Drive scalability, standardization, and trust in carbon data exchange across your supply chain
Target Scope 3 emissions and drive decarbonization across your organization through collaboration and the exchange of relevant carbon data with your trading partners.
Not long ago, I purchased a new down vest from a local ski shop. On the label was a QR code that allows me to “track my down.” When I scanned the code, I was taken to a website where I was able to see the origin of the goose down in my vest and by whom it was processed. There was also a verification from a third-party organization that certifies that products are safe for the environment, workers, and customers. Manufacturers use this organization to help them manage chemicals used in the process and replace harmful substances with safer ones.
These types of QR codes and tracing capabilities are becoming more commonplace, and not just in the consumer space. Business stakeholders—including regulators, investors, customers, and employees—are all looking to companies to not only claim to be more sustainable, but also to provide evidence to support that claim.
However, it is one thing to provide the provenance of a single material, such as goose down, but it is quite another to track scope 3 emissions and your carbon footprint along your supply chain. Yet, that is what is being requested and expected of more and more manufacturers. The key issue is that most carbon emissions are generated in the manufacturer’s supply chain—outside the four walls of their organization. And the only way to get at that carbon data, and provide the evidence needed, is to work closely with trading partners along the supply chain. And yet, when that data is provided, it is likely based on industry averages and is not primary data, but also, therefore, is less accurate.
Another problem is that only a small number of companies have a clear understanding of their greenhouse gas emissions, and, with thousands of suppliers, it is difficult to glean that information in a scalable, efficient way. For example, a single auto manufacturer may work with hundreds of tier-one suppliers, who in turn work with thousands of other suppliers across the multi-tier supply chain. In fact, for a typical manufacturer, upwards of 70% of their carbon emissions are classified as “scope 3” and are generated in the supply chain.
Introducing SAP Sustainability Data Exchange
Announced at Sapphire in May 2023, SAP Sustainability Data Exchange is a new solution from SAP that enables organizations to communicate and manage scope 3 emissions information in the supply chain. Interoperable and industry-agnostic, this solution effectively enables companies to digitally request carbon footprint data from their trading partners, who can then respond digitally within the solution. Companies can therefore move from using estimated values to using highly accurate data from suppliers for their footprint calculation.
The data exchanged with the solution complies with common standards such as those established by the Partnership for Carbon Transparency (PACT), hosted by the World Business Council for Sustainable Development (WBCSD) and aligns with the CATENA-X Conformity assessment body, such that carbon values can be delivered in a trusted, auditable way.
What’s In It For You
SAP Sustainability Data Exchange enables you to collaborate and exchange data with your trading partners regarding scope 3 emissions in your supply chain, supporting both your organization’s sustainability goals, and those of your trading partners. You can meet regulatory requirements across different regions, while facilitating more accurate carbon footprint calculations and reporting, through the use of actuals from primary supplier data, rather than using averages, estimates, or secondary research.
Having access to this type of information can help you identify additional carbon reduction opportunities in products and processes and better manage your carbon emissions, while enabling data standardization and sovereignty. And last, and definitely not least, you will be protecting, and even enhancing your brand reputation and customer satisfaction through increased accountability, transparency, and trust.
Deploying SAP Sustainability Data Exchange
SAP Sustainability Data Exchange is built on SAP Business Technology Platform (SAP BTP) and can be used standalone, where no installation is required. The solution offers open APIs that allow for seamless connection to a customer’s own carbon footprint calculator.
Ready to Get Started?
It is time to take your carbon accounting to the next level. Leverage SAP Sustainability Data Exchange to realize your organizational vision and reduce scope 3 emissions, with accurate actual data from your trading partners. And, with upcoming integrations with SAP Sustainability Footprint Management, you can realize visible change and connect seamlessly across platforms.
What are your challenges with measuring carbon emissions across your supply chain? Let us know your thoughts in the comments section below.