SAP takes steps toward ‘green ledger’ for carbon accounting

SAP wants to give new meaning to the resources in enterprise resource planning, going beyond the boundaries of the enterprise and accounting for its impact on the whole planet.

The software provider plans to do that by enhancing existing tools for estimating greenhouse gas emissions due to an enterprise’s activities, and adding capabilities for exchanging that data with partners, bringing it all together in a “green ledger” that will record the climate cost of doing business alongside the financial cost.

SAP’s goal is to provide businesses with the accounting tools they need to decarbonize their supply chains — an initiative of greater interest of late to organizations seeking to improve ESG (environmental, social, and governance) strategies.

To help businesses calculate their climate impact, SAP is expanding the capabilities of the Sustainability Footprint Management tool in S/4HANA Cloud, and adding new tools to enable enterprises to exchange detailed greenhouse gas emissions data with their partners in a common format.

“CEOs, CTOs, and CIOs are now under increasing pressure by shareholders, by regulators, by consumers, and increasingly also by suppliers to increase the accuracy and transparency of their carbon emissions data within the organization and more broadly across the supply chain,” said Michael McComb, global head of sustainability communications for SAP.

Companies can already calculate the carbon intensity of their products to some extent, working with estimates for the average carbon emissions of various materials and processes — but this does not take into account day-to-day variations due to the quality and origin of inputs, transport, the weather, or the efforts they or their suppliers have made to improve processes.