SAP Sustainability Day Recap: Zero Inequality and Holistic Steering and Reporting

The SAP Sustainability Day was a virtual event which took place on Oct 28, 2021. The 4 tracks of the event were organized along SAP’s Sustainability Portfolio:

  • Zero Emissions with Climate Actions
  • Zero Waste with Circular Economy
  • Zero Inequality with Social Responsibility
  • Holistic Steering and Reporting

This blog covers Zero Inequality and Holistic Steering and Reporting. Zero Emissions and Zero Waste were already covered in my previous blog.

The United Nations Global Impact defined social responsibility as “Do business in ways that benefit society and protect people”. This means not only employees, but also suppliers and the overall community too. It covers aspects such as labor practices, diversity, equity & inclusion, human rights, health & safety, fair operating practices and organizational governance.

There is urgency to act, just to name 3 reasons:

  • 40 million people are estimated to be trapped in modern slavery worldwide. 1 in 4 of them are children, and almost three quarters are women and girls.
  • Over the past decade, extreme weather has displaced 20 million people a year as a cost of the climate crisis.
  • Climate change is the greatest threat to human health in recorded history. Air pollution causes between 3.6 million and 9 million premature deaths a year.

How can SAP solutions help?

  • Manage Business impacts on employees
    • Manage risks, safety, and health in the workplace to protect employees and business.
    • Drive diversity, equity, and inclusion in work experiences that align people’s wants, needs and expectations with company goals.
    • Strengthen employee engagement and personal growth with life-long learning and development.
  • Sustainable Procurement with Suppliers
    • Sustainable procurement enabling supplier diversity, transparency and risk mitigation.
  • Ethical Business Operations in Community
    • Safeguard business continuity through ethics and integrity in society and community.
    • Mitigate reputational risk with product responsibility and compliance.

The following picture gives an overview of all the SAP solutions linked to Social Responsibility.

SAP Health & Safety Management is the flagship product in this area.

The main benefits are:

  • End-to-end risk management minimizing the severity and frequency of incidents
  • Critical safety information available to all – right from the top floor to the shop floor
  • Reduced time for incident processing, regulatory reporting and corrective action

The simplified process of ensuring workplace safety looks like this:

SAP presented various responsive (mobile ready) apps, integration with IoT sensors and embedded analytics, which are parts of the solution. SAP aims at incorporating the management of health and safety from the shop floor to the top floor.

When it comes to suppliers, SAP demoed SAP Intelligent Spend Management, which focuses on 3 topics:

  • Supplier identification
  • Supplier self-service maintenance
  • Global view of supply base

When identifying suppliers, I found it interesting that they can be filtered by their social responsibility, fair trade certificate, etc. The global view is very useful too, here for example different types of risks can be analyzed overall or zoomed into given suppliers.

As a customer story, SAP featured Chobani, which is a wellness-food company with a strong social responsibility DNA. For example, they work with refugee centers, focus on mental health of employees, provide day care subsidy, support during COVID, which really helped them to navigate the crisis and keep meeting customer expectations.

Finally, SAP gave a glimpse of the future roadmap by demoing the SAP Sustainability Navigator.

The full Zero Emissions webcast is available here.

ESG Reporting is a very hot topic in today’s business world. SAP started with explaining that ESG Reporting is complex and changing fact because of the following changes:

  • VRF brings businesses’ and investors’ needs together as it advances ESG disclosure standards development
  • Carbon first disclosures from IFRS ISSB coming, and Social Taxonomy already shows importance of “S”
  • Evolving standards on sustainability reporting, varying materiality across industries supply chains, result in complex requirements for integrating ESG impact
  • Mix of regional voluntary and mandatory regulations, make best practices, auditable standards tough
  • Trillions of assets managed by investors need audit-ready data backed by trusted and transparent information, as greenwashing remains a major concern
  • S&P ESG credit indicators for companies in corporate, infrastructure, banking, and insurance sectors

It’s not just a reporting topic. The perception of performance has changed. In today’s world producing profit is not sufficient any more, overall performance of organizations is judged on more grounds including the impact on people and planet. This is what SAP is reflecting in their Holistic Steering and Reporting solutions.

How can SAP help? SAP Holistic Steering and Reporting works in 4 steps, which again clearly indicates that it’s not only a reporting tool:

  • Manage business processes
  • Create transparency with data
  • Insights
  • Feedback loop and improvement

Maybe obvious to say that SAP has a unique positioning, because it can rely on data in SAP finance and HR systems, but also the various sustainability solutions in their portfolio. On top of this, data from other sources can be brought into the system as well.

SAP’s solution for Holistic Steering and Reporting is the SAP Sustainability Control Tower. It supports multiple frameworks such as World Economic Forum, Global Reporting Initiative and United Nations Global Compact. The following picture takes the examples of the WEF and shows how the various SAP solutions support this framework.

This is how it looks in the Sustainability Control Tower:

SAP’s focus for the Sustainability Control Tower for the initial release and beyond are the following:

  • Main Theme
    • For strategic performance management and related reporting
    • ESG and financial / operational data integrated for a holistic view
    • Facilitate the journey towards having the right data into the right place
  • Business Outcomes
    • Key figures harmonized and in one place
    • Key figures along established structures from Finance, HR, Real Estate, and Operations
    • Key figures consistently available at target granularity
    • Ad-hoc relation of key figures e.g. for intensities like “GHG emissions per revenue”
    • Understand gaps in data availability and quality

Vestas, as a customer reference, explained how they work with science-based targets to become carbon neutral by 2030 and lower CO2 emissions scope 3 by 45% by 2030. Other aspects they are working on is recyclability of their products, safety for employees, inclusive workforce, etc. Vestas issues annual sustainability reports too. They explained how having the right data available and in the right quality, integration and automation in creating a holistic overview are very important for them.

Finally, Daniel Schmid, SAP Chief Sustainability Officer explained how SAP is committed and proceeding on the topic of Sustainability and using their own sustainability products.

SAP closed the session by explaining that next year the steering aspect of SAP Sustainability Control Tower will get stronger.

The full Holistic Steering and Reporting webcast is available here.