Climate change is real and organizations across the world are grappling to deal with managing emissions. As regulations and pressure from investors, shareholders, and consumers are driving companies to better account for their greenhouse gas emissions, many companies continue to use outdated tools and disconnected processes to account for the emissions in their operations and across their supply. Addressing this very challenge, the German multinational software company SAP has come up with a ledger-based account – Green Ledger - for measuring carbon footprint.
Using the Green Ledger, SAP says companies can manage the carbon entering and leaving their system and balance their “carbon books” the same way they balance their financial books.
“The key pillar for the success of the company is the management of its clean line, in addition to the top and the bottom line. CFOs and Chief Sustainability officers need to ensure compliance with 20 times more climate regulations than they had in the past. But at the same time, hardly any enterprise has a comprehensive view of the greenhouse gas emissions and this includes their scopes we output which represents about 80% of the overall carbon footprint,” says Christian Klein, CEO and member of the Executive Board of SAP SE.
SAP says averaged or estimated values, often calculated inconsistently across industries or geographies, are used widely. Companies also find it very difficult to share emissions data with their supply chain partners. Emissions occurring in a company’s supply chain, called scope 3 emissions, are outside the company’s direct control but represent up to 90 percent of a company’s carbon footprint.
This is where SAP’s Green Ledger will fit in. Enterprises need an accounting system for their emissions data that is as auditable, transparent, and reliable as their financial data. SAP’s green ledger initiative lets companies manage sustainable business data bottoms-up with data on a transactional level rather than using estimates or averages.
The data is vital to seeing holistically across the value chain to understand where emissions are occurring, setting accurate net-zero targets, and identifying specific areas for decarbonization impact. With transactional carbon accounting in the green ledger, companies can make granular, accurate, and timely decisions that are financially and environmentally sound.
SAP claims it is using the data sets to enable solutions for over 4,00,000 companies across the world. SAP’s overall sustainability offerings, including an update to SAP Sustainability Footprint Management and the new SAP Sustainability Data Exchange, will become part of its popular offerings - RISE with SAP and GROW with SAP for SAP S/4HANA Cloud, public edition.