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There is only one planet Earth, yet by 2050, the world will be consuming as if there were three.

This is the very first sentence of a Communication from the European Commission to the European Parliament, The Council, etc.

The EU is working on a plan to create the new climate-neutral, resource-efficient and competitive economy, but many businesses ask themselves what it means for them.

What does it mean for businesses in Europe?

The Communication states: “A recent study estimates that applying circular economy principles across the EU economy has the potential to increase EU GDP by an additional 0.5% by 2030 creating around 700 000 new jobs. There is a clear business case for individual companies too: since manufacturing firms in the EU spend on average about 40% on materials, closed loop models can increase their profitability, while sheltering them from resource price fluctuations.”

The Case for Change

The “Case for Change” has multiple aspects:

A recent research from Oxford Economics and SAP shows that

58% of respondents say that efficiency as a primary driver behind their sustainability policies

The second most important point cited by nearly half of the respondents was that the sustainability related efforts help improve the reputation of the business or meet customer demand.

This means that sustainability is not Corporate Social Responsibility, but hard-core aspect of doing business. Enabling and automating this is, of course, SAP’s strength, so let’s look into what exactly SAP offers.

SAP solutions to enable the change

A big majority of companies are currently busy with SAP S/4HANA. They are either planning the move, executing the move or there are performing after go-live improvement and innovation projects on S/4HANA. I advise all these companies to look at S/4HANA from the point of view of sustainability too, because this itself has a lot to offer for sustainability.

Sustainability in SAP S/4HANA

Here are some examples of sustainability features in S/4HANA:

  • Supplier Evaluation: Gain transparency and insight through evaluation of your supplier portfolio

  • Asset Management: Optimize operations, reduce waste, save energy, lower footprint.

  • Streamlined MRP & Constraint-Based Production Planning: Analyze & manage material bottlenecks, have more current planning to increase efficiency and lower environmental footprint.

  • Dangerous Goods Management: Ship all goods compliant with DG regulations through integrated checks and regulatory content.

  • Product Marketability and Compliance: Ensure compliance of products and chemicals to secure the right to market, sell, and ship products.

  • Real-time Reporting and Analytics: Get granular insights with reporting and monitoring of real-time transactional data.

  • Inventory Management: ensure a streamlined material flow across all in and outbound logistics operations. Reduce energy and waste.

  • Warehousing: increase throughput and support accurate on-time order fulfillment with a maximum of transparency. Reduce energy and waste.

  • Circular Economy Logistics: Track and manage re-usable items like packaging materials or empties along their lifecycle in logistics processes to distribute responsibility and costs among the involved parties

  • Transportation Management: ship the right products to the right place at the right time, thus reduce energy use and footprint

  • Environment, Health and Safety (additional to the core): Ensure safety and business continuity. Mitigate health and safety risks by performing risk assessments. Create safety instructions and manage incidents.

SAP Sustainability Navigator

On the other hand, beyond S/4HANA, SAP has a portfolio of products specifically addressing sustainability topics grouped under SAP Cloud for Sustainable Enterprises. To explore these, a good starting point is the SAP Sustainability Navigator.