EDUCAÇÃO E TECNOLOGIA

Can SAP be carbon-neutral by 2023?

The COP26 conference will start in Glasgow, in less than two weeks from now.

The conference has very ambitious goals, to start with “Secure global net zero by mid-century and keep 1.5 degrees within reach“.

The COP26 will be a key milestone in the ongoing battle against climate change, and hopefully will deliver tangible moves.

As part of its integrated 2020 report, SAP expressed the aim to be carbon neutral in own operations by 2023. The carbon-neutrality target was originally set to 2025 and updated to 2023 considering the impact of COVID-19.

The scope of this target is defined as follows: “…Our carbon neutral target includes all direct and indirect emissions from running our business (Scope 1 and Scope 2) as well as a selected subset of indirect emissions from our value chain (Scope 3)….” (see [1] below).

First thing we look into SAP Analytics Cloud is how the total net carbons emissions evolved in the period 2000-2020 (using data available at [2]).

Net%20Total%20Emissions%20%28kilotons%20%28kt%29%20CO2%29%20per%20Year%20-%20years%202002%20to%202020

Net Total Emissions (kilotons of CO2) per year from 2000 to 2020

We can notice that:

  • Year 2007 was an all-time high with 598 kilotons of CO2 emitted
  • Year 2020 was an all-time low with 135 kilotons of COemitted

The 2020 emissions correspond to 22% of the emissions of year 2007 and 40% of the emissions of year 2000.

The huge drop in 2020 compared to 2019 is largely due to  the COVID-19 pandemic and the generalized move to a remote working model.

SAP%20Greenhouse%20Gas%20Emissions%20%282019%20vs.%202020%29

SAP Greenhouse Gas Emissions – 2020 compared to 2019

The emissions can be broken down per major area.

In 2019:

  • Business Flights was topping the list with 103 kilotons emitted.
  • Corporate Cars emitted 98 kilotons
  • Employee Commuting corresponded to 46 kilotons emitted. 

In 2020:

  • There was a huge drop of emissions caused by Business Flights – down to18 kilotons emitted. This is a drop of 83% compared to 2019.
  • Corporate Cars and Employee Commuting also significantly dropped.

As a consequence, when we look to 2020 emissions:

  • 52% came from Corporate Cars  – 70 kilotons
  • 19% came from Building Direct Energy – 25 kilotons
  • 13% came from Business Flights – 18 kilotons
  • 13% came from Employee Commuting – 17 kilotons

Obviously to tackle the 2021-2022 yearly targets as well as the 2023 carbon-neutrality, a huge focus will need to be placed on how SAP employees travel, whether they are using corporate cars, business flights or other means of transportation.

When we look from year 2007 (first year when a target was set) to year 2020, SAP was able to keep net new emissions below the self-defined yearly targets except for the period 2012 to 2015 and year 2019.

SAP%20Greenhouse%20Gas%20Emissions%20-%20Net%20Total%20vs.%20Target%20-%202007%20to%202020%29

SAP Greenhouse Gas Emissions – Net Total vs. Target – 2007 to 2020)

I used predictive planning to project the possible emissions for the years 2021 to 2023 and evaluate whether SAP will be able to meet its targets.

After putting the data in shape, I took advantage of the new planning model (see [3] and [4] to learn more on the new model) to model it.

The resulting planning model is straightforward:

  • there is only one measure that corresponds to greenhouse gas emissions (expressed in kilotons of CO2)
  • the three dimensions correspond to the date (at yearly basis), the version and the different KPIs (Building Direct Energy, Employee Commuting etc).

Structure%20of%20the%20Planning%20Model

Structure of the Planning Model

From there it’s easy to create a predictive scenario and forecast the evolution of Net Total emissions, which is one of the KPIs.

Settings%20of%20the%20Predictive%20Model

Settings of the Predictive Model

In a nutshell, this model forecasts the net total emissions for the period 2021 to 2023.

Please note this is taking advantage of the new feature that makes it possible to filter on dimensions & hierarchies (planned to release in the fourth quarterly release of SAP Analytics Cloud – in November 2021).

Net%20Total%20Emissions%20-%202021%20to%202023

Net Total Emissions – 2021 to 2023

The model is quite accurate, with 13% expected MAPE. A quadratic trend has been detected. You can notice small differences between the actuals (in light blue) and the predictive forecasts (in dark blue).

Predictions can be written back to the planning model and reported on using stories.

SAP%20Greenhouse%20Gas%20Emissions%20-%20Predicted%20vs%20Target%20-%202021%20to%202023

SAP Greenhouse Gas Emissions – Predicted vs Target – 2021 to 2023

Long story short, based on predictions, emissions targets would be met in 2021 and 2022. SAP would effectively be carbon-neutral by 2023. Of course this will mean continuous effort & evolution in the way the business is globally operated (please see more about this at [6]).

The 2021 official reports seems to be on track with what the predictions estimate.

Quoting the half-year 2021 report (see [5]):

  • “…SAP’s carbon emissions for the first half of 2021 totaled 45 kilotons (kt) compared to 90 kt in the first half of 2020…”
  • “…At the end of the first half of 2021, our carbon emissions (in tons) per employee was 0.9 (compared to 2.0 at the end of the first half of 2020), and our carbon emissions (in grams) per euro revenue was 3.6 (compared to 7.3 at the end of the first half of 2020)…”
  • …SAP is lowering its 2021 carbon emissions outlook. It now expects carbon emissions in a range of 90 kt to 110 kt
Half-year 2021 actuals Predictions (based on yearly data) SAP’s Initial Target SAP’s Revised Target
45 kilotons 127 kilotons 145 kilotons 90 to 110 kilotons

Predictions will likely be able to do a even more accurate job, using monthly data.

To wrap it up, it’s interesting to see how it is easy to use SAP Analytics Cloud to report, plan & predict on environmental data. I learnt new findings on the way and I am proud to see how much my company is engaged into the topic of climate change.

Thanks for reading this blog.

You can also refer to the following links to learn more on SAP Analytics Cloud:

[1] please refer to the pages 78-80 of SAP’s 2020 integrated report.

[2] https://www.sap.com/integrated-reports/2020/en/interactive-chart-generator.environment.greenhouse-gas-emissions.html

[3] https://blogs.sap.com/2021/05/18/overview-of-the-new-model-in-sap-analytics-cloud/

[4] SAP Analytics Cloud help

[5] SAP Half-Year Report 2021

[6] https://news.sap.com/2021/10/integrating-climate-action-end-to-end/