Issue

Succinctly describe the issue or problem statement that this Decision addresses. Why is a decision required? What business or technical problem does it address?

A long-term solution is required to effectively manage sustainability initiatives to support achieving Syensqo's environmental goals.  The aim is to move away from averages and start using actuals, getting sight of actual data from suppliers and their suppliers.  The essential building blocks for CSRD reporting are based on tools from many vendors and Syensqo's existing technology.  It requires combining into one integrated solution for ESG reporting going forward.   

The following slide shows missing and partially covered capabilities in Syensqo:

A decision is required on the long term solution for ESG Disclosure and Performance, post the implementation of RFI ESG Disclosure and Performance in 2024.  

Recommendation

Summarise the recommendation being made for the reader, leaving the pro/con evaluation and exact decision-making process to the subsequent sections.

The recommendation is the implementation of SAP Sustainability Control Tower (SAP SCT). 

While both SAP SCT and Greenomy offer valuable capabilities for sustainability management, SAP SCT is better suited for a large enterprise seeking a comprehensive, integrated solution that covers a wide range of sustainability metrics, advanced analytics in line with industry-specific needs.  

SAP SCT is the right long term solution for Syensqo due to its specialised features covering the required capabilities as specified in the RFI alongside standard integration with the SAP and robust compliance and reporting tools.  It covers a wide range of sustainability metrics, advanced analytics and industry-specific needs.   SAP SCT gives access and transparency to ESG disclosure and performance in one central place rather than in complex landscape.   This integration enables real-time data collection, advanced analytics, and reporting including KPIs or emission factors to support Sysensqo's Sustainability initiatives. 

Background & Context

Explain the context in which the decision is being made.

The RFI on ESG Disclosure and Performance was launched and finalised in July 2024 to consolidate all Sustainability data in one place, create reporting layer and insights layer on top.  It was aiming at a short-term solution, Syensqo decided to be Greenomy, which is to be revisited with the implementation of the ERP Rebuild project.  

The required capabilities for the RFI on ESG Disclosure and Performance, which are also applicable to the long-term solution were:

• Centrally managed calculations. Avoid large proportions of pre-calculation in various source systems across the landscape. 
• Centralisation of ESG data and reporting.
• Long term solution commitment.
• Annual or quarterly reporting metrics.
• Leverage of AI where beneficial.

The process is driven by a variety of internal and external data sources, which need control, tracing and verification and needs to cover the following steps:

1. Assess metrics and data: Prioritise ESG topics based on risks and issues.
2. Automated data collection and preparation: data capture for emissions and ESG reporting.
3. Centralised ESG data: granularity.
4. Metric calculation:  aggregation and calculation of scope 1, 2 and 3 emissions and other ESG metrics.
5. Sustainability tracking via analytic insights (including visualisation) and reports and disclosures (multiple frameworks).
6. Sustainability initiatives based on actions and ESG compliance.

ARCHITECTURE

There are a number of applications currently in use in the Sustainability landscape, which will either be integrated or replaced to support the future ESG disclosure and performance solution.   

The following tools are potential data sources or integration points going forward.  Highlighted in green are data sources related to the recommended ERP Rebuild Sustainability solutions (see related KDDs in References).  Enrichment with external data may also be required.  There is the possibility for metric calculations to make use of AI generated insights.   Scope 1, 2 and 3 in Syensqo currently involve approximately 20 metrics, 15 of which are part of scope 3.  A validation workflow is important. 

Sustainable Design/R&I:

1. Life Cycle Assessment - Simapro/Gabi
2. Footprint Management -  SAP SFM

Sustainable procurement:

1. Bio and recycled based raw material tracking (SAP) (see KDD Material Traceability)
2. Human rights due to diligence (Ethixbase)
3. Supplier sustainability ratings (EcoVadis)
4. Carbon footprint sharing (Sigreen)
5. Carbon footprint management (SAP Sustainability Footprint Management - SFM) (see KDD063 Sustainability Footprint Management)

Manufacturing:

1. Carbon scope 1 and 2 and 3 (SAP Sustainability Footprint Management - SFM)
2. Emissions reporting (SAP Sustainability Control Towers - SCT)
3. Waste reporting (SAP EHS Waste Management) (see KDD053 Waste Management)
4. Water reporting (SAP Sustainability Footprint Management - SFM) (see KDD063 Sustainability Footprint Management)
5. Star Factory project portfolio (Wave, Gensuite)
6. Accident reporting (Gensuite)

Supply Chain:

1. Footprint Management scope 3 (SAP Sustainability Footprint Management - SFM)
2. Transport related scope 3 GHG calculations (EcoTransIT)

HR:

1. Diversity, Equity, Inclusion (DEI) (SAP SuccessFactor)
2. Training and performance (xls offline)
3. Gender pay gap (Payroll solution)
4. Living wages (Payroll solution)

Business:

1. Marketing (Sustainability Portfolio Management - SPM)
2. Inventory (SAP Product Compliance: Substances of Very High Concern - SVHC)
3. Life Cycle Analysis (LCA solution)

STANDARDS

ISAB in combination with IFRS requires sustainability standards and disclosures.  EU policy for CSRD is different to US or China, but all are influenced by TCFD (Climate Related Financial Disclosure) framework established 2025, which used by global investment companies e.g. Black Rock (green bonds).  The structural assessment of CAPEX impacts includes the forecast of financial impact of sustainability.  It needs access and transparency in one central place rather than in complex landscape.   

TAXONOMY

The EU Taxonomy Regulation establishes a common classification system for sustainable economic activities within the EU, designed to offer clear guidance to businesses and investors on what constitutes environmentally sustainable practices.  Organisations are required to report the share and absolute values of their turnover, CAPEX and OPEX, which meet the EU Taxonomy's eligibility and alignment criteria.  The criteria specifies the range, methodology and format for mandatory disclosures.

The EU Taxonomy identifies six environmental objectives:

1. Climate change mitigation
2. Climate change adaptation
3. Sustainable use and protection of water and marine resources
4. Transition to a circular economy
5. Pollution prevention and control
6. Protection and restoration of biodiversity and ecosystems

To be recognised, activities must make a significant contribution to these objectives, not significantly harm any others, and comply with minimum safeguards concerning human rights, anti-corruption, tax compliance, and fair competition.

Assumptions

Clearly describe the underlying assumptions which informed or limited the choices available, or impacted the decision: cost, schedule, regulatory requirements, business drivers, country footprint, technology, etc. Include links as necessary. This section is important because a future change in circumstances might invalidate some key assumptions, which then prompts a decision to be revisited. 

Implementation of related SAP Sustainability functions as per recommendation to support SCT as part of ERP Rebuild:

• SAP Sustainability Footprint Management
• SAP Green Ledger

Constraints

Capture any constraints or limitations inherent to the recommended option. This could be aspects which, if changed or removed in future, could cause the decision to be revisited or invalidated. For example, a constraint might be that a new product has significant gaps in important functionality, which caused an older alternative to be recommended. If those gaps are closed in future, this might cause the decision to be invalidated.

• The capabilities of the solution are dependent on the SAP Roadmap and its timeframe (see References).

• Integration of data from various sources including SAP and non-SAP systems.

• Ensuring data accuracy, consistency, and completeness when dealing with large volumes of data from disparate sources.

• The SAP Sustainability Data Exchange initially becomes available in Q4 2024 (see References).  It is planned to become a standard-setting engine that allows exchange of sustainability data, securely, across value chains. Whilst it is not covered in detail in this KDD it may be considered by Syensqo going forward.
• SAP Licence requirements for Sustainability Control Towers and Use of AI for CPE.

Impacts

Describe the impact of the decision on other aspects such as other processes, infrastructure, other SAP modules or systems, data cleansing and migration, developments, automations, interfaces, in-flight projects, etc.

SAP Sustainability Control Tower (SCT) integration involves connecting various SAP and non-SAP systems to provide a comprehensive view of Syensqo's Sustainability performance.  

• SAP Environment, Health, and Safety (EHS):

• • Use EHS data to track hazardous materials, emissions, and waste management.

• SAP Supply Chain Management (SCM):

  • Monitor the Sustainability performance of suppliers and logistics partners.
  • Track the carbon footprint and resource usage across the supply chain.
  • Integrate data on the sourcing of raw materials.
• SAP Sustainability Footprint Management (SCM)
  • Detailed supply chain data including transportation, production processes and material sourcing.
  • Shares emissions data from various supply chain activities for footprint calculations.

• SAP Ariba:

  • Sustainability for SAP Ariba offers the ability to enhance functionality and integrate applications that support procurement sustainability goals.  It is a Partner solution from Cordis Solutions, a partner company of excelerateds2p and is available on SAP Store.  It includes a collection of packaged services, pre-built content, enhanced configuration, and complimentary extensions built on BTP.
  • Supplier assessments to meet sustainability criteria and track performance.

• SAP Analytics Cloud (SAC):

  • Advanced analytics, reporting, and dashboarding.

Business Rules

The decision may translate into business rules which enforce the decision and will require configuration. List these business rules here. For example, "An Outline Agreement cannot be created via the RFQ process. An awarded RFQ can only result in a Purchase Order". 

The management of business rules supports sustainability initiatives to be more effective, compliant, and aligned with their strategic objectives.  

1. Data collection and validation:

   • Rules for data collection from various sources, ensuring data accuracy and completeness.
   • Implementation of validation checks to ensure data integrity and consistency.

2. Performance metrics and KPIs

   • KPIs for Sustainability initiatives (e.g. carbon footprint, energy consumption, water usage).

   • Targets and thresholds for each KPI to monitor performance against sustainability goals.

3. Resource Optimisation:

   • Rules for optimising resource usage, such as energy efficiency, water conservation, and waste reduction.
   • Monitor resource consumption.

Options considered

List the options (viable options or alternatives) you considered. These often require a longer explanation with diagrams, or references to other documents (links are best, but attachments are also possible). Use enough detail to adequately explain what you considered so that a project or business stakeholder reviewing this decision will not come back and ask "did you think about...?"; this leads to loss of credibility and questioning of other decisions. This section also helps ensure that you considered enough suitable alternatives rather than just copy/pasting SAP's recommendations.

Option A:  SAP Sustainability Control Towers (SCT)

Describe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

SAP Sustainability Control Tower (SCT) is a cloud-native solution built on SAP Business Technology Platform (SAP BTP).  It can be directly integrated with SFM and Datasphere to source information for the required metrics.  SAP SCT is a centralised platform designed to monitor, manage, and optimise sustainability initiatives across an organisation.  It leverages data analytics, real-time monitoring, and integrated systems to provide a comprehensive view of an organisation's sustainability performance.

SAP promotes Sustainability Control Towers with the availability of the following features:

RELEVANCE

1. Supply Chain Sustainability (Scope 3): Monitor and optimise the sustainability performance of suppliers and logistics partners.
2. Energy Management (Scope 2): Monitor energy consumption across all facilities and compare against predefined targets.
3. Waste Management (Scope 3): Monitor waste generation and disposal practices.
4. Water Management (Scope 1 and 2): Track water usage in manufacturing processes and identify opportunities for conservation.
5. Carbon Footprint (Scope 3): Calculate carbon emissions for each production process and ensure compliance with emission limits.

STANDARDS

SAP SCT is designed to support ESG (Environment, Social, and Governance) reporting by providing a set of pre-defined metrics aligned with the European Sustainability Reporting Standards (ESRS).

It offers Corporate Sustainability Reporting Directive (CSRD) coverage through European Sustainability Reporting Standards (ESRS) and EU Taxonomy.  For reporting standards, SAP SCT currently covers 88 metrics throughout the Environmental, Social, and Governance (ESG) areas. The solution is transitioning from supporting voluntary reports such as World Economic Forum (WEF) metrics to adopting ESRS, which can also support customers who are starting to address SEC regulations and ISSB standards.  Currently, SAP Sustainability Control Tower supports quantitative metrics only. 

DATA MANAGEMENT

The following data import channels are available in SAP SCT:

Channel to Import Data	More Information
File uploads	Import your data using files in the CSV file format, for example, to mass import your GHG emissions in the Collect Emission Data app or to upload data for measures in the Manage ESG Data app.
Integrations	Import your data through integrations with supported solutions.
SAP S/4HANA SAP S/4HANA Cloud	Use SAP S/4HANA to import financial data in the Manage ESG Data app. Using the Manage ESG Data App SAP S/4HANA Integration
SAP Datasphere	Import data from SAP Datasphere for any of the existing DPIs in SAP Sustainability Control Tower, for example, water withdrawal data in the Manage ESG Data app. Using the Manage ESG Data App SAP Datasphere Integration
SAP EHS Management, environment management	Leverage GHG emission data stored in and import it through the for a given time period. Using the Import Data from SAP EHS Management Application SAP EHS Management Integration
SAP Sustainability Footprint Management	Leverage GHG emission data calculated on the corporate and product level in SAP Sustainability Footprint Management. Using the Manage ESG Data App SAP Sustainability Footprint Management Integration
APIs	Import your data using APIs available on the Business Accelerator Hub.
Outbound API	For more information, see Outbound APIs.
Inbound API	For more information, see Inbound APIs.

Metrics

The sustainability metrics in SAP Sustainability Control Tower support many of the core metrics defined in the European Sustainability Reporting Standards (ESRS). Additionally, the app Manage Metrics provides extensibility capabilities and enables you to add custom metrics, depending on your business needs.  Sustainability metrics are classified into four major areas:

• Environmental
• Social
• Governance
• Economic

They are used to measure performance in the areas environmental, social, and corporate governance (ESG) as well as economic. The sustainability metrics allow to identify trends over time by showing how a specific metric's value has increased or decreased.  SAP SCT provides two basic types of metrics:

• SAP-provided ready-to-use metrics whose details, for example, which measures or calculation method are used, cannot be further customised.
• Custom: User-defined metrics with two subtypes, Basic and Advanced.

The difference between the metric types is the following:

• Basic metrics don't require additional calculations based on measures. 
• Advanced metrics are calculated from data that you upload for the respective measures (actual data).
• Metrics regarding the EU Taxonomy are calculated through the technical screening criteria which serve to identify Taxonomy-aligned activities.

The metrics currently available as per SAP standard can be found in the references.

Measures

A measure is used to quantify a metric, depending on the measure's specific dimensions. For example, the measure Training Costs calculates the applicable value for the metric Training Expenditure across age groups, gender, and ethnicity.  The measures currently available as per SAP standard can be found in the references.

Dimensions

Dimensions are attributes to the measures you create and serve to further define and specify the measures. SAP Sustainability Control Tower provides 2 basic types of dimensions:

• SAP-provided: Ready-to-use dimensions.
• Custom: User-defined dimensions whose details can be customized based on your business needs. Custom dimensions can be defined in the Manage Custom Dimensions app for the DPIs Generic, Emission, Injury, and People.

The dimensions currently available as per SAP standard can be found in the references.

INTEGRATION

SAP Sustainability Footprint Management enables the calculation of corporate footprints for a monthly periodicity.  SAP SFM enables to automate the data collection at more granularity.  It connects to the ERP system e.g. goods receipt, goods issue, suppliers, products purchased, assigns emission factor.  In future SAP SFM will be able to calculate corporate and product footprints as basis for SCT.  SAP SFM currently provides an internal API with footprints aggregated at the level of a plant, period, GHG scope and GHG category.  It uses this internal API for replicating the corporate footprints.

SAP SCT works as self-contained solution. There is no explicit need for SAP Analytics Cloud (SAC) and SAP Datasphere. When it comes to the simulation and forecasting capabilities, these capabilities are embedded via CPE (Calculation and Process Engine) including data harmonisation and modelling capabilities. For some use-cases, like data harmonisation and aggregation from multiple source systems, it may be beneficial to use SAP Datasphere.  For some advance analytics and data visualisation features it may be beneficial to use SAC features.

Datasphere

• The views used to import data from SAP Datasphere correspond to the data provider interfaces (DPIs) used in SAP SCT.
• DPIs structure the data into different categories. DPIs are mapped from SAP Datasphere, in which the data is stored, to SAP Sustainability Control Tower.
• Integrate with SAP Datasphere to replicate data.  Ability to upload 20 custom dimensions for all available DPIs.

The following DPIs are available:

SAP SFM

With the integration of SAP Sustainability Footprint Management in the SAP Sustainability Control Tower solution, calculated greenhouse gas (GHG) emission data from SAP Sustainability Footprint Management can be reused on corporate level.

EHS Management

Integrate with SAP EHS Management, environment management to import activity data for tracking greenhouse gas (GHG) emission data:

• Import your recorded GHG emissions from SAP EHS Management system.
• Associate activity data with GHG scopes and sub-categories based on pre-defined classifiers.
• Assign emission data to business locations in SAP SCT.
• Analyse emission data in the View Emission Dashboard app.

It is possible to import GHG emissions and offsets from calculation results, data collections, and location aggregations.  Restrictions include:

• Only data for the listed substance carbon dioxide equivalent in metric tons is imported.
• Of the GHG data classifiers in SAP EHS Management, a subset is supported.
• Only approved, non-preliminary data is imported.
• The data must be assigned to locations of type Site or Plant. 
• The import uses your SAP S/4HANA configuration for data replication to import calculation results, data collections, and location aggregations using CDS views. Data is imported only for the given time period. The replicated data is transformed and stored into the emissions DPI.

SAP Analytics Cloud (SAC)

It is further possible to integrate SAP Analytics Cloud with SAP SCT for real-time data access and dynamic visualisation on greenhouse gas (GHG) emissions data.  Integration steps involve logging in to SAC, establishing a live connection, selecting SAP SCT and setting up a data model for building a dashboard.  The integration allows for direct live connections, eliminating the need for data replication.  Currently only GHG data is supported.

Dimensions currently supported for Greenhouse Gas (GHG) Emissions:

REPORTS

There are report creation functionalities available through Calculation and Process Engines (CPE), which are basically creating a form-based PDF.   With the apps in the reporting tab pre-defined ESRS-aligned metrics can be explored and support generation of ESG reports with the help of AI.  The use of AI is a premium functionality for which you require an AI Units license.

With the Generate ESG Reports with AI app AI-based sustainability reports can automatically be generated using out-of-the-box templates.   The tool is built into the app Generate ESG Reports with AI and is designed to support by automating the reporting process across selected periods. It uses the ESG (environmental, social, governance) data provided to SAP SCT and creates reports based allowing for periodic selection (year, quarter, month).  These AI-generated reports are available for download in the pdf format and follow the structure predefined in the chosen SAP-provided report template.

APPS

Manage ESG app

Capabilities of the 'Manage ESG app' are as follows:

• Import new data for measures and metrics using CSV files (templates are available in the app). File import is limited to a maximum size of 20 MB.
• Fix data for an existing measure using CSV files.
• Import data from these SAP systems:
  • SAP S/4HANA or SAP S/4HANA Cloud: For the measure 'Amount'.
  • SAP Datasphere.
  • SAP SFM: For GHG emission data using the measure 'CO2e Emissions'.

  • Import data SAP EHS Management, environment management.

• Download and review error logs.

• Validate imported data, run custom metric calculations and publish your data for use in other apps.

• View or export imported data.

There are three tabs available in the Manage ESG app: Measures - Actuals, Custom Metrics - Actuals, and All Metrics - Targets.  It is possible to import from a file, fom a SAP System or export a template.  Existing or new sustainability metrics can be used and data upload data for each.  

SAP SFM:

Calculation results SAP SFM:

Import from SAP SFM to SAP SCM:

Data validation after import:

SAP SCT by location:

SCT trends and targets:

Option B:  Microsoft Fabric

Describe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Microsoft Fabric is a comprehensive data platform designed to unify various data services and tools into a single, integrated environment. It aims to streamline data management, analytics, and business intelligence processes by providing a cohesive suite of tools that work seamlessly together.

Key features are as follows:

1. Data Integration: Microsoft Fabric offers robust data integration capabilities, allowing users to easily connect, ingest, and transform data from various sources, both on-premises and in the cloud.

2. Data Storage: The platform provides scalable and secure data storage solutions, ensuring that data is stored efficiently and can be accessed quickly when needed.

3. Data Processing: With powerful data processing tools, Microsoft Fabric enables users to perform complex data transformations, aggregations, and analyses, making it easier to derive insights from large datasets.

4. Analytics and Business Intelligence: Microsoft Fabric includes advanced analytics and BI tools that help users visualize data, create interactive reports, and share insights across the organisation.

5. Collaboration: The platform supports collaboration among data professionals, allowing teams to work together on data projects, share resources, and maintain data governance.

6. Security and Compliance: Microsoft Fabric ensures that data is protected with robust security measures and compliance with industry standards and regulations.

Overall, Microsoft Fabric is designed to simplify the data lifecycle, from ingestion and storage to processing and analysis, providing a unified platform that enhances productivity and drives better decision-making.

Microsoft Fabric was investigated by Syensqo via an RFI in 2024 with proof of concept in Taveau site launched recently for two months.   It is a pilot to test automation of environmental metrics and modelisation for data cleaning to then consume clean data on corporate level.   The goal is to automate the calculation and gathering with traceability of 20 environmental KPIs from SERF to understand if it is technically feasible to create some insights.  

The solution integrates with the MES system based on a data lake project (Startek). The idea is to collect water flow taking flow combined with Labware for analytics with pollutant, which results in KPI based on the pre-packaged solution by Microsoft Fabric.  Fabric has many more functionalities.  KPI library should remain in Sustainability. 

Microsoft Purview compliance Manager could be an option for disclosure going forward. 

Possible to use Microsoft Fabric as data lake with SAP SCT on top separating disclosure and data e.g. KPI library.   Could also put current solution Greenomy on top of Microsoft Fabric.  SAP Datasphere is also an option instead of Microsoft data lake.  

Option C:  Greenomy - Continue As Is

Describe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Greenomy is being implemented via an RFI in 2024 as a short term, plug and play off the shelf solution for ESG Disclosure and Performance.  It excels in sustainability reporting and compliance, particularly within the context of the EU Taxonomy.  It is more suitable for organisations primarily focused on these aspects.  The solution is of smaller scope with AI as an option to combine with other tools for supplier interaction and environmental accounting.  Greenomy as short term solution, plug and play, so not overspend.  Quickest time for return, off the shelves.  For various reasons not signed in August yet. Committee will sign off in September 2024.

Evaluation

Outline why you selected a position. The best format could be a pro/con table (sample below), but is up to you as the author. You must consider complexity, feasibility, cost/effort to implement, but also ongoing operational impact and cost. You must consider the program principles and explain any deviations in detail. This is probably as important as the decision itself.

See also

Insert links and references to other documents which are relevant when trying to understand this decision and its implications. Other decisions are often impacted, so it's good to list them here with links. Attachments are also possible but dangerous as they are static documents and not updated by their authors.

ESRS_Starter_Pack__SAP_He-export.xlsx

SAP SCT SAP-Road-Map-Explorer-20241002145115.xlsx

SAP-Sustainability Data Exchange Road-Map-Explorer-20241003043425.xlsx

Related KDDs:

KDD063 Sustainability Footprint Management

KDD065 Carbon Accounting

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