As member of the Partner Solution Adoption team at SAP, I am responsible for the incubation of sustainability. I have spent the last year collecting best practices on how to get started with the topic as a partner. This blog, provides a step-by-step guide for SAP Partners.
Just a few days ago SAP has underlined the strategy “to enable every organization to become an Intelligent, Sustainable Enterprises and yet we still see many SAP Partners struggling to get started delivering on the “sustainability” dimension of that strategy, even though sustainability is not a vision anymore but is actually happening right now.
Partners might say “I will investigate that dimension of the Intelligent Sustainable Enterprise later” as many are still busy moving their customers to SAP S/4HANA. Others might say, “Sustainability is a good thing but not my business”. Well, we believe in any cases partners should have a closer look.
Sustainability is the next big transformation for our customers, and it is happening right now. Especially the EU but also in other parts of the worlds the regulators are finally becoming active to meet the Paris Agreement to limit the global warming well below 2 degrees Celsius above pre-industrial levels. Here are some examples what is happening right now:
Holistic Steering and Reporting: Many customers need to fulfill the ESG reporting requirements of the most common standards, such as GRI, TCFD, CSRD, EU Taxonomy and more with predefined sustainability metrics. For example, on January 2023 the Corporate Sustainability Reporting Directive (CSRD) entered into force.
Climate Action / Decarbonization: The Carbon Border Adjustment Mechanism (CBAM) is a new carbon regulation — a type of carbon pricing — to help the EU fight climate change and urges the need for companies of carbon intensive industries to measure and report on carbon emissions. CBAM will enter into force in its transitional phase as of 1 October 2023
Circular Economy - Plastic Tax regulations: The concerning fact is that the global economy is now only 7.2% circular (see here). A percentage that has decreased in the past few years. At the same time, we witness plastic tax regulations being announced in many countries such as the UK & Spain with others planning to announce regulations within 2023 and beyond (see here). With this fragmented approach to plastic tax, the need arises for solutions, that enables and simplifies, customers’ compliance to the various plastic taxes.
Social Responsibility: In 2023, the Supply Chain Due Diligence Act (LkSG) comes into effect in Germany, which applies to all companies doing business in Germany. This is the opportunity to make your customer more sustainable, agile and resilient. Learn more from a key customer who leverages Ariba Supplier risk to address LkSG on Jan 24th.
So, the transformation is happening right now! That means more and more customers are looking for someone who can not only cover in their transformation the move to digitalize and hyperautomate their process (with the move to S/4 for example) but help them at the same time to become more sustainable. Secondly, SAP and partners are very well positioned to help our customers here as a lot of data necessary to comply with and drive sustainability aspects is sitting in SAP systems.
Here is one example from Climate Action: Customers who want to drive down CO2e emissions through a more sustainable sourcing process start analyzing the as-is status per supplier or product and therefore need master data such as plant, product, material, and so on, but also transaction data like the material flow sitting in an SAP S/4HANA system for example (see also here). To calculate the footprint, you then add in a second step emission factors or actual emission data provided by the supplier. In a third step it is then important to infuse the source to pay process with the footprint data so that a purchaser can see the CO2e impact at the moment he/she is making decisions and therefore cannot only compare bottom line impact but also the impact on – what we call – the greenline (see also more details here). This is exactly the scenario that S/4HANA in combination with SAP Product Footprint Management is covering. So, for partners with S/4 experience it is quite easy to extend their knowledge towards SAP Product Footprint Management and offer new services in the sustainability space (for more information see here).
In the following you find a step-by-step guide for SAP partners how to get started with Sustainability
Decision: With which category do I want to start – pick your battles as the whole sustainability portfolio can be quite overwhelming
Holistic Steering and Reporting: background in Finance, Analytics and SAP Business Technology Platform are recommended (Governance Risk and Compliance is a plus)
Zero Emission with Climate Action: background in SAP S/4HANA recommended
Zero Waste with Circular Economy: background in SAP S/4HANA + SAP Supply Chain Management is recommended
Zero Inequality with Social Responsibility:
Within the 4 walls of a company – SAP Environment, Health Safety background and SAP Success Factors is recommended
Along the value chain (e.g. LkSG) – SAP Ariba Supplier Risk background recommended
Nominate one person responsible to incubate sustainability
Let us call this person a Sustainability Advisor
Goal of that Sustainability Advisor is to act as an incubator / single-point-of-contact within the partner organization but at the same time also to kick-start first workshops with your customers. Therefore, it should be someone who acts as an architect for sustainability who has a 360 degree view on the topic. This person:
Could be a new hired talent that has studied a sustainability subject at university (Sustainability might be also a chance to attract young talents)
Or a presales / business consulting / architect who is interested in the topic
The target profile that this persona should have / build up:
Sustainability domain knowledge (regulations, taxonomy, abbreviation etc.) – See our enablement content here (SAP Partner access only)
Softskills: PreSales / advisory methodology on how to run an interactive workshop with a customer (explore workshops)
Many customers might have targets – but no action plan how to get there (see research by Oxford Economics and SAP). Customers are therefore looking for advice – a chance for every partner to build up a business consulting practice around sustainability
Offer explore workshops for first customers driven by Sustainability Advisor – Let us call them “Impact Labs” (short trailer)
Select your customers by
Checking sustainability goals on customer’s homepage
Sustainability is relevant for all industries – however there are some who feel the pressure the most: Chemical industry (esp. fertilizer), Mill Products & Mining (esp. steel, aluminum, cement), EC&O (esp. constructions and real estate operators), Financial Services, Consumer Products (esp. food and cpg), Utilities (esp. energy), Discrete Industries (esp. automotive)
Here you find some templates that you might want to leverage for the Impact Lab
Output of Impact Lab should be an innovation roadmap
Drive adoption of innovation roadmap together with your customer
Win and implement first scenario
Create a happy reference customer
Go back to #4 and repeat!
So, I hope that is helpful and triggers some thoughts and actions to get started with sustainability. Sustainability for sure is a business model for SAP and can become for partners as well. But of course, it is much more than that. SAP’s CEO Christian Klein stated “the world’s greatest challenges require change at every level and on a global scale. When it comes to protecting our planet, organizations in every industry can make an important difference by building sustainability into the fabric of how they do business.” (see here). Thus, SAP believes by working together, we can deliver the positive outcomes we need for business, our environment, and societies everywhere. This is Economics.
So, call 2 action for all SAP partners that have not started the sustainability journey – go back to step # 1 and start step by step today!