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House of ComplianceDuring CeBIT in March this year which had Green IT as leading theme, SAP announced a long-term strategic focus on sustainability, covering both its own operations and customer solutions for more sustainable business practices. In the meantime, SAP continued on this announcement at SAPPHIRE in May. At that event, SAP announced the acquisition of Clear Standards, a privately held innovator of enterprise carbon management solutions. Clear Standards helps organizations accurately measure, optimize and report greenhouse gas (GHG) emissions and other environmental impacts across internal operations. And in his SAPPHIRE key note under the motto “welcome to the clear new world”, Leo Apotheker built a bridge from SAP´s intensified focus on business analytics and strategic management, which Business Objects brought into SAP´s more transactional world, to the topic of sustainability. SAP´s recent announcements, its product roadmap including acquistions like Business Objects and Clear Standards, the first sustainability report claiming for carbon dioxide reduction goals – all these examples show that sustainability drives the company. But how does this impact me as a SAP user and customer? How will this influence the future of SAP´s solution SAP for Chemicals addressing the chemical industry as one of the first industries using SAP and one of the most regulated industries especially with regards to environment, health and safety issues? In my opinion it is fair to say that SAP is currently the only ERP provider with significant support of Environment, Health and Safety related capabilities, which is an outcome of the influence of our chemical customers exerted either directly or indirectly via working groups of VCI, CISUG or ASUG.  The result is  that SAP has been offering an EHS module as part of ERP for around 15 years now –  jointly developed with TechniData. Other applications came along such as SAP xEM (for Emissions Management) which became SAP EC (for Environmental Compliance) or SAP REACH Compliance to address the legal requirements of this new fundamental change of chemical legislation within the EU.  This is not the end but the start of either new solutions or enhancements of existing solutions which will allow companies to go beyond operational compliance. The goal is to run each business sustainably in such a way that  it can be repeated without negative environmental effects or impossibly high costs to anyone involved. Another goal is to consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations.  

But how can this happen? What can business applications do to support this? We are at the beginning of a new generation of EH&S solutions whose realization could be compared to the building of a house (see picture) 

 

House of Compliance

House of compliance

 

The body – EHS Management. Managing Environment, Health and Safety issues can be split up in the areas of Product Safety & Stewardship (products that comply with increasing number of regulations and that are safe to use), Health (of people) and Safety (of assets) and Environmental Performance (operations that comply with environmental regulations and minimize resource consumption, waste and pollution) 

The basement – GRC foundation. With each of the 3 areas mentioned above risks are related to that need to be mitigated and process controls are required that have to be managed. Moreover, globally differentiated regulations might impact trade and product shipments across country frontiers. 

The Roof – Sustainability Performance Measurement, Reporting and Management. Companies are now required to recognize their corporate responsibility and the need to ensure its business activities are sustainable.

This means that the company should carefully weigh the economic, environmental and social consequences of its business activities. For a corporation, this means pursuing maximization of the ”triple-bottom line” – social, environmental AND financial performance. In addition to financial reporting, companies are now reporting sustainability data, either as an addendum to their annual reports or as separate publications – and to take action to influence them according to a company´s strategic direction and goal setting

In a series of blogs I would like to outline from a solution management point of view how we can support you with IT solutions to become a sustainable company.  Here are the topics we will address in the upcoming months: 

Part 2: Operational Risk Management – how to achieve safe and environmental compliant operations based on SAP´s value scenario concept  

Part 3: Embedded Product and REACH Compliance – a strategic approach to safe and compliant products according to REACH and upcoming legislations 

Part 4: GRC foundation – how SAP´s GRC solution suite can support sustainability 

Part 5: Sustainability Performance Management – beyond compliance

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6 Comments

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  1. Jayakumar Indracanti
    Dear Dr. Marko,

    This House of Sustainability reminds me of concept of “Think Globally and Act Locally” – This House of Sustainability will in the long run evolume into an “Ecosystem of Sustainbility”.

    Thought ‘ Audit Management & Change Management” could be part of the Basement of House. Sustainability requires Internal Audits and Tracking against Internal / External Policy and Complying with International Standards and Organizations need to quickly change and adapt to the needs.

    Thanks and Regards

    Jayakumar

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    1. Marko Lange Post author
      jayakumar,

      this is indeed an important corner stone of sutainability – making it auditable what you report. I see this covered partially in Process Controls (checks of activites against destinct requirements) but more in Sustainability Performance Management (the roof). This solution allows to make the calculation and information gathering of environemtal KPIs auditable and transparent and it allows to assign those KPIs to thosed defined in catalogs like GRI.

      Kind rgds

      MArko

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      1. Marko Lange Post author
        Your are welcome. It is rather a clarifacation than a correction since your idea was not wrong. By the way: It really makes sense to have a look on new SAP SPM (Sustianability performance management) solution which will go in Ramp Up on Dec 7th. It is a very nice application coming up and I will blog on this later in this series of blogs from a chemicals point of view.

        Marko

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  2. Jayakumar Indracanti
    Dear All,

    Today while reading SAP Thought Leadership document on The Business of Sustainability(page no. 16), I understood that SAP can help Customers in many ways, but wishes to focus efforts on those facets of business to begin.

    Thank you

    Thanks and Regards

    Jayakumar

    (0) 

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