SAP Sustainability Goals Powered by S/4HANA Solutions

Sustainability investment growth is expected to continue to increase at an average of 5.7% over the next 3 years.

Research comparing companies with consistently high Environmental, Social, and Governance (ESG) performance to those with low ESG performance from 2013 to 2019 found that high ESG performers achieved operating margins 4.7 times higher and faced less volatility.

Focusing on SAP sustainability benefits both the environment and a company’s competitive position. With increasing environmental awareness, businesses are being called upon to reduce their carbon footprints, adopt eco-friendly practices, and contribute to a more sustainable future. SAP S/4HANA, SAP’s next-generation ERP solution, has emerged as a powerful tool to help organizations embed sustainability into their core operations, enabling transparency, accountability, and optimized resource usage.

How SAP S/4HANA Supports Sustainable Business Goals

SAP S/4HANA offers integrated tools and insights that enable organizations to track, report, and improve their environmental and social impact. Built to support Environmental, Social, and Governance (ESG) initiatives, S/4HANA’s capabilities allow organizations to manage resources efficiently, monitor supplier compliance, and track emissions in real-time. With its streamlined structure, unified database, real-time data capabilities, and cloud-optimized design, SAP sustainability has the potential to be a true game changer in advancing sustainable business goals.

1. Managing the sustainability of the supply chain

Achieving sustainability goals is a complex challenge for organizations, especially with regulations from the European Union mandating the tracking of carbon emissions across their supply chains. Companies must account for their emissions, and their direct suppliers, and soon the emissions prevented by changing practices. SAP’s S/4HANA includes applications like the Product Footprint Management Tool, which calculates a product’s carbon footprint throughout its lifecycle. This tool allows businesses with sustainability goals to log emissions and generate real-time reports within the same ERP system, simplifying the management of supply chain responsibilities.

2. Migration to the cloud

Every business relies on various systems and processes like financial accounting, purchasing, payroll, and compliance to function effectively. While many companies have embraced cloud software, not all utilize it fully. Traditionally, different functions were managed on separate applications, hindering efficiency. S/4HANA offers full integration for all business systems on the cloud. Research indicates that cloud migration can significantly reduce CO2 emissions—by 59 million tons annually, equivalent to removing 22 million cars from the road. As cloud applications become easier to use, businesses are more likely to adopt them. S/4HANA provides efficiency and sustainability benefits as a comprehensive cloud solution.

3. Sharing real-time data

To make environmentally conscious and growth-driven decisions, businesses need accurate data from all departments. S/4HANA’s integrated database enables real-time data reporting and sharing. The real-time aspect of S/4HANA’s analytics means that companies can respond immediately to emerging issues and trends, creating a proactive approach to sustainability This control allows evidence-based decisions regarding purchasing, stock, supplies, and consumer behavior, giving companies the agility to thrive.

For instance, overproduction harms both the environment and company finances. By utilizing real-time data on stock and consumer behavior, businesses can predict future trends and respond quickly to demand fluctuations, significantly reducing waste. Improved data sharing enhances overall workflow.

Functionalities Within SAP S/4HANA for Sustainability

Sustainable Procurement: With SAP S/4HANA, companies can prioritize suppliers who meet sustainable criteria, monitor compliance, and track the environmental impact of their entire supply chain. This functionality enables businesses to make informed choices and promote sustainability throughout their supplier network.

Product Lifecycle Management (PLM): PLM within SAP S/4HANA helps companies manage the full lifecycle of products, from design to end-of-life. By focusing on resource efficiency and sustainability during the product design phase, organizations can reduce waste and improve recyclability, supporting a circular economy.

Energy and Emissions Tracking: SAP S/4HANA allows businesses to monitor and measure energy consumption, emissions, and waste generation. These insights enable companies to set reduction targets and track progress in real time, ensuring alignment with sustainability goals and regulatory standards.

Sustainable Finance and Reporting: Finance modules in SAP S/4HANA support green financing, ESG investments, and transparent reporting. Companies can manage investments in sustainable projects and easily generate reports that demonstrate compliance with environmental standards to stakeholders.

Success Stories with SAP S/4HANA

A manufacturing giant used SAP S/4HANA’s PLM and emissions tracking tools to reduce waste and optimize energy usage. Within one year, they reported a 15% reduction in carbon emissions and a 20% improvement in waste recycling rates, all while maintaining high production standards.
A retail business leveraged SAP S/4HANA’s sustainable procurement features to source eco-friendly materials and monitor supplier compliance. As a result, they minimized supply chain emissions by 10% and enhanced supplier transparency, leading to greater trust among consumers.

Implement Sustainability in Your Organization

Define Sustainability Goals: Set clear goals, such as reducing carbon emissions, improving energy efficiency, or enhancing supplier transparency. Ensure these align with your organization’s broader mission.
Leverage Customizable Dashboards: Use SAP S/4HANA’s dashboards to set up KPIs that track your sustainability goals. These should be visible to key stakeholders for accountability and engagement.
Build a Culture of Sustainability: Embed sustainability into your company culture by training employees and encouraging environmentally responsible practices. SAP S/4HANA’s user-friendly interface makes it easy for all departments to get involved.

Achieve Your Sustainability Targets with SAP S/4HANA

Consumers increasingly favor brands committed to sustainability. SAP S/4HANA helps companies communicate their efforts clearly through data-backed reports and dashboards. From procurement to product lifecycle management and energy tracking, SAP S/4HANA provides the tools to measure, manage, and enhance environmental impact. By leveraging these capabilities, businesses can contribute to a more sustainable future while achieving cost savings and enhancing brand reputation.

Are you ready to make the leap? Rialtes’s vast experience and advanced technical knowledge in SAP technology help you move forward confidently and make your transition to SAP S/4HANA seamless. Having built a close partnership with SAP, we are well-positioned as partners to support companies with their migration to S/4HANA. Contact us today at 𝘀𝗮𝗹𝗲𝘀@𝗿𝗶𝗮𝗹𝘁𝗲𝘀.𝗰𝗼𝗺