Climate and Clean Economy, at the forefront in SAP

Climate and Clean Economy, at the forefront in SAP

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We are living difficult times with the COVID-19 outbreak. We have changed our priorities in many aspects, in our lives, in our businesses. Companies start showing signs of social responsibility for the coronavirus crisis and the crisis has brought out the best in the business fabric. Coronavirus could do more for the planet than many government policies: isolation and other changes in human behavior during the pandemic are having unexpected consequences on the environment.

The measures that we have been forced to adopt due to the expansion of the coronavirus are causing changes in the lifestyle and individual behavior of each one of us. Many of the actions we take in response to the pandemic could have the benefit of a reduced carbon footprint, something that hardly any policy measure has achieved so far.

But there was other crisis before COVID-19: Climate change remains to be a huge problem and the open challenges are numerous: the global warming, the circular economy, plastics production reduction, food waste, air quality, pal oil, etc. Environmental and societal factors represent some of the greatest opportunities and threats our customers face. Investors agree that maximizing shareholder returns can no longer be the primary goal of the corporation, consumers give more importance to sustainable products and services over pricing and our employees focus career choices on responsible employers.

“Investors agree that maximizing shareholder returns can no longer be the primary goal”

For example, our ‘SAP Ocean Vision 2030’ program eliminates Ocean Plastic Pollution By 2030. We believe resource productivity is at the heart of the connected and Intelligent Enterprises and we aspire to a world with zero waste.

In SAP we know we need to keep on developing actions to reduce that Carbon footprint once the lockdown finishes and new normal establishes in our lives. In SAP we are taking climate change very seriously, and we believe the first way to reduce Co2 footprint is to define an easy way to measure it and track it along your end to end value chain.

In this historic moment we are in a better position to do that. We can leverage on exponential technologies like AI, Blockchain and Big Data to measure, track predict and visualize the Co2 emissions of our products and services and define actions to reduce those.

We believe that greenhouse gases need to be tracked on the transactional level, along with other information about products and services such as
cost, time, quality, and origin. And for that we count on disruptive technologies like Internet of Things (IoT), Advanced Analytics, Digital visual dashboards and Big Data to collect relevant information across the end to end value chain of the customer.

To optimize the GHG footprint of its operations, the best starting point for an enterprise is the end product.
The end product accumulates all the GHG emissions generated by all suppliers and all emissions by the enterprise itself, in much the same way that an end product accumulates all costs to calculate profitability.

That’s why the methods used to analyze and optimize the GHG footprint of end products and services can be directly adapted from cost controlling.
We envision a “sustainability ledger” that supports multiple sustainability-related attributes of products and services is the right approach for understanding and then optimizing the GHG footprint of products and services.

Sustain Long-Term Business Viability

If a portfolio analysis indicates that a product, a plant, a supplier, a piece of equipment, or a business unit has been consistently under-performing, then
you will find a way to fix it or close it. There is no fundamental difference between cost, revenue, and GHG performance: If an entity becomes a liability it makes sense to do something about it. We can’t make those hard decisions on your behalf.

But we can give you the tools to analyze your business portfolio and identify the things that need attention.
Bang for the Buck We are talking textbook stuff here. If you find that a product or plant or piece of equipment underperforms relative to some important metric such as cost, revenue, quality, or risk – then you start
thinking about corrective action.
Imagine that your analysis includes the CO2 footprint of these elements; now you “just” have to calibrate the importance of the GHG footprint
relative to the other business metrics to make your well established tools work again.

Ernesto Rincon

Ernesto Rincon

I am leading the Innovation Business Development Team for South Europe region at SAP. I am advising C-level management at strategic customers on the impact of Digital Transformation and Innovation on their business models. I am also leading the Digital Finance practice at University Carlos III of Madrid and I am Co-director of the Master of Tech Processes Sales at Sales Innovation School.

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