Inside the SAP and EY Sustainability Alliance

Last October saw SAP and Ernst & Young (EY) expand their alliance to help organizations accelerate value-led sustainability action.

The union between Walldorf and the consultant giant sees teams of EY professionals advising SAP and customers on the core design and blueprint for the next generation of software solutions to create more influential climate, nature and social impact strategies.

SAPinsider spoke with Sheri Hinish, global consulting sustainability technology and ecosystems leader at EY to explore the alliance further and what it means for Insiders.

SAPinsider (SI): What constitutes value-led sustainability action?

Sheri Hinish (SH): Value-led sustainability action transcends the traditional “tick-the-box” approach to environmental, social and governance (ESG) commitments. It’s about leveraging sustainability as a springboard for innovation and growth, which in turn catalyzes a positive impact on both the bottom and top lines of business.

We are championing a model where cost savings from emissions reduction can fuel investments in new, sustainable business models.

SI: The announcement mentioned that both companies will collaborate with select clients to develop the requirements and analytics needed to move greenhouse gas (GHG) accounting from estimates to an accurate reflection of a company’s footprint. How will EY and SAP choose which clients to work with in this endeavor?

SH: This alliance is an evolution of our long-standing commitment to helping clients credibly move from greenhouse gas accounting estimates to accurate, verifiable data that brings the rigor required for transformative sustainability performance management.

This shift is critical because it lays the groundwork for authentic accountability and actionable insights beyond compliance. EY and SAP are targeting select clients whose risks and challenges are high-impact and may exemplify critical industry opportunities.

These clients will be co-innovators, industry leaders with the right mix of ambition and operational readiness, whose learnings can be scaled across the sector.

SI: We now realize that changing the environment is a global effort, so how do you hope to make this an inclusive initiative to support the cause?

SH: Sustainability is everybody’s business. We understand that combating climate change is not just a necessity, but a collective responsibility that is foundational to building a responsible and equitable world.

We’re committed to fostering a culture where sustainability is woven into the fabric of all business operations. This alliance enables organizations to track, measure and report on their ESG efforts with the same fidelity as financial performance. It’s about democratizing sustainability data – making it available, understandable and actionable. Having credible data-driven insights allows a variety of stakeholders to make better, more responsible decisions that drive sustainable outcomes.

SI: From this alliance, what capabilities/offerings can organizations use to encourage sustainable practice? Do you have any examples of organizations that have successfully implemented these technologies/updates?

SH: From the SAP Sustainability Control Tower to Responsible Design and Production, the offerings enable companies to move from passive reporting to active sustainability performance management. These tools allow for comprehensive ESG reporting, compliance with CSRD [the Corporate Sustainability Reporting Directive], CBAM [the Carbon Border Adjustment Mechanism] and capitalizing on tax incentives for sustainable practices.

We have organizations in EMEA and North America using these solutions, demonstrating that integrating sustainability deeply into business processes is both feasible and beneficial.

SI: What is the next step for EY and SAP’s alliance – how do both companies plan to help more organizations meet their sustainability targets?

SH: This alliance embodies the commitment of both organizations to deliver cutting-edge solutions that shape our clients’ net-zero journey, underpinned by audit-grade financing accounting. Through SAP’s advances in ESG solutions, such as the green ledger and EY’s focus on integrating these technologies into business transformation, we are ushering in the next frontier of embedding sustainability as a value driver in every facet of business transformation.

By setting and meeting our own sustainability targets, EY and SAP are leading by example with the ambition to inspire an actionable path forward for other organizations.

Beyond pledges and promises

The global collaboration between SAP and EY aims to enable clients to align carbon footprint and financial data for streamlined reporting and enhanced operational performance, as well as to navigate rapidly changing tax regulations and leverage incentive opportunities. The expanded alliance also has a focused go-to-market approach to help drive rapid adoption, and the impact this has on the SAP ecosystem will be worth keeping track of in 2024. Also interesting for Insiders is the alliance’s reach into more underexplored aspects of SAP’s offerings, such as the “green ledger” concept.

The EY/SAP collaboration is touted as supporting organizations by extending sustainability functionality into offerings tailored to specific needs, enhancing operational performance. Provisions include:

• The SAP Sustainability Control Tower solution. Leveraging expertise in sustainability, assurance and reporting, with a broader focus on supply chain, EY teams are working with SAP to define the capabilities needed for the next generation of sustainability solutions. EY solutions leveraging SAP Sustainability Control Tower help enable organizations to progress from Record to Report to Action, report against multiple regulatory frameworks and embed sustainability metrics in their internal performance management processes.
•  SAP S/4HANA Cloud transformation with sustainability at the core. EY teams and SAP are helping companies embed environmental considerations in business processes across finance, tax, supply chain, manufacturing and human resources as part of their digital transformation with SAP S/4HANA Cloud.
•  Carbon accounting and the green ledger concept. EY teams are bringing market-leading climate change consulting and carbon accounting experience to help realize the green ledger concept envisioned by SAP. Both organizations will collaborate with select clients to further develop the requirements and analytics needed to move greenhouse gas accounting from estimates to a more accurate reflection of a company’s footprint, allowing companies to manage GHG performance across the enterprise and accelerate climate action.
•  SAP’s Responsible Design and Production. The EY organization is providing real-time legal and regulatory updates on sustainability incentives, carbon regimes, environmental taxes and tax exemptions across the globe, to support SAP’s Responsible Design and Production solution.

Both companies plan to continue with go-to-market activity to support SAP S/4HANA, the RISE with SAP solution and the GROW with SAP solution with sustainability use cases and accelerators.

Steve Varley, EY global senior advisor, said on last year’s announcement: “Organizations need to shift from talking about pledges and promises to showcasing evidence of what they have achieved, actions taken and progress. Leveraging accurate and comparable sustainability data at the same level as financial data can help accomplish this.

“This expanded alliance will allow both EY and SAP to provide clients with services, capabilities and technology needed to create and protect value.”

Gunther Rothermel, co-general manager and chief product officer for SAP Sustainability, added: “Together, SAP and EY can achieve even greater market and planetary impact by working together on a joint sustainability ambition. Customers want the ability to track sustainability metrics the same way they do financial data and we’re focused on helping them do that. Leveraging our already strong collaboration, we will help customers advance their sustainability journey by embedding sustainability data into business processes and decisions.”