If your company wants to find continued success down the road, sustainable operations and ethical standards need to fall at the top of the priority list…
Read on to learn how SAP Sustainability Control Tower functionality can help, as well as where our senior-level SAP consultants can fit in your organization.
What is ESG Reporting in Business?
Environmental, Social, and Governance (ESG) is used to describe a company’s corporate position and investment in sustainable and ethical behaviors, including those associated with sustainability of both SAP solutions and non-SAP systems within business units or across multiple different company locations.
ESG reporting is a type of public disclosure in which companies are required to share data concerning their environmental footprint, commitment to their social responsibility, and governance practices to ensure regulatory compliance.
ESG analysis not only provides enhanced visibility for socially-conscious stakeholders, but it also helps companies align core business processes with their sustainability objectives.
Main Components of ESG Reporting
1) Environmental Considerations
This area of sustainable business practices can not only help companies evaluate their current environmental risks, but also assess the ways in which such companies manage those risks and prepare themselves for a sustainable future.
Environmental considerations may include…
- Climate Change: Managing direct and indirect carbon emissions, reducing the carbon footprint of your product manufacturing processes, assessing your company’s financial environmental impact, and adapting to climate change vulnerability and change.
- Natural Resource Conservation: Combatting water stress and scarcity issues, maintaining compliance with Biodiversity and Land-Use regulations, and sourcing raw materials efficiently and sustainably.
- Pollution & Waste Management: Reducing toxic greenhouse gas emissions, leveraging more sustainable waste management practices, packaging raw materials and waste products in a more sustainable way, and eliminating electronic waste.
2) Social Responsibility
The social aspect of sustainable business practices involves the ways in which a company builds, manages, and maintains relationships with key stakeholders over time, including consistently meeting stakeholder expectations and offering feasible solutions to issues through accurate sustainability reporting.
Social monitoring involves the assessment of…
- Human Capital Management (HCM): Managing labor regulations and adhering to labor laws, assessing the health and safety of employees in the workplace, providing training and educational materials for Human Capital Development, and outlining consistent supply chain standards.
- Product Liability: Keeping track of products to ensure quality and safety standards are met, assessing the safety of chemicals and other hazardous materials in the workplace, maintaining financial product safety, and managing data privacy and security standards.
- Social Opportunity: Enabling access to communication and collaboration practices across the organization, improving financial visibility for stakeholders, and offering involvement opportunities in healthcare and nutrition companies and organizations.
3) Governance Monitoring
Governance practices are designed to ensure that a company not only acts in the best interest of its key stakeholders, but it also uses accurate and transparent accounting methods and pursues diversity and integrity when expanding their workforce.
Monitoring governance across business units involves…
- Corporate Governance: Accurately managing sustainability data across business units, monitoring accounting practices to meet sustainability targets, improving diversity and inclusion standards for Executive Board members, and providing a better balance between executive compensation and employee pay.
- Corporate Behavior: Managing business ethics and behavioral standards across the organization, instilling anti-competitive practices within groups and departments, limiting corruption by internal and external stakeholders, improving tax transparency, and reducing instability throughout the entire financial system.
Why is ESG Transparency Important?
Improved Organizational Visibility
By assessing core business processes through environmental, social, and governance standards, companies are enabled to derive actual ESG data from their operations to enhance transparency across business units and improve decision-making for key investors.
More transparent ESG information and better data quality also improves both the visibility and accessibility of important sustainability data and aids stakeholders in the evaluation of long-term investment risks based on a company’s current ESG management operations.
Support for Sustainable Business Progress
The disclosure of a company’s current sustainability practices and future sustainability goals outlines outlines and places emphasis on business processes intended to achieve net-zero emissions.
And, with better disclosure and more accurate data collection across your organization, leaders and other key stakeholders can gain a more comprehensive view of organizational sustainability, monitor progress towards a more sustainable future, take the necessary steps to reduce their footprint, and provide stronger support for sustainability plans in the future.
Enhanced Consumer Trust & Loyalty
ESG reporting requires companies to disclose information concerning their sustainability practices, meaning that if a company is not adhering to ethical standards or sustainability requirements, their consumers would know.
The disclosure of sustainability data not only helps companies demonstrate their commitment to ethical and sustainable business practices, but it also improves consumer trust and enhances brand loyalty across the entire customer base.
Optimizing Sustainability Performance with SAP
The SAP Sustainability Control Tower helps companies automate data collection processes for key sustainability data, steer leaders towards better decisions by reporting ESG performance metrics, and ensure compliance with sustainability regulations and ethical standards.
SAP Sustainability Control is designed to help companies build a more sustainable future by addressing climate control actions for zero emissions, circular economic practices for zero waste, and improved social responsibility for zero inequality.
Sustainability reporting and holistic steering capabilities are available for SAP customers across a wide range of companies and industries, including…
- Discrete industries: Industrial manufacturing, automotive production, high tech, aerospace engineering, and security and defense
- Energy and natural resources: Oil, gas, nuclear energy, mill products, utilities
- Consumer industries: Consumer product manufacturing, retail, fashion engineering and production, wholesale distribution, life sciences
- Service industries: Telecommunications, media, sports broadcasting, entertainment, engineering, construction, passenger travel
- Financial services: Accounting, banking, insurance
- Public services: Government, public sector, healthcare, security
By assessing holistic reporting information, ESG metrics, and transparent sustainability data, companies can identify risks and opportunities in their own sustainability performance and assess key environmental and social impacts with every decision made across the board.
Key Features of SAP Sustainability Control
1) Data Sourcing
- Simplify integrations between SAP Control Tower and other SAP data sources (i.e., SAP S/4HANA, SAP Business Warehouse, etc,) to improve the visibility and value of data from any source
- Consolidate and combine data from segmented sources in a single solution
- Leverage data validation functionality to improve the accuracy and reliability of data and safety of data auditing capabilities
2) Management of Key Metrics
- Leverage pre-defined data models to support ESG frameworks and customer-specific applications (i.e., GRI, TCFD, SASB, etc.)
- Perform more accurate data calculations to improve the quality of ESG metrics
- Enrich and allocate data across business units (i.e., Finance, Human Resources, etc.) through aggregation and disaggregation processes
3) Insight into Performance
- Visualize data through enhanced GHG protocols and data management best practices
- Create custom dashboards to gain more comprehensive insight into sustainability targets
- Assess business operations and sustainability performance to find patterns and forecast future plans for sustainability
4) Flexible & Agile Solutions
- Leverage granular target setting to outline and define long-term sustainability goals
- Compare sustainability performance against projected targets to assess progress
- Assess performance across business unites to drive action towards more sustainable goals, initiatives, and operations
How Does the SAP Sustainability Control Tower Help?
While the SAP Sustainability Control Tower provides a wide range of features and capabilities to help companies reduce their footprint and improve sustainability across business units, there are a few key areas of functionality that establish and streamline ESG reporting.
Let’s take a closer look at each one…
Recording
- Streamline data integration and management through automated data entry functionality and pre-built APIs and file reports
- Improve data integrity and quality across your sustainability solutions
- Uses pre-built data models to calculate and record more accurate sustainability KPIs
Reporting
- Leverage integrated data foundations to understand sustainability performance in relation to other areas of the organization (i.e., HR, Finance, etc.)
- Map report metrics to multiple ESG standards (i.e., EU Taxonomy, Global Reporting Initiative (GRI), etc.)
- Showcase performance to sustainability executives and leaders across business units, specialized departments, and company locations
Action
- Align performance reporting standards and practices with ESG indicators to make more sustainable and ethical decisions in the future
- Set actionable sustainability targets to monitor and improve progress in the long run
- Leverage sustainability metrics to can more comprehensive insight into key business processes and improve future forecasting and decision-making
Main Advantages for Your Organization
- Build resilience and long-term value for sustainable operations across your organization
- Attract and retain investors to achieve a higher return on investment (ROI)
- Embed sustainability metrics and standards into business strategies to establish auditable ESG reporting requirements and help stakeholders make more informed decisions
- Outline digital transformation initiatives to support sustainability management and improve data transparency
- Leverage automated reports to save time and reduce errors
How Can We Help?
Whether you need help leveraging SAP Data Warehouse Cloud integrations to manage disclosure and improve sustainability reporting accuracy, additional support monitoring sustainability solution management processes across business units, or an extra hand implementing a robust and auditable ESG solution, Surety Systems is here to help.
Our team of senior-level SAP consultants has the technical skills, functional expertise, and real-world experience needed to handle even your most complex ESG reporting and monitoring projects without ever skipping a beat.
Your company. Your priorities. Our expertise. That’s the name of the game with Surety.
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