Explained: SAP's Green Ledger Supports Carbon Tracking
In a world increasingly driven towards sustainability, the importance of carbon accounting is equal to that of traditional financial accounting.
Global sustainability regulations are tightening and failure to comply is no trivial matter. It risks not only financial repercussions but also the trust of stakeholders and the broader reputation of a company.
SAP, a major player in enterprise software serving over 230 million cloud users, has stepped up with its SAP Green Ledger initiative, aiming to merge carbon accounting directly with financial systems.
SAP touts this new system as the most robust carbon accounting framework available worldwide.
“Enormous investments are required to abate CO₂ in order to curb global warming,” says Dominik Asam, CFO and member of the Executive Board of SAP.
“Besides smart, reliable regulation, accurate data on emissions along the supply chain is paramount to trigger the necessary investment.
“Only by moving from averages to actuals – audited at reasonable assurance – can freeriding and greenwashing be avoided, thereby protecting such valuable investment and our planet. SAP Green Ledger delivers precisely that.”
Understanding SAP's Green Ledger
The journey to reducing carbon emissions and tackling climate change requires solid tools.
Here, the SAP Green Ledger, building on the company's existing ERP and financial solutions used globally, stands out.
- Relate carbon footprints to their financial impact
- Support financial optimisation alongside lowering emissions
- Facilitate carbon budgeting
- Benchmark specific business units, profit centres and departments from both environmental and financial perspectives
- Prepare for sustainability audits
- Improve supplier-based processes to tackle Scope 3 emissions.
It enables businesses to seamlessly track and link their carbon footprints with financial impacts.
“This allows our customers to track and account for carbon footprints in relation to their financial impact,” explains Gunther Rothermel, Co-General Manager and Chief Product Officer for SAP Sustainability.
The genesis of the SAP Green Ledger
The birth of SAP's Green Ledger was supported by major consulting giants like Accenture, Deloitte, EY and Tata Consulting Services (TCS).
“As organisations seek to gain visibility into both the financial and environmental performance of their businesses, SAP Green Ledger can provide the sustainability metrics and insights needed to enhance decision-making that reduces emissions, drives efficiencies and optimises performance,” says Stephanie Jamison, Global Resources Industry Practice Chair and Global Sustainability Services Lead at Accenture.
“As a strategic co-innovation partner, Accenture helped shape the development of SAP Green Ledger and can apply our understanding of the technology and its capabilities to help our clients get the most for their organisation.”
SAP Green Ledger's development also saw crucial input from pilot customers like Covestro, assessing the solution early on.
Covestro is currently evaluating the linking of CO₂ values to the solution as they are generated during specific product manufacturing within the supply chain.
“SAP Green Ledger offers new levels of precision in carbon accounting for organisations as they track, manage and report their greenhouse gas emissions, and provides leaders with a holistic view of the costs and benefits of sustainability initiatives, enabling them to make data-driven decisions that can build business resilience,” says Jennifer Steinmann, Deloitte Global Sustainability Business Leader.
“Technology solutions can help generate traceable, bottom-up emissions data,” says Veronica Poole, Deloitte Global IFRS and Corporate Reporting Leader.
“Leveraging the robust governance and controls of enterprise systems is needed to help organizations achieve the rigor that enhances corporate accountability and enables a move to reasonable assurance.”
Vikram Karakoti, TCS Enterprise Solutions Global Head, says: “With our participation in SAP's Green Ledger pilot program, TCS is embracing innovative sustainability solutions to build a better future.
“This will enable organisations to move beyond regulatory compliance and make sustainability a growth engine.
“By embedding carbon data into the enterprise planning process, organisations can unlock previously unexplored areas for growth, transformation, and environmental renewal.”
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