Decarbonizing Industry Value Chains Is a Team Effort

The war in Ukraine has sent a resounding wake-up call to recognize the geopolitical and geo-economic dimensions of Europe’s dependency on cheap and abundant energy. That fossil fuel energy has been conveniently flowing through a spider web of pipelines, being used, and creating greenhouse gases that are rapidly accumulating in the atmosphere.

The solution is as easy to propose as it is difficult to implement: transform our energy system. To achieve this goal, we need a systemic approach, a collective effort of major players across all industries.

SAP is working with the largest companies around the world to contribute digital solutions that enable the decarbonization of entire value chains from raw energy and materials to retail shelves. What motivates me? I believe the race to zero emissions is about bringing the right players together and shaping an economy that drives innovative products, business processes, and business models.

Even as we look to rapidly reduce society’s reliance on fossil fuels, we cannot overlook the need for reliable energy sources to power and heat our homes, move about in our daily lives, and sustain the production of vital modern materials like cement, plastics, and steel. But the transition is happening, and we’ve made it SAP’s mission to accelerate the decarbonization of our energy system with intelligent digital solutions.

Shell is one of the global energy companies that is transforming to lead the way to a sustainable and resilient energy system. SAP has been providing digital solutions for Shell’s business for many years, and we are expanding our cooperation to work on solutions to motivate and accelerate the journey to decarbonize our economy.

No business can survive without robust cost accounting and controlling, and SAP has been establishing and implementing best cost controlling practices and standards for decades. In the future, no business will be able to survive encounters with regulators, investors, and customers without an equally robust accounting of sustainability-related metrics, including greenhouse gas emissions. All companies need to understand the greenhouse gas footprint of their inputs, what they add in their operations, and what the resulting total is. So, all companies who have committed to net zero need a way to measure and reduce their emissions.

Shell and SAP intend to co-innovate on greenhouse gas emissions accounting solutions and supply chain management practices so all players along value chains can measure and reduce their greenhouse gas footprint. Driving this transformation from the energy supply side creates the necessary transparency on the demand side — all the way to consumers like you and me.

We also believe that sustainability metrics need to be embedded in the transactional end-to-end processes along value chains and across industry boundaries. Only this integration allows business leaders to consider the sustainable business impact of product design, sourcing and procurement, production, logistics, and sales. Innovative solutions based on industry standards will be important energy transformation tools.

Shell has been a founding member of the Open Footprint Forum and we are working together to create a common model for footprint-related data covering all emission types, consumption, and base calculations to normalize and aggregate industry data.

Our efforts to establish standards that enable the energy transformation of entire industries become even more tangible if Shell and SAP provide a good example ourselves as companies operating to a new energy economy.

SAP will support Shell’s Powering Progress strategy to accelerate the transition of Shell’s business to net-zero emissions. Shell intends to collaborate with SAP on carbon accounting and management solutions. These SAP solutions will help Shell track emissions and carbon budgets across their operational areas. This enhanced visibility supports better planning and day-to-day operational decision making.

SAP has promised to be carbon-neutral in our own operations by 2023 – and to be net zero along our entire value chain by 2030. Shell will help SAP transition to an emission-free car fleet. Shell’s Accelerate to Zero program will help with this mobility transition, including providing charge cards and charge-at-home infrastructure starting in the Netherlands. In Germany, we intend to put a mutually beneficial THG agreement in place and a program to incentivize German company car drivers. Shell also is supporting SAP to decarbonize our energy usage, starting with building soccer field-sized solar panel installations for SAP headquarters in Walldorf, Germany.

These joint activities enable the transition to a sustainable energy system and serve as high-visibility projects. They will snowball along more industry value chains. Shell’s experience in planning and operating large-scale infrastructure projects and SAP’s experience in managing and optimizing business processes is a winning combination.

“This partnership is a great example of our commitment to SAP and to our customers to accelerate the energy transition,” said Audny Van Helden, vice-president, Energy Marketing Sectors and Decarbonization, Shell Plc. “Our shared technology and industry expertise will help companies make more sustainable decisions.”

I couldn’t agree more.


Peter Maier is president of Industries and Customer Advisory at SAP SE.