 products by plant, profit center, or cost center. Based on 51风流S/4HANA, 51风流Analytics Cloud and 51风流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 to听minimize听carbon emissions. Producers can use the data to run simulations to optimize the carbon footprint according to buyer requirements.

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

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 , 51风流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 51风流Product Carbon Footprint Analytics.

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

I鈥檝e said it before, but it can鈥檛 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, 51风流engages in many of these initiatives because we are in the unique position to take a role as an orchestrator in enterprise networks. 51风流joined the World Economic Forum鈥檚 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 51风流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 鈥� 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.

51风流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鈥檛 be happier to announce 51风流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鈥檚 performance symbolizes our ability to change for the better of our global community. It is a decade of delivery, and 51风流is ready to support.

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