With countries pushing the industry to track its carbon footprint to the last mile, SaaS player SAP has launched a solution that can do just that.
When un secretary-general António Guterres warned “We are on a highway to climate hell with our foot still on the accelerator,” he wasn’t indulging in hyperbole. Although organisations have started to become mindful of their carbon footprint, a report from Rocky Mountain Institute states that the average company’s supply-chain greenhouse gas (GHG) emissions are 5.5x higher than the direct emissions from its assets and operations. Even countries are working to create regulations that require businesses to track their carbon footprint to the last milligram.
In this backdrop, even software firms are creating systems that can help track their supply chain’s GHG emissions transparently and auditable. For instance, software-as-a-service firm SAP has designed Green Ledger that allows businesses to manage their operations in a sustainable manner with bottoms-up transactional emissions data, rather than estimates. “The Green Ledger gives you the accounting equivalent of your emissions balance sheet. It is doing the same for emissions [data] as enterprise resource planning (ERP) has been doing for financials for many years,” says Paul Marriott, President of SAP Asia Pacific Japan.
This would enable companies to manage the carbon that enters and leaves their systems as they balance profits and losses. With over 400,000 enterprise customers using SAP’s software across the globe, the Ledger can be included as an add-on to its ERP solution S4/HANA Cloud, and allocate carbon emissions weightage to financial transactions. But it requires data of the carbon footprint of products to provide accurate, actionable data for decision-making.
This article originally appeared in Business Today on June 08, 2023.