SAP in Sustainability – The Buzz that’s Redefining Business Models
While some laymen, might still choose to brush away sustainability as just a ‘buzz’, the world eagerly builds its consensus in the urgency to reach net-zero emissions and accepts ‘sustainability’ as one of the most overarching business themes of current times.
Sustainability was listed among the highest CEO priorities in 2022 and close to 80% of global CEOs trust that their sustainability investments are extremely vital to steer business growth in the next 5 years1.
Enterprises across the globe are already accelerating their carbon-neutrality and net-zero timelines – with ~40% Fortune 500 companies having fast-tracked net-zero timelines to 2040 and ~55% companies having augmented their carbon-neutral timelines to 20302.
While the organizational pivot towards sustainability is huge, it’s vital to quote that technology undoubtedly is a key enabler in all sustainability transformations. CEOs have already started realizing the criticality of technology, and investments in sustainability technology area are expected to spur over the next decade.
Sustainability could infuse as much as $150-250 Bn of additional technology spend by organizations globally by 2030 – a ~2.5-billion-dollar opportunity for tech service providers2
Key sustainability tech themes shaping businesses in 2023:
The role of tech in sustainability goes much beyond than just ‘green IT’. As more and more CEOs think about embedding technology in their processes, operations, products, and services, to achieve sustainability, several tech levers and themes are gaining traction in 2023.
ESG reporting and analytics solutions that provide reporting, compliance, and analytical solution across environment, social, and governance metrices is one of the most sought-after technology solutions by organizations.
Besides this, several other tech solutions emerge like climate risk assessment, carbon emissions accounting and management, supplier tracking and analytics, waste, and water management solutions, circular products economy, green operations design, etc. – that enable organizations measure, manage, and achieve their sustainability goals.
SAP sustainability solution offerings & impact assessment*:
As a pioneer in implementing sustainability and ESG practices in its own business, SAP has stayed upbeat in the sustainability arena and offers a myriad of innovative solutions offerings3. The SAP partner ecosystem in sustainability has also been constantly evolving, ensuring high-end implementation support across customers.
ESG reporting solutions is a key pillar offering in SAP’s sustainability solution arsenal. While Sustainability control tower (SCT) enables organizations to record, report sustainability metrices as per global and regional standards, solutions like SAP business integrity screening, empowers organizations across the globe in enhanced governance and risk metrics compliance by deploying Big Data screening.
EcoVadis API Connector for SAP Ariba enables organizations to assess, manage and analyze the ESG risks of their suppliers to ensure sustainable procurement.
Several clients like Colgate, Hitachi, Salzgitter AG, across industries like retail, steel, manufacturing, energy, etc. have been leveraging SAP sustainability solutions to make an impact on climate change specifically. SAP Product Footprint Management for example integrates with an organizations SAP S/4HANA system, imports carbon emissions factor and calculates monthly carbon footprints across the org value chain, view, verify and manage the same.
SAP’s circular economy solutions help organizations specifically eliminate waste and pollution, circulate materials and products across the value chain maximizing their use and help enable a future of zero waste. Several manufacturing players in fishing, food manufacturing and others are leveraging these solutions to reduce their water, energy consumption and make sustainable factories and supply chains.
Social responsibility solutions like SAP EHS, Fieldglass workforce management, are enabling organizations manage the human, health, and safety impact along with the environmental impact. Many leading players like Mary Kay, NBA, etc. have benefitted in creating safe, diverse, equitable, and healthy workforce using these solutions.
SAP in sustainability – What lies ahead….
SAP is on the agenda to advance its sustainability solutions and accelerate enablement of sustainable businesses across the globe.
Considering, a recent SAP Insights study’s finding that highlighted that close to 70% of global CEOs are struggling to measure ESG data across their value chains4, SAP is taking several measures in the form of planned features, M&As, strategic partnerships, investments etc. to align its sustainable offerings closest to the customer needs#:
- Deloitte and SAP5 recently announced expansion of their collaborated sustainable offerings to specifically help clients navigate climate-driven transformation.
- SAP Labs India6 infuses investments for accelerating adoption of SAP sustainable solutions in India by companies across verticals—steel, CPG, pharma, and oil and gas, etc.
- SAP and BCG7 partner to enable implementation of sustainability programs around eliminating carbon emissions, reducing waste, and tracking environmental, social and governance information.
- PwC and SAP8 make investment and launch an innovation strategy to help organizations achieve their ESG and Net-Zero Targets wherein they will be jointly creating trusted solutions to address key environmental, social, and corporate governance (ESG) business challenges.
- SAP has recently introduced several enhancements in its SCT9 solution to include more preconfigured new ESG regulations in US and Europe and many planned features are to be released in near future.
- SAP Japan introduced “Sustainability Service Package”10 that offers end-to-end support for corporate sustainability management. The solution offers support in following steps: Sustainability Advisory, Sustainability Assessment, and Sustainability Implementation.
While SAP stays committed to enabling every organization & every industry to become a sustainable enterprise – it has already highlighted its sustainability portfolio as one of its key growth drivers for FY 2023 in its latest annual results.
In 2023, we can expect that SAP’s sustainability solution to gain traction with customers and SAP partners pushing this arena down the runway. While SAP is still gaining market share in sustainability solutions, it is anticipated, that in 2023, SCT and other SAP sustainability solutions will be widely adopted, and we’ll see how SAP can help the world become better and sustainable!
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- IBM Sustainability Study, May 2022
- Sustainability – Opportunity for Tech Services and Solutions, NASSCOM, Oct 2022
- SAP Sustainability Solutions
- SAP Insights study, 2021
- Deloittee and SAP partnership, Aug 2022
- SAP LABs India News, Nov 2022
- BCG News, Mar 2022
- PWC and SAP ESG Innovation strategy, Dec 2022
- SAP Sustainability Control Tower looks to ease ESG reporting, Nov 2022
- SAP Japan introduces sustainability product, June 2022
*Only Key SAP solution offerings have been covered here for reference
# SAP sustainability initiatives listed are indicative and not exhaustive and have been primarily covered for the period of last one year