system transformation

SAP Sustainability Control Tower: Integrating A Suite of Technologies to Enhance ESG Reporting

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Key Takeaways

⇨ ESG reporting is the proof of an enterprise’s fulfilment of social goals

⇨ SAP Sustainability Control Tower is the backbone of ESG reporting for enterprises

⇨ A suite of integrated technologies enhances the value proposition of SAP SCT

The reporting requirements for corporates have increased by leaps and bounds as the focus heightens on ESG targets. For monitoring, tracking, and reporting, critical data needs to be organized and converted into meaningful information. More importantly, it is about accurate reporting in a timely manner and at an optimal cost.

The three Ps – Profit, Planet, and People are no longer mutually exclusive for corporates and multinational companies. The financial, environmental, and social aspects of a business should function without sacrificing each other to ensure the future is sustainable for all stakeholders.

It’s a truism that organizations that have better visibility into all key factors affecting their business can move faster than their competition. For many years, it was sufficient to keep an eye on all the financial aspects of the business. However, the heightened focus on ESG by multiple stakeholders has triggered the need to institute relevant technologies to collate, monitor, and report ESG related key performance indicators (KPI).

SAP Enabling Sustainability 

In the above backdrop, SAP has also been steadily augmenting its sustainability solutions portfolio.  Indeed, managing the green-line (sustainable revenues and profits) is as important as the top-line (revenues) and bottom-line (profits).

Currently, the SAP Sustainability Control Tower (SAP SCT) is live for various customers across the globe. The cloud-based solution simplifies holistic steering and reporting of sustainability-related performance management. The SAP SCT leverages the SAP Business Technology Platform (SAP BTP) to integrate various data sources to derive sustainability-related insights along established reporting and accounting standards.

Reporting on sustainability revolves around data. Companies continue to grapple with critical components of reporting such as: source, granularity, frequency, accuracy, and timeliness of collating, aggregating and eventually reporting. As a perfect foil to meet industry requirements, SAP SCT leverages SAP BTP to fulfil the growing reporting needs of diverse companies by natively integrating these systems.

Value Proposition of SAP SCT

The SAP SCT enables companies to get a customized overview of the varied ESG KPIs. More importantly, SAP SCT allows SAP customers to compare actuals against company-specific targets and steer the company towards their sustainability goals.

Further, it supports the creation of external stakeholder disclosures – be it voluntary or mandatory. The voluntary disclosures come in the form of sustainability standards and frameworks, such as World Economic Forum (WEF) framework, the Task Force on Climate-Related Financial Disclosures (TFCD), the Global Reporting Initiative (GRI) standard, and the like. The mandatory ones include the European Union (EU) Taxonomy and the proposed U.S. Security and Exchange Commission (SEC) rules that require emissions data to be included in 10-K reports.

The unique proposition of SAP SCT is that it automates data collection from various SAP and non-SAP systems and eventually provides a holistic overview. The SAP SCT comes with pre-built data models. Also, as SAP SCT is powered by diverse platforms such as SAP BTP, SAP Data Warehouse Cloud, and SAP Analytics Cloud (SAC), it is possible to add additional data sources and derive additional metrics without writing a code aka the no-code process. In addition, built-in functionalities like the forecasting, drill-down, and what-if scenarios of SAC can be used to make predictions for changes in the future. In addition, audit trail has been embedded to enable corroboration prior to executive attestation. All these features provide flexibility and agility not only to SAP, but also to its partners and customers.

Growing Vitality of SAP SCT 

Traditionally, ESG needs were mainly around the creation of yearly and voluntary disclosures based on various standards, which SAP SCT anyway fulfills. However, with the growing trend of ESG reporting becoming increasingly mandatory, the needs of companies in diverse sectors are equally rising. SAP SCT’s vitality has been growing as it goes beyond boundaries and provides an actual view of the ESG metrics for all stakeholders. This feature enhances the unique value proposition of SAP SCT. Further, the output reports infuse confidence in the quality of information. Likewise, the visualization features facilitate the areas to focus on for necessary executive action.

To quote two examples, SAP SCT offers companies to embed additional sustainability solutions: (1) For instance, when companies plan business-related trips, they can now choose airlines not just by price, but also by carbon impact. (2) Similarly, procurement solutions allow vendors to be selected not only based on price, quality, and availability, but also on the environmental impact associated with the purchase.

SAP SCT – Way to Go

The proactive developments integrated into SAP SCT enable enterprises to fulfil the rapidly rising needs of monitoring and reporting ESG status. In the 2023 roadmap, the revamp of SAP SCT will enable companies to derive actual ESG data rather than estimates. Further the SaaS delivery platform would lower total cost of ownership and increase speed-to-market, thereby enabling companies to derive the full potential of the integrated SAP offerings.

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