Tracking scope3 emissions using SAP SDX

[AmitTandon]

Sustainability has become one of the defining leadership challenges of our time. It is no longer a reporting obligation but a factor that shapes competitiveness, investor confidence, and the trust of customers and communities. Many companies have already made progress by reducing the emissions they control directly through their operations (Scope 1) and their purchased energy (Scope 2). The harder truth is that most of the impact lies elsewhere. Scope 3 emissions created across supply chains, logistics, travel, and end use of products often account for more than 70 percent of a company’s total footprint.

Because they sit outside direct control, these emissions are often underreported and overlooked. Yet leaving them unaddressed carries serious consequences: exposure to new regulations, declining ESG scores, and loss of stakeholder trust. The path forward is clear. Businesses must extend responsibility beyond their own walls, working with partners, suppliers, and customers to create transparency and accountability across the value chain.

Following are the key challenges for businesses committed to sustainability for scope3 emissions:

• Trust and Verification: Gathering comprehensive and accurate data from across the value chain is a difficult task. Companies must access multiple suppliers, each with their own reporting standards and capabilities, making the consolidation and verification of data a significant hurdle.
•  Standardization: Without standardized metrics and reporting frameworks, comparing emissions data across suppliers or industry benchmarks becomes challenging. This lack of standardization hampers the ability of businesses to make informed decisions regarding their supply chain practices. 
• Accurate Data collection: In an era where greenwashing is a growing concern, establishing the credibility of reported emissions data is paramount. Companies need mechanisms to verify the authenticity and accuracy of the data they receive to ensure it truly reflects their environmental impact.

SAP SDX for Scope 3 Emissions Management

The SAP Sustainability Data Exchange solution addresses above challenges and allows to exchange ‘Scope 3’ product footprint data with supply chain partners. The exchange of footprint data allows organizations to move away from using averages and estimates and use primary data instead. As a result, it helps companies to increase the data accuracy of their footprint calculations.

Some of the key product features for SDX are listed below :

Sno	Feature	Description
1	Exchange footprint data with supply chain partners	SAP Sustainability Data Exchange enables the exchange of product footprint data between partners. For purchased products, footprint data can be requested and received from connected suppliers. For sold products, footprint data can be sent to connected customers
2	Review and manage footprint data	SAP Sustainability Data Exchange allows you to review and manage your received (from suppliers) or calculated footprint data.
3	Integrate footprint data to and from other business applications	SAP Sustainability Data Exchange supports the integration of product footprint data to and from other business applications. Footprint data received from suppliers can be distributed to other applications (for example, SAP Sustainability Footprint Management). Similarly, footprint data can be imported and sent to customers.

SAP SDX enables data exchange by requesting and sharing carbon data. It achieves following advantages while exchanging data across supply chain:

Collaboration: It enables sharing of actual product carbon footprints (PCF) across value chains with increased interoperability and data sovereignty of data owners

Standardization: It simplifies audits with standardized data models and workflows and exchange information seamlessly following industry frameworks and requirements

Carbon reduction: It Identifies products or processes with high potential for CO2 reduction, avoid double emissions counting and optimize footprints

Industry specific Solutions: It enables industry specific extensions with WBCSD for e.g. adoptions of the Catena-X data model as an accepted PACT data model for automotive

SAP Sustainability Data Exchange is open for everyone across complex supply chains. Some of its unique integrations are:

• Cloud-based solution with open APIs
• Independent of company size
• Industry agnostic
• Interoperability: Communicate and exchange data with different systems and programs

Conclusion

In today's rapidly evolving world, the Energy and Utilities Industry are at the forefront of addressing sustainability challenges. With a strong commitment to reducing carbon footprints and minimizing emissions, the industry is taking significant strides towards a greener future. Emissions, particularly greenhouse gases, are a major concern as they are released during activities such as emissions from purchased goods such as manufacturing equipment, solar panels, wind turbines, and other components used in energy production. Additionally, emissions from losses in power grids and pipelines during delivery contribute significantly to scope 3 emissions. By leveraging innovative solutions and technologies, the Energy and Utilities Industry is poised to make a substantial impact in mitigating these environmental challenges and achieving their sustainability goals.

As Energy and Utilities industry are gearing up to tackle these challenges, TCS, which is a strategic partner of SAP, could help them tackle these challenges with the help of SAP SDX . TCS, which is a technology consulting firm, would help industry in setting up the systems, enabling the required data transfers into the systems through SAP SDX - achieve sustainable supply chains by requesting and sharing carbon data.