Adding a Green Dimension to the Top and Bottom Lines

Jan Gilg is not the only person struggling to explain to his children what we are doing to our planet, but he is one person who can make a real difference and lead others to do the same. As president of SAP S/4HANA, Gilg is responsible for SAP’s flagship products in industry solutions, enterprise resource planning (ERP), and digital supply chain.

“My role empowers me to make things happen,” the executive, who views himself as a change agent in a powerful position, says. If you consider that 70 percent of world transactions touch an SAP system in some way, it is clear that SAP software has a huge influence on the global economy. With that power comes responsibility.

“We need to have ambitious goals, because the challenges we face are immense,” Gilg says. “There is a huge demand to rethink how we live and work. We must become sustainable to survive.”

This mindset is critical for Gilg, who is also a member of SAP’s Sustainability Council. Members are nominated by the SAP Executive Board and are responsible for integrating sustainability into their core business area. Gilg’s role is to weave sustainability into the product portfolio.

Software Solves Problems 

Business leaders know that digital transformation is not the latest industry catchphrase. It is a movement, a significant shift in how companies operate, compete, and grow.  The goal is to use technology to be more efficient, effective, and sustainable.

The coronavirus crisis has forced enterprises to realize how much work they still need to do in order to become digital. They now see the disconnect — what worked in a non-crisis mode was disrupted by the pandemic, uncovering broken processes. As a result, many companies are accelerating their digital projects.

Gilg points out SAP’s unique advantages. First, SAP software is essential for all enterprise functions, from manufacturing, shipping, and delivering products to managing finances and human resources. Second, SAP understands that the world works through networks. Networks provide visibility into trading, ethical business practices, logistics, and inventories. SAP already owns the largest B2B procurement network with Ariba Network. SAP has also invested in the SAP Logistics Business Network and SAP Asset Intelligence Network, and is now about to bring all those assets together to create a more simplified and unified networking experience.

New Dimension

As the company’s flagship product, SAP S/4HANA is a suite of business applications built to enable enterprises to run better. It already addresses two key dimensions: the top line and the bottom line.

“We decided to add a green line,” Gilg explains. “Adding the ecological angle provides transparency into the use of natural resources, available alternatives, suppliers, and transportation. Bringing the three dimensions together enables better corporate decision making.”

This philosophy all comes together in the Climate 21 initiative.  Embedding sustainability as a new dimension of success into analytical and transactional applications allows ERP and intelligent enterprise systems from SAP to optimize the resources not only of an individual enterprise but across value chains — for the entire product life cycle.

This means that ERP is becoming a game-changer once again, and can help enterprises achieve their sustainability objectives and their commitments to the Unite Nations Sustainable Development Goals (UN SDGs).

“We’ve reached the end of the linear economy,” says Gilg. “We’re seeing the emergence of a circular model that has clear economic and environmental benefits. The waste of the past decades is not acceptable. We need software that addresses an end-to-end approach in all dimensions.”

Decade of Delivery 

The need for urgent action has never been greater. Human-induced climate change is already impacting our daily lives, but we keep burning fossil fuels, cutting vast amounts of forests, and depleting nature’s stocks. The scientific data is overwhelming, yet once again the world has failed to meet a single target to stop the destruction of nature according to a recent UN report .

Gilg sees a tremendous opportunity for SAP: “The goal of Climate 21 is to help customers understand and minimize the greenhouse gas (GHG) footprint of their products and operations along their value chains.”

To make it easier for enterprises to do that, SAP developed the SAP Product Carbon Footprint Analytics application, a carbon emissions accounting system. Aside from helping companies to reduce their own carbon footprints, sharing data with stakeholders can give enterprises a competitive advantage and accelerate their journey to a low-carbon economy. In terms of future innovation, Gilg envisions a sustainability ledger that supports multiple attributes and impacts of products and services, including energy, plastic, toxic ingredients, water, biodiversity, or land use.

Another climate-focused development is the Plastics Cloud, a new marketplace to expand the trade of recycled plastics and plastic alternatives.

Signs of Progress

While the need for even more action is crucial, there are signs of positive change. Customers are using SAP software for environmental and commercial success. Doehler was the first customer to implement SAP Product Carbon Footprint Analytics, and Swiss retail giant COOP is using unified demand forecast to support its journey to zero waste, enabling them to increase market share despite the crisis.

One of Gilg’s favorite success stories is Queen of Raw, a textile marketplace startup  in New York using a textile sustainability application based on SAP S/4HANA. “Waste is a significant problem for the textile industry,” says Gilg, “making it a perfect target for sustainability efforts.”

Each year around $120 billion worth of textiles from across the supply chain goes to waste, causing huge environmental issues and economic loss. For some companies, it swallows up to 15 percent of their bottom line annually. Queen of Raw matches suppliers with unused textiles to potential buyers. The company worked with SAP to develop an easy-to-use automated process on a powerful back-end system.

This sustainability app uses tools like blockchain and machine learning to identify products, confirm the integrity of the suppliers, and match them to Queen of Raw’s 175,000 global users. The system also provides an environmental cost-benefit analysis when a successful match is made.

“Queen of Raw isn’t just doing good for the sake of good. It makes economic sense,” Gilg says. “With tools like this we can show people the return on investment and the value of the circular economics.”

Gilg says it’s not enough to tell our children we must protect the sea we swim in and the trees around us. We must show them that we are making a difference. “It’s up to us to decide what kind of a difference we make. That’s why I’m proud to tell them that I am a part of a company that looks out for the world they will live in.”


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