Issue

Determine to what extent SAP tools can manage the business and system process to cover scope of AS IS third party applications (TPAs) for Sustainability. May require creation of further KDDs to cover specific TPAs.

Recommendation

Harmonise current ESG landscape.

Background & Context

ESG Landscape As Is

SAP Applications to upgrade:

• BW Cerise (CO2 Energy Report Improvement Software Efficiency) - Automatic reporting of GHG (greenhouse gases) and ETS (Emissions Trading System) allocations for all sites. Dashboard access Qkliksense.
• SPM - SPM (Sustainable Portfolio Mgmt) - SPM is a custom built tool in SAP that standardizes and records sustainability assessments in order to support decision making processes. It combines:
  - on the vertical axis: the monetization of all the environmental impacts based on the ecoprofile done in simapro (excel upload)
  - on the horizontal side, the market positioning based on a form
  The evaluation is done on a data object called PAC (Product in Application) that is linked via correlation tables to products and end uses in order to allow the visualisation of the sales for each SPM category.

Non-SAP Applications to upgrade:

• Simapro - LCA (Life Cycle Assessment) software to quantify environmental product development objectives. Will be in R&I scope.
• Gabi - LCA software for profiles of carbon, water and product environmental footprints.  R&I tool, should in R&I scope. 
• EcoInvent (2ndary data) - library of emission factors. Linked to SimaPro.  Database only, not software.
• IBAT (biodiversity)
• Sigreen (PCF collect) - SaaS aiming at facilitating the exchange of PCF within the value chain. It was co developed with TfS.
  
• Pure (SERF) - Emissions and water, survey tool to manage the reporting campaign to collect all the HSE KPIs. It includes plauseability checks, simple calculations, KPI ownership management.  Connected to Gensuite to receive reported accidents. 
  • Water Live Dashboard
  • Waste Quarterly Dashboard
• PCF (Product Carbon Footprint datalake) -  Custom made solution to calculate carbon footprints at product level.  Fed by SAP BW for WP1 and PF1. 
• EcotransIT (World) - The most widely used software worldwide for the automatic calculation of energy consumption, carbon emissions, air pollutants, and external costs.  Contract not signed, yet, under negotiation.   Database, no software.

SAP Applications to integrate/connect:

• SAP EHS (Product Safety, SVHC, DG)
• Colmar (CAPEX tracking)
• Concur (travel)
• BW Tiers (transport)
• SuccessFactors (HR)

Non-SAP Applications to integrate/connect:

• Ecovadis (supplier screening)
• Wave (Star Factory)

• WeGo (Portfolio Management)

TBC which in progress for upgrade prior/parallet to ERP Rebuild? TBC Marie

Qliksense integration to Simapro change?

Emissions management S/4HANA as future tool to replace non-SAP applications?

Waste

Green token:  E2E transferrability of sourcing scheme.  Should be in ERP.  Biobased raw mat & mass balance.  needed quickly, temp tool required?   Niche alternative one only, start up, small company. Discussion needed with SAP this year.  Other alternative to develop self.  No impact in AS IS landscape. In xls only.  Regulatory drive CSRD to disclose % raw materials.  today no process or tool to measure.  Will disclose 0 which is not true.  Reputational risk would trigger financing risk. Green bonds financing opportunities looked at green investor.  Not poss if 0 material bought.  Already say to cust that some product are sustainable.  But annual report reports 0.  Inconsistent.  Disconnect betwen Marketing, regulatory.  Gap.

Ongoing Projects 

impact on landscape?

RFI ESG Disclosure and Performance

Gensuite one option.  Synergies with reporitng.  Target state data capture and clean up close to source.  May mean movin away from Gensuite to where data ownership, modelling is more frequent.  Gensuite not right fit, maybe more towards Microsoft.  Pilot in autumn to test automatiion of env metric, modelisation for data cleaninng and then consume clean data on corporate level.

Shortlist of two, favourite Greenomy as short term solution so not overspend.  Plug and play.  Recommendation given, waiitng for deicsion  

Launch of Sustaibility Control Tower RFI, extended to SAP, SAP invited to answer.  Unlikely they will be shortlisted.  RFI to consolidate all sustainability data in one place, create reporting layer and insights layer on top.  1-2 year contract to revisit once ERP Rebuild is in place.  Hence AS IS is a moving target.  Different scope to Green Token.  Demos have been presented by SAP this year to Marie with PWC.  Scope, AI and insights not good enough.   RFI supported by KPMG experience with other client and finalised in next days.  2.5 weeks for providers to answer by mid June.  Other potential providers SAP, Gensuite, Salesforce, Microsoft (new partner AI), Simapro provider Sphera.  Pure players: https://watershed.com/en-GB, https://www.cority.com/, https://figbytes.com/company/about/, Watershed.com. June/July 2023 Go-No Go decision.  Syensqo IT contacts are Guillaume Muller (PM sustainability) and Mathilde Lascombes (for the AI capabilities) for now.  Syensqo will involve purchasing and architecture once we have shortlisted

*Sustainability Control Tower: SAP scope, AI and insights not good enough. ESG data, elements on basic reporting using tools creating KPI library.  This should be covered by SAP.  Enhancement of this data SAP lacks, reporting layer e.g. KPIs, emission factors e.g. ecoinvent, ecotransit.  For example carbon accounting.  Pureplayers look into public data where plant data is missing, to make assumptions where there is gaps.   Other functionality, AI native pureplayer is integrated benchmark.  Competitors in tool for KPIs in market based on public information. SAP solution does not cover this.  No company in manufacturing uses the Sustainability Control Towers. 

Waste mgmt module in SAP S4 HANA

is  being looked into as should be in SAP from Marie's point of view. 

Harmonisation.

Dedicated project on carbon footprint

managed by Philippe Chevaux (Sustainability DT) 

eg. estimation on product footprint. Project finish by end of 2024.  

Digital sustainability
Emissions impact when buying and selling to understand kg of CO2 to get product to customer.  Importance to customers, the lower CO2 the greener.  Other companies CSRD aim to reduce emissions.  

Aim to take control what is happening in supply chain.  Syensqo needs activity data and emission factor e.g. how many kg CO2 for certain activity.  Data build by experts or external databases.  Economic accounting and carbon accounting same: buy raw materials, production, transport, man power, waste.  It is the first time ever that Syensqo have product level accounting for Sustainability.  Few other companies are at same stage.  Historically accounting at plant or group level only.  CO2 = direct emission on product level (scope 3).  Beforehand at plant level. Scope 1 directly e.g. burning into air, Scope 2 e.g. buying electricity.  Scope 1 data BW Cerise where activity is collected combined with emission factor for each plant.  Mapping table for each plant in BW.  Qty of energies are reported from ERP directly.   Cerise is plant level, Syensqo are buying these energies and combining the emission factor. WP1 uses qty of energies in BOM .  Emission factor not from BOM, Cerise tool to get emission factor at plant level.  

Changes to carbon print, that could reduce emission factor: optimise process leading to less consumption, measured at plant, change of BOM based on lower conception.  Otherwise it is possible to change provider for energy supplies to reduce emissions factor.  Selecting suppliers with lower footprint.  

Accuracy key TO BE to govern and implement solution going forward.  Data flow as one version of truth.  For raw materials v good accuracy according to Matthieux.  Better waste allocation would be beneficial.  
Resource and time constraints hindering to go beyond PCF (Product Carbon Footprint) e.g LCA Life Cycle Assessment.  Regulation more on reporting ESG than on PCF. PFC not forced by regs to be provided, other than customer impact deciding to buy more PCF friendly products.  PCF for customer benefit only.  GBUs have no one priority.  Some customers may stop selling otherwise. Business continuity impact.  PCF also needed for corporate ESG disclosures, especially 3.1.  
What are the requirements for annual disclosures?  Cerise tool is backbone for reporting Scope 1 and 2 relating to energy.  Some are essential for annual reports.  Strategy Gabriela, SAP first, if not fully cover requirements, then certified product.  In some instances, SAP development instead of 3rd party product.   
Procurement initiative for pressuring vendors as part of 3.1.  A way to understand where emissions come from at operational, procurement, market level. Enables to start taking action on group targets.  

S/4HANA Capabilities To Be

SAP Green Token

Being looked at by Sustainability since last year, stopped as waiting for S4HANA.  Some docs from last year exist from SAP, March 2023. Raw materials, purchasing, issue certificates for finished products.

SAP Green Token is a chain-of-custody business application designed to help organizations trace and account for certified sustainable versus conventional feedstock throughout their supply chain network. Organizations can easily trace their inbound material’s provenance (origin) from their suppliers and outbound product sold to their downstream partners. SAP Green Token aims at providing organizations with the following benefits:

• A first-in-class traceability and transparency approach to work with their supply chain partners and customers.

• An immutable proof of certified commodity chain-of-custody and ownership whether it be inbound, processed, or outbound.

Using the principles of mass balance, tokenization and blockchain, SAP Green Token acts as a multicommodity platform that enables you to account for the full chain-of-custody of commingled raw materials to their origin.

Sustainable and conventional (that is, non-sustainable) commodities are traced through your supply chain and production processes using mass digital twins (tokens) on a blockchain. This allows transparency from different origins to be measured by counting the tokens.

Each organization or member of the supply chain forms part of your network, and may be responsible for operations like:

• Aggregation of sustainable or conventional commodities.

• Processing of commodities through comingling commodities for the purpose of refining or production of new commodities or products.

• Distributing finished products to end consumers or other organizations.

The primary source of input for the SAP Green Token application is through the upload of structured files in a comma-separated values format (CSV). These include:

• Inbound Deliveries CSV
• Conversions CSV
• Pending Orders Fulfillment CSV
• Goods Issued CSV
• Sales Inquiries CSV

The CSV files can be from any 3rd party system, and you upload them on the Imports screen. Uploading CSVs automatically drives other features within SAP Green Token, such as volume requests and the creation of volumes, and creating or updating entries on the Inbound Delivery screen.  

Process Workflows

• Conversion Workflow
• Outbound Workflow
• Inbound Workflow
• Consumption Workflow
• Multisite Workflow

Example for online partner inbound workflow:

1. Consolidate relevant deliveries for the delivery period:  If your instance of SAP Green Token has been set up for integration with SAP ERP Central Component (SAP ECC) or SAP S/4HANA this will be handled automatically. This may also be the case if the non-SAP ERP system used supports this step.
2. Extract delivery information to Inbound Deliveries CSV: Extract the inbound deliveries identified and consolidated in the step above and populate the Inbound Deliveries CSV manually. This can happen automatically if configured appropriately in your ERP system.
3. Import the CSV into SAP Green Token: 

   Entries on the Inbounds screen (under the Process tab) are created by uploading volumes in CSV files using the Import CSV button on the overview screen or by dragging and dropping files on the Imports screen.

   After uploading an inbound deliveries CSV, you can review all inbound delivery transactions on the Inbounds screen.

   The Inbounds screen provides details on the delivery of certified and conventional materials. Users can view different attributes associated with the materials as well as the status of the order.

4. Fulfilment request generated and inbound delivery entries created
5. Request fulfilled by upstream partner
6. Tokens received and your balance is updated

Green Token empowers companies to track and report their Greenhouse Gas emissions of the products they receive and sell, specifically for companies that conform to ISCC+ standards to substantiate their sustainability claims. This is accomplished by the persistence of attributes to the certified tokens associated to an inbound and conversion order.

ISCC GHG Attributes are provided out-of-the-box with Green Token. You can assign these attributes to any material in your company catalog to track and report against your manufacturing and delivery processes.

Track and Trace

The Chain of Custody feature provides transparency into all materials in your inventory and what materials they're comprised of. It also provides key information on the materials, the number of sustainable and conventional volumes transferred, along with the identity of the member who provided the material.  This level of transparency is only available for upstream members of the network. The supply chain member accessing Chain of Custody won't have this level of transparency for downstream members of the network.

The Material Provenance view shows you the original raw material from which the selected product or material was derived, regardless of the intermediary conversions or transformations. This helps you see the sustainable qualities of raw material from its original source and introduction into the supply chain.

Reports

Under Reports, you can find a set of complementary reports that can be used by organizations being audited for International Sustainability and Carbon Certification (ISCC), for example. The data for these reports are generated in real time through the day-to-day transactions that are executed in SAP Green Token. This reduces the level of effort and the margin for error in pulling supporting details from disparate systems.  The following reports are available:

• Conversion Audit Report
• Material Balance Report
• Material Movement Audit Report
• Order Audit Report
• Transaction Audit Report

Assumptions

Constraints

Impacts

Business Rules

Options considered

Option A: SAP Green Token

• Ensures traceability as part of Procurement (Sourcing/Buying)
• Substantiate sustainability claims to derive value based pricing (Marketing/Selling)
• Reduce Scope 3 emissions as part of Supply Chain (Transporting)
• Follow trajectories to meet targets as part of Reporting (Finance/Regulatory)
• Access green financing
• Meet ESG expectations (customers/regulators/investors/disclosure)

• helps you see the sustainable qualities of raw material from its original source and introduction into the supply chain.

  
  

Option B: 

Option C: 

Option D: 

Evaluation

	Option A SAP Green Token	Option B AS IS Applications	Option C	Option D
Criterion 1	Pro Ensures traceability as part of Procurement (Sourcing/Buying) Substantiate sustainability claims to derive value based pricing (Marketing/Selling) Reduce Scope 3 emissions as part of Supply Chain (Transporting) Follow trajectories to meet targets as part of Reporting (Finance/Regulatory) Access green financing Meet ESG expectations (customers/regulators/investors/disclosure) helps you see the sustainable qualities of raw material from its original source and introduction into the supply chain. Con	Pro Pro	Pro Con	Pro Con
Criterion 2	Pro Con	Con	Pro Pro	Con Con
Criterion 3	Pro	Con	Con	Pro

See also

Change log

Workflow history