Helping business thrive in a Circular Economy
How does society solve the waste crisis and eliminate the tidal wave of plastic waste reaching our oceans each day? In 2020 SAP set out on a mission to create the technologies that would support the business ecosystem in delivering a clean ocean by 2030.
During the recent SAP Sustainability Summit we took a critical next step in this plan, announcing the upcoming launch of SAP Responsible Design and Production, a new solution to help producers respond to Extended Producer Responsibility (EPR) obligations and other public commitments. EPR regulations have seen a rapid expansion in terms of scope and scale in recent years. With increasing public pressure and focus from the network of ‘Plastic Pacts’ emanating from the Ellen Macarthur Foundation, WRAP and WWF, we are seeing a paradigm shift in momentum towards producer driven action. In the UK alone, Government estimates project a £2.7 billion per year increase of reprocessing costs from local authority budgets. Consider some 400 schemes in the pipeline globally and it is clear this is set to become one of the most disruptive factors for businesses producing physical products over the next decade.
SAP has been working closely with industry leaders, NGOs, regulators and partners over the past 3 years under a project known as ‘Plastic Cloud’ to tackle this problem at scale with intelligent technologies. The first product from this activity, SAP Responsible Design and Production will help businesses keep track of public commitments and new regulations so they can manage the operational costs associated with downstream processing and gain better visibility of material flows overall. These insights can be used to inform better decision making when managing a sustainable product portfolio. Managing these multiple factors is fast becoming one of the most complex challenges across the consumer industry today and with this new solution, businesses can embed circularity principles into core business processes, helping to eliminate waste and unlock new value. You can find out more about the work we have been doing with Nestlé who joined me on a panel at the SAP Sustainability Summit.
It starts by capturing critical data points that describe every material element from primary to tertiary packaging. The solution then brings together local requirements for EPR and tax declarations to provide accurate reporting, analysis and simulation of new regulation and materials scenarios. Insights are then shared to key stakeholders to help track corporate and public commitments and deliver standardised reporting for NGOs such as the Ellen MacArthur Foundation and WRAP.
Future planned scope to support responsible sourcing includes deeper integration with the SAP Business Network enabling sourcing of secondary materials and transparency on social impact. For example, our work with the World Economic Forum in Ghana has been leveraging SAP Rural Sourcing Management to engage waste picker communities ethically and responsibly in the first mile acquisition of waste materials where formal waste management infrastructure is developing.
Our pilot project with Eastman Chemicals is proving the role of SAP Green Token solutions in tracking rates of recycled content of plastics and helping producers gain transparency into raw materials across global supply chains to support stakeholders and tax obligations.
Integration with partner solutions can also help model downstream material flows and connection into reuse systems to help plan interventions, recapture valuable materials and limit EPR costs. Our pilot activities with partners such as Topolytics in the run up to COP26 have been showcasing the value that downstream insights can bring. And with the launch of SAP Responsible Design and Production, we are establishing the foundation that can unlock this value across the full ‘circular’ system.
Achieving a clean ocean by 2030 is both an ambitious goal and a planetary necessity. As Peter Drucker’s famous quote goes, “you can’t manage what you can’t measure.” With this launch, we are able to take the first step towards fully understanding the work needed in shifting to a world of zero waste.
For further insights, I encourage you to read Thomas Saueressig’s article “The Path to a Low-Carbon Future is Circular.” And let us know what your thoughts are in the comment section below. For any questions you may have, visit your SAP for Sustainability community page to learn more and connect with us via Q&A.
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