Disclose Environmental Performance Data – Not only a question of regulations
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This is the start of a blog post series about disclosing environmental performance data from a SAP consultant experience based on projects and customer talks. You will learn in this series about roles in your company dealing with environmental data, how to achieve accuracy and reliability in environmental data and what SAP provides as software solutions.
In the past decades, the reporting of environmental performance data like air emissions or water usage was mainly driven by regulations in my projects. Nowadays, there are more stakeholders like NGOs, investors and citizens which can be quite energetic sometimes and put pressure on companies to be more transparent and disclose their environmental performance data. There is generally a public interest in the environmental performance of companies, especially when this public is already scrutinizing companies. And this powerful public interest has with social media a powerful tool to create public and economic pressure. Bad news about environmental performance or even incidents with releases into air or water are going viral in social media with an immediate and perceptible effect at the point of sales of products of the companies targeted.
In consequence, the functional roles dealing with emissions, emissions reporting, safety and incident prevention are the key players when a corporation is defining future sustainability strategy rounded up with a solid operational safety management system. Subsequently, the attention of corporate management has to engulf functional experts that have been considered often rather as a cost factor due to compliance reasons, like Sustainability Officer, Product Manager, Environmental Manager, and Safety Engineers. These are the persons with their expertise and experience, bringing to the table the right know-how about the origin of emissions, about performance data, about potential improvement in the operations to reduce emissions and assure at any time safety for people, assets and the environment. More and more I see these roles in my demo session.
Why should the top management bring these experts into the center of attention?
The Sustainability Officer is the person responsible for the Corporate Sustainability Report. A report covering all aspects of Environment, Health and Safety as well as social aspects, making transparent the actions a company executes to be sustainable. A typical de facto standard is the GRI framework for such a corporate sustainability report. But to come to these complete picture of sustainability a lot of numbers and Key Performance Indicators have to be collected, calculated and aggregated upfront. A challenging task considering the numerous sources the data could come from.
Same applies for the creation of a Corporate GHG Inventory. Collect, calculate and aggregate the Scope 1, Scope 2 and Scope 3 emissions is challenging. Good news, based on customer talks it looks like most of them can handle Scope 1 and Scope 2 quite well already. But Scope 3 – the indirect emissions coming from upstream and downstream activities are a hurdle. I would say, meanwhile 80% of my customer talks are about collecting scope 3 respectively supplier data. Gathering the supplier data in a structured way, automatically or at least semi-automatically could sometimes be painful and often suppliers (tier 1 suppliers) simply do not have the requested data available as they are dependent on other suppliers (tier 2 suppliers) again. That results in taking reference data from LCA databases, which is sometimes not so precise, to determine the footprint instead of having the supplier data.
The Product Manager seeking transparency in the Product Footprint because consumers demanding products which are socially and environmentally responsible produced causing e. g. less emissions during production and less waste at the end of their lifetime. In order to get the Product Footprint of the whole product lifecycle, the Product Manager needs to collect, calculate and and aggregate Scope 1, Scope 2 and Scope 3 data plus figures on waste and water. To achieve that, all business processes within a company, like purchasing, logistics, sales or distribution have to be analyzed on how they can contribute with their existing data to the Carbon Footprint determination. In most cases, it looks like that first an additional layer for environmental data has to be established in most of the companies’ business processes, from functional, technical and especially software perspective to achieve a carbon footprint.
The Environment Manager is the person responsible for an environmental friendly “machine room” – means, having sustainability embedded in the operational work. It is essential for the Environment Manager to have an overview about all activities in the plant(s) and their impact on the Corporate Carbon Footprint. Not only to report the GHG emissions according the GHG Protocol suggestions but also to be able to compare plants, activities and processes to identify ineffiency. And last but not least to simply fulfill local requirements like the 11. BImSchV (Emission declaration) or European reporting duties like for the European Pollutant Release and Transfer Register (E-PRTR). So again a question of collecting, calculating and aggregating environmental data.
The safety engineers, CSPs, process safety experts are rounding up the picture with preventive safety management to avoid the irregular environmental impact caused by incidents – e.g. releases to air, water, soil – apart from protecting assets and people. Irregular emissions due to incidents are putting at risk the sustainability objectives and are danger for the reputation and the brand value due to the potential and nowadays often imminent impact on shareholder value and at the point of sales of the companies’ own products due to greater public awareness and consumer sensitivity..
Whilst the Safety Engineers are in a proactive mode assuring undisrupted operative activity by avoiding irregularities through incidents, the three other roles – Product Manager, Environment Manager and Sustainability Officers – are basing their activity on the regular operative activity: Collect, calculate and aggregate data with respect to the corporations’ and products’ environmental impact, or in other words: environmental footprint.
This regular operative activity is the core capability of the SAP EHS Environment Management software solution. It serves as the central place to collect data from various source systems and provides a powerful calculation engine to calculate e. g. GHG emissions. At the same time it could acts as foundation for other Sustainability Solutions from SAP like the new SAP Product Footprint Management or upcoming SAP Sustainability Control Tower.
Want to know more on how to achieve accuracy and reliability in your environmental data? Watch out for the upcoming Blog Posts:
– Disclose Environmental Performance Data – Collect supplier data (Scope 3) via your purchasing process
– Disclose Environmental Performance Data – Build your own GHG Inventory
– Disclose Environmental Performance Data – How do I come to my corporate footprint and my product footprint without double work?
– Disclose Environmental Performance Data – Regulatory Compliance – build an inventory of your regulations, permits and policies
– Disclose Environmental Performance Data – Establish a waste management process
– Disclose Environmental Performance Data – 11. BImSchV and E-PRTR
I am looking forward to hear your comments and questions about disclosing environmental performance data. Because for me it looks like it is a journey to establish sustainability in the business processes and the software solutions.