Sustainability has been defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” by UN World Commission on Environment and Development. In practical terms, it can mean the ability to manage natural resources well over the long term. Better processes & systems can help in managing today's needs without depleting resources or causing harm to the environment, economy, or society. Sustainability involves 3 main aspects of Environment, Socials & Economics.
The essence of Sustainability is to create a harmonious balance between these 3 pillars to ensure that current and future generations can thrive without compromising the planet's health or societal well-being.
From an organizational perspective, there is increasing consumer pressure on companies to target Carbon Zero Future. There are more & more regulations (like European Sustainability Reporting Standards or ESRS, Human Rights Due Diligence, Supply Chain Act Germany) to meet targets in line with Paris Agreement & COP26. Investor expectations are rising for significant Scope 3 (indirect emissions) reduction efforts. Up to 90% of a company’s environmental footprint lies in its supply chain – meaning that the supply chain represents a major opportunity for companies to further their environmental, social and governance (ESG) objectives. Refer Value chain and supply chain sustainability for details.
The purpose of this post is to highlight the topic of Sustainability for discussions. It provides brief introduction to the subject, touches upon the Sustainability solutions from SAP and provides high level inputs & resources around Sustainable Procurement with SAP Ariba.
SAP's purpose is to help the world run better and improve people's lives with sustainability at the core. In line with it, SAP offers a wide array of Sustainability solutions for its customers to embrace sustainability effectively. Solutions span across topics like ESG reporting, Climate action, Circular economy, Social responsibility, CSRD & Sustainable procurement. With these solutions, there is an opportunity to positively influence 12 of the 17 UN defined sustainability goals. Some of the prominent sustainability solutions from SAP are as below. These are SAP Sustainability solutions focused around SAP S/4HANA / SAP S/4HANA Cloud and we talk about SAP Ariba related sustainability solutions in the next section.
It is a solution designed to help businesses accurately account for the carbon they produce across their value chain. It integrates environmental data into financial processes, thus enabling organizations to manage their sustainability performance as effectively as they manage the financials. For quick product overview, refer this 3 minutes video.
This solution helps businesses measure, manage, and reduce their environmental impact along the value chain. It enables organizations to calculate and track their carbon footprint, water usage, and other environmental metrics. It is a cloud application running on SAP Business Technology Platform (BTP). For quick product overview, refer this 2 minutes video.
It is cloud solution to help businesses monitor and manage their sustainability performance. It helps organizations to track, analyze, and optimize their sustainability initiatives & achieve goals like reducing carbon footprint, delivering on green line performance, and meeting diversity and inclusion targets. For quick product overview, refer this 2 minutes video.
It is a solution designed to enable secure and efficient exchange of sustainability-related data between businesses and their partners. It aims to enhance collaboration, compliance & transparency across the entire supply chain by enabling organizations to share and access verified sustainability data seamlessly. It is a based on SAP Business Network & built using the technical framework of GreenToken by SAP.
It standardizes data exchange by following technical specifications of the Partnership for Carbon Transparency (PACT) framework of the World Business Council of Sustainable Development (WBSCD). It also offers interoperability with other equivalent networks using WBCSD PACT standards. Companies can use SAP SDX along with SAP Sustainability Footprint Management. Alternatively, if businesses already have a solution that calculates carbon footprints effectively, they can use SAP SDX to share this data securely. For more details on the solution, kindly refer these links.
Adopting digitalization helps in sustainability by providing the tools and insights needed to operate more efficiently, reduce waste, and make informed decisions that benefit the environment and society. For overall guidance on embracing Sustainability in procurement processes, refer this 10 minutes video.
Using SAP Ariba in itself reduces paper work and help with resource optimization contributing to sustainability. Also, with its wide range of solutions & strong collaboration capabilities, SAP Ariba can help an organization further to achieve its Sustainability goals while working with the supplier base. Additionally, new solutions & features help to take it even further. Below figure attempts to present various ideas through which SAP Ariba can contribute to Sustainability goals.
Embedding Sustainability in Source to Pay Process
Sustainable Supplier Finance program helps & finances buyers to incentivize supplier who adopt sustainable practices. Buyers can apply a pricing benefit for suppliers who meet predefined sustainability criteria. Taulia, a SAP company, offers solution to make this effective for companies. Buyer can easily track the suppliers’ ESG performance and incentivize them to improve it. Kindly refer this link for more details.
This solution offers SAP Ariba customers the ability to enhance functionality and integrate applications that support procurement sustainability goals. It is a Partner solution from Cordis Solutions, a partner company of excelerateds2p & is available on SAP Store. Solution is a comprehensive collection of packaged services, pre-built content, enhanced configuration, and complimentary extensions built on BTP to support a new or existing Ariba customer on their sustainability journey. For more details, refer Sustainability for SAP Ariba
EcoVadis is the universally recognized assessment platform which rates businesses' sustainability based on 4 key categories: environmental impact, labor & human rights standards, ethics, and procurement practices. It provides 2 solution extensions as below for SAP Ariba which are available on SAP Store.
This SAP Store App for Suppliers can help them to add their sustainability rating in SAP Business Network profile. It can help Suppliers stay compliant & also boost their sales. You can also refer to this Blog Post from Amanda @amandalaldin for more details - Standing out as a sustainable supplier with SAP Business Network and EcoVadis
SAP Business Network Supplier Profile with Ecovadis Ratings
This SAP Store App integrated with SAP Ariba Supplier Risk helps you review the ESG risk and performance of your Suppliers with robust and reliable sustainability scorecards, and take action to reduce the carbon footprint. Risk scorecard can directly be seen from the Ariba SLP Supplier 360 dashboard. This direct integration helps to make informed decisions & take positive actions based on sustainability targets resulting in higher efficiency and more sustainable value chains.
Risk Scores in SAP Ariba SLP Supplier 360
Sustainability & Profitability go hand in hand, and AI can play a crucial role in embedding them together. SAP aims at using SAP Business AI to help customers optimize for sustainable impact across their full value chain, enabling the intelligent, sustainable enterprise, powered by the pool of foundational business data. AI can help deciding on data-driven ESG and net-zero goals, strategies, and actions. It can also help complying with regulations and automate sustainability reporting. Few use cases already exist and others can be built using SAP BTP. Kindly refer below resources for more details.
In today's world, sustainability is no longer an option but a necessity for organizations aiming to thrive and remain competitive. SAP Ariba provides a platform to help businesses achieve business goals while integrating sustainability into their procurement and supply chain operations. It helps businesses to make informed decisions that positively impact the environment while driving economic value.
By adopting SAP Ariba, digital transformation and sustainability can go hand-in-hand. Organizations can contribute to a more sustainable world and create long-term value for all stakeholders. In summary, embracing sustainability with SAP Ariba is not just about compliance and efficiency, it's about redefining business success in the context of our global responsibility. By embedding sustainable practices into core operations, businesses can pave the way for a more sustainable and prosperous future for all. It can help the world run better and improve people's lives with sustainability at the core.
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