Climate Action with SAP’s Climate 21 Initiative
Climate Action – with the upcoming SAP Product Footprint Management product
Climate Action is one of the biggest challenges and opportunities of the 21st century. Industry increasingly recognizes the importance of climate action, and sustainability leaders are seeking solutions to innovate and grow through effective emissions and environmental footprint management including regulatory compliance and carbon-trading. Companies are looking for a holistic solution to take the right measures and are realizing that truly reducing their environmental impact can only be achieved with more detailed level assessments.
SAP is addressing the challenge of sustainability including climate action through our solutions. We enable organizations to go beyond measuring top and bottom-line results to include a third measure of success – a green line.
During the SAP Sustainability Summit, SAP announced SAP Product Footprint Management – a new cloud-native application built on SAP Business Technology Platform, coming this Q3 2021. SAP Product Footprint Management takes a holistic approach to assess product footprints across the entire product life cycle, from cradle to grave, helping companies to assess the environmental impact of their products at a detailed level.
Today’s climate challenges
For businesses to address climate action across their value chains, they face 4 key challenges.
First, companies are experiencing difficulties in gathering relevant data across the product lifecycle. Businesses need to aggregate their existing transactional and master data together with sustainability data, to achieve regulatory compliance, operational excellence, and innovation and growth.
Second, as no environmental reporting standards exist like IFRS in the EU or GAAP in the US, consistent reporting on environmental information poses a challenge. Businesses need well-defined, flexible governance models to establish baselines for measuring and reporting progress on reducing product footprints.
Third, data from environmental assessments are challenging to interpret. Analytics such as footprint dashboards and scores, and visualizations like heat maps and Sankey diagrams enable businesses with insights needed to prioritize actions and investments to create new value across supply chains.
Fourth, today’s footprint assessment projects require high manual efforts, which gather static data coming from multiple systems. Due to the high manual efforts, such projects are mostly done annually. Businesses need a prescriptive & pre-defined approach to accelerate value creation from their decarbonization strategies.
The Solution – SAP Product Footprint Management
SAP Product Footprint Management holistically addresses these challenges, enabling businesses to assess and manage their product footprints with the following planned 5 key product capabilities and dimensions –
Product Footprint Data Collection
As a first step, SAP Product Footprint Management converts transactional and master data in SAP S/4HANA into business activity metrics.
Sustainability Content Management
Secondly, SAP Product Footprint Management allows companies to evaluate different environmental impact or footprint categories such as carbon, water, energy, or land use, starting with Carbon.
Based on the chosen footprint category, the application enables uploading sustainability content from external data providers like lifecycle inventory databases (LCI) which offer scientifically based datasets with process data for thousands of products, and provide information with respect to their environmental effects such as their global warming potential.
Our ambition is to foster an open content partner ecosystem of any LCI data providers that have relevant and consistent lifecycle inventory data. Once all business data and sustainability reference content is collected, it is curated in preparation for assessments.
Product Footprint Assessment
Different calculation methods are supported for the assessment of the product footprint – bottom-up calculation and top-down allocation – so that based on availability and quality of data the appropriate method can be used. Product lifecycle phases are considered in the assessment – whether raw materials extraction, production, distribution, product use or end of product use.
Product Footprint Analysis
The outcome of the assessments is visualized so a user can further track progress of internal targets or initiatives.
Integration into Business Processes
In the last process step, the footprint information is integrated back into SAP’s business applications. By embedding the calculated footprints into the end-to-end processes – such as idea-to-market, source-to-pay, plan-to-produce, and in finance, such as product costing – the business users can make informed decisions by tracking progress in reducing footprints against baselines.
Additionally, the open and cloud-native app allows us to build public API’s by design, enabling partners to build new innovations or innovate new use cases. These APIs can be leveraged by intelligent digital technologies such as AI, ML, AR, VR, connected devices, networks, blockchain, etc. for impact at scale.
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A very interesting development and direction. Two questions came to my mind while reading:
Analytics in the first release will not be based on SAP Analytics Cloud (SAC). But our future vision and direction is to certainly use SAC which will directly consumes oData services provided by PFM enabling analytics of carbon footprint data.
As is standard practice at SAP, we will provide knowledge transfer for the product when it is launched and generally available. Stay tuned.
Thanks and regards,
thanks a lot for this interesting insight into your developments!
A question came to my mind reading this post: will it be possible to include process data from manufacturing and inbound/outbound in those calculations? E.g., emissions from transportation, energy use in manufacturing, and so on?
Looking forward to your answer!
thank you for your question!
SAP Product Footprint Management has been launched recently. Please find more information on the solution and the footprint calculations in our latest blog posts here:
SAP enables turning environmental footprint calculations at scale into a regular habit
Product Deep Dive: Welcome to Product Footprint Management from SAP