Is your energy organisation on track to hit net zero targets?

Mar 01, 2024
  • IT
  • finance
  • utilities
  • SAP

In the quest for global sustainability, organisations must take bold steps to reduce carbon emissions. The UK Government's recent legislation mandates detailed carbon reduction plans...

...emphasising the critical role of businesses in this endeavor. 

Amidst this, SAP's Green Ledger approach, powered by S/4HANA Cloud and Sustainability Footprint Manager, emerges as a pivotal solution. By seamlessly integrating financial and carbon accounting, it provides unparalleled visibility into environmental costs, empowering businesses to make informed, sustainable decisions and meet emissions targets head-on. 

To combat climate change, several countries have pledged to achieve sustainability targets to contribute to bringing global energy-related carbon dioxide emissions to net zero by 2050.

As part of this, the UK Government introduced legislation last year requiring all financial institutions and companies with shares listed on the London Stock Exchange to publish detailed plans for how they intend to hit carbon reduction targets.

Such carbon reduction is not only vital for complying with legislation, but will help businesses gain and retain the backing of investors and customers alike.

Though all industries have a part to play in reducing carbon emissions, the energy sector in particular finds itself under the microscope, as oil and gas operations account for around a staggering 15% of total energy-related emissions globally, according to the International Energy Agency.

Responsible for around 5.1 billion tonnes of greenhouse gas emissions, energy organisations must rectify this problem by halving the emissions intensity of oil and gas operations globally by 2030 – or fall behind on net zero targets.

To achieve this, energy companies must, as a crucial starting point, have full visibility of their current carbon footprint. After all, how can a reduction in emissions be tracked without knowing the initial metrics?

Addressing the data challenge 

Unfortunately, as many businesses handle their day-to-day operations from disparate solutions, siloed data, and outdated processes, they struggle to track the required metrics effectively – hindering their ability to report on and action them. In fact, 30-40% of companies today estimate that their carbon emissions data is not accurate.

Furthermore, without this data visibility, business leaders find themselves making decisions without considering environmental costs, blocking financial optimisation.

Several companies are already successfully meeting their obligations of emissions monitoring without their users even knowing, but for those unsure where to begin, we believe SAP's Green Ledger approach is a great starting point. 

We will see the accurate and timely exchange of data, essentially producing the bones of a carbon invoicing ecosystem, becoming more and more important throughout technology in the coming years.
Richard Evans, Head of Solutions and Innovation, Delaware

Building the foundations for sustainable decision-making  

SAP’s green ledger is an approach that aims to make environmental considerations a central part of company-wide decision-making, seamlessly connecting finance with operations. It provides transactional carbon accounting that’s as easy as financial reporting by transitioning from aggregated averages of emissions values to transactional actuals and verified data. With enhanced visibility of environmental costs, businesses can avoid the consequences faced when making decisions that don’t consider environmental impact.  

Driving company-wide accountability

Combining the power of two solutions; SAP S/4HANA Cloud, and SAP Sustainability Footprint Manager, the green ledger initiative unites financial and carbon accounting, putting you in the driver’s seat to tackle emissions targets head-on.

SAP S/4HANA Cloud, a software-as-a-service (SaaS) ERP, is at the heart of the green ledger approach. You can’t manage what you don’t measure, which is why SAP S/4HANA Cloud offers comprehensive emissions measurements, a flexible and auditable emissions calculator, and real-time analytical tools for ESG reporting. What’s more, the solution enables root cause analysis by syncing emissions data with relevant business transactions, whilst empowering businesses to deep dive into related financial data.

Implement strategic carbon management

Meanwhile, the SAP Footprint Manager enables businesses to calculate and manage both their corporate footprint and carbon footprint, managing the full range of corporate, value chain, and product-level greenhouse gas emissions. The solution manages this data at a highly granular activity level, to improve the speed, accuracy, and efficiency of emissions management.  What’s more, businesses can be confident that with SAP Footprint Manager, they can continue to adhere to and report against rapidly changing standards.

Combined, this powerful duo presents decision-makers with complete visibility into their sustainability footprint and associated environmental costs, so they can confidently record, report, and act against carbon emissions targets whilst optimising their bottom line. 

With full visibility across the value chain, businesses can pinpoint exactly where their emissions are occurring, set reductions targets and identify specific areas for decarbonisation impact.

Mapping the value-chain for success

With full visibility across the value chain, businesses can pinpoint exactly where their emissions are occurring, set reductions targets and identify specific areas for decarbonisation impact.

Furthermore, automating emissions data and connecting it with financial data to provide responsible products and services not only ensures compliance with net zero targets, but helps retain consumer trust and loyalty as the world embraces a new generation of environmentally conscious clients.

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