By Claudio Muruzabal, President of SAP South Europe, Middle East, and Africa
In spite of talking about climate change and global warming for as long as I’ve been working in technology, we’re at a tipping point. In less than seven years, global warming will be irreversible.
As businesses, we’re starting to feel the heat – literally and figuratively. Studies show that future years are going to be hotter than ever. At the same time, there’s growing pressure from all sides for companies to go beyond beautifully designed sustainability reports and actually demonstrate the carbon footprint of their products, and lay out clear plans to reduce them.
Consumers and customers don’t just value sustainability, they’re prepared to pay for it. More than two-thirds are willing to pay a premium for brands that are sustainable and environmentally responsible.
A recent Qualtrics study commissioned by SAP found that the vast majority of Italian and Spanish consumers choose their utility company based on their environmental and social policies. And investors are actively bypa ssing companies that fall short on their ‘green’ credentials: Assets in dedicated sustainable investment strategies have more than doubled in the last five years, reaching $1.3 trillion in June 2020.
Organizations Can Embed Economic, Social, and Environmental Impacts in Daily Operations
At SAP, we don’t see this as a threat. On the contrary, we see sustainability offering incredible opportunities.
Right now, we have the chance to reshape the way we make business decisions by embedding economic, social, and environmental impacts within our daily operations and supply chain planning; to embed sustainability as a new dimension of success into our analytical and transactional applications; to measure our success not only on traditional financial KPIs, but also sustainability metrics like CO2 footprint, energy and water consumption, and land usage.
For many companies, this represents a sea-change in the way they do business. Of course, it helps that we have a convenient measurable performance unit, in the form of CO2, to drive and track performance at global, national, and industrial levels.
Technology Could Reduce Carbon Emissions by 20 Percent by 2030
A report by GeSi, the Global eSustainability Initiative, suggests that technology has the potential to reduce global carbon emissions by 20% by 2030, hold emissions at 2015 levels and effectively decouple economic growth from emissions growth. In other words: you don’t have to pollute to thrive financially.
As a result, growing numbers of our customers are using software and actual data to embed sustainability impact directly into their raw material procurement, production execution, and transportation planning processes. Where sustainability reporting used to be the job of a separate sustainability team, carbon emission planning and sustainable resource planning are rapidly becoming the responsibility of purchasers and supply chain planners.
Ghana Uses Data to Support Socially Responsible Plastic Recycling
The movement is gathering momentum. In Ghana, a ground-breaking pilot project between the World Economic Forum (WEF), the Global Plastic Action Partnership (GPAP) and SAP is increasing visibility within the plastics supply chain with the hope of benefiting people, companies, and the environment.
Ghana generates an estimated 1.1 million tons of plastic waste every year, with only 5% collected for recycling. The project, which involves more than 2 000 Ghanaian waste pickers, allows civic-minded companies to pay a premium for socially responsible plastics and provides waste pickers with the opportunity to earn fairer wages. Policy-makers can also use the data to determine optimal locations for recycling facilities.