Disrupting Business Models to Protect Our Most Valuable Asset: The Planet

The converging issues of climate change and the rapid proliferation of plastic and other waste have raised alarms around the world. Economies, ecosystems, and human health are increasingly impacted. Sustainability is one of the most pressing issues of our time.

In response, governments, investors, and citizens are putting pressure on companies to recognize and act on these issues. These systemic threats harbor enormous opportunity if we work together.

Today, SAP and global strategic consultancy BCG announced a partnership to help companies transform their business models, become sustainable enterprises, and gain the data transparency they need to embed sustainability into their core business.

The SAP and BCG partnership combines SAP’s strength as the leading enterprise software company with BCG’s proven expertise in advising clients on their sustainability transformation strategies.

Close to 90% of BCG’s businesses run SAP and they can benefit from the partnership that enables companies to plan, execute, measure, and report on sustainability initiatives across their value chains. Adding to the strength of this partnership, SAP continues to bring new capabilities and embed sustainability into existing solutions to address climate action, circular economy, governance, and environmental, social, and governance (ESG) reporting.

Three unique features define this partnership. First, it is an integrated offering that goes from outlining a sustainable strategy to adopting technology solutions with holistic impact. Companies can address key sustainability drivers with scalable technology, and business leaders can help ensure a successful digital transformation. Second, the SAP and BCG partnership brings two powerful global ecosystems together to accelerate transformation with the urgency required to meet ambitious targets. Third, SAP and BCG are combining their intellectual properties and bringing capabilities and services together around targets related to zero emissions, zero waste, and ESG reporting. These new offerings will be incorporated into SAP Cloud for Sustainable Enterprises

Zero Emissions

The European Commission recently adopted a proposal for a new Carbon Border Adjustment Mechanism (CBAM), which will apply the concept of carbon pricing to all imports by 2026. The SAP and BCG collaboration allows companies to analyze their carbon footprint based on SAP data and determine which initiatives can best reduce emissions. BCG’s digital solution CO2 AI supports the overall sustainability transformation offering by combining BCG’s insights and SAP data from the SAP Product Footprint Management solution.

SAP Product Footprint Management offers businesses a blueprint to integrate data into businesses processes. Likewise, the solution enables mutual customers to manage life-cycle assessment data to calculate footprints across the entire product inventory. Both capabilities ease the complexity of carbon tracking and accounting across scope 1, 2, and 3.  The benefits range from complying with ESG requirements from investors and regulators, and potentially reducing carbon emissions by 30 to 40%.

Zero Waste

Today, 100 billion tons of material resources are used each year — of which, less than 9% is recycled or reused.  Zero waste is becoming a strategic imperative among business leaders, driven by stakeholder pressures and emerging regulations

Legislation is being implemented across the globe to address this challenge: 170 nations have pledged to significantly reduce their waste by 2030.  Key policies developed by the EU encourage immediate action on packaging and plastics such as the EU Plastics Strategy.  In addition, there is increasing focus on packaging regulations, including extended producer responsibility (EPR) schemes and upcoming plastic taxes based on a “polluter pays” principle. As one of the most widely supported policy mechanisms, these regulations act as a key driver for reducing consumption and increasing the circular use of materials. China, Canada, the U.S., and India are among the countries that have committed to develop solutions that can help companies to transition to circular business models.

Current business models fail to consider the legislative and geographic complexity of the circular economic model — companies pay fees per volume of plastic, plastic and waste management must report data, and governments use this data to define policies and fees. SAP Responsible and Design Production and BCG’s CIRCelligence can address some of the gaps, including the lack of dynamic tracking and insights for EPR fees, as well as assess tax implications per market and oversee the manual data collection or estimation of materials volume by market or product.

Together, SAP and BCG can provide customers with the data transparency their companies require.

ESG Reporting

With the increasing number of ESG reporting requirements, more companies pursue goals of zero emissions and zero waste. The SAP and BCG partnership aims to combine two existing solutions — BCG’s ESG Risk and Compliance Framework and SAP Sustainability Control Tower — in order to allow customers to take actions on embedding risks and compliance procedures into their organization processes based on real-time financial and non-financial ESG data.

SAP CEO Christian Klein and BCG CEO Christoph Schweizer see sustainability as a unique opportunity to join forces not only for the good of their companies, but also to make a significant contribution to solving the global sustainability challenge.

“Being sustainable requires coordination across the value chain, and this is where SAP’s partnership with BCG plays a key role,” Klein said. “Bringing together BCG’s expertise, tools, and services with SAP’s technology gives companies the transparency, actionable data, and strategic guidance they need to successfully tackle end-to-end sustainability and create value for all its stakeholders.”

The SAP and BCG sustainability transformation offering is in pilot phase, with an expected broader launch in the third quarter of 2022.

To learn more, visit sap.com/bcg