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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?

Syensqo is required to compute its Corporate and Product Carbon footprints for different stakeholders:

• investors and markets as it has a target on GHG emissions reduction
• regulators in various jurisdictions
• customers

A decision is required as to which tools should manage the business and system process for Sustainability footprint management in line with the Syensqo Sustainability roadmap, potentially replacing current tools in the Sustainability landscape.

Recommendation

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

There is an expectation that Syensqo should adopt a mainstream integrated solution for carbon footprint management.  It enables Sysenqo to achieve group targets by understanding where emissions come from at operational, procurement and market level.  Data accuracy is key to govern and implement the solution going forward, hence it needs to be based on an integrated data flow which represents one version of truth. 

The recommendation is for the business to implement SAP EHS Emissions Management for process emissions and track the total waste generated during the Syensqo operations as well as SAP Sustainability Footprint Management to cover Scope 1, 2 and 3 requirements as part of an integrated ERP solution (Option D).  Whilst the extent of Scope 3 integration with SAP and hence the extent of SAP SFM scope is to be finalized as part of detailed design, the recommendation is to endorse the implementation of SAP SFM together with SAP EHS Emissions Management in support of an integrated solution in the long-term. 

It needs to be confirmed as part of detailed design, which of the current Syensqo applications in the ESG landscape will be replaced by the recommended solution.  The future implementation of additional SAP SFM functionalities and enhanced integration with other processes as per SAP Roadmap will harmonize the ESG landscape further along the process.

Background & Context

Explain the context in which the decision is being made.

Due to complexity of acquiring information on the downstream part Syensqo typically provides cradle to gate carbon footprint rather than cradle to grave. The related frameworks are mainly GHG protocol, over and above the International Organization for Standardization (ISO) and Together for Sustainability (TfS), a joint initiative of chemical companies.  Sustainability footprint management in Syensqo is split as follows:

• Emissions management
• Water management 
• Energy management
• Land use  (out of scope for this KDD)

The following activities are to be considered as part of the scope for this KDD:

• Upstream activities - reported 1.6Mt of GHG emissions for 2023. (Scope 1 and 2)
  • Energy provider operations (Scope 2)
    • Purchased electricity
    • Purchased heating and cooling
    • Purchased steam
  • Company premises (Scope 1)
    • Production
    • Company cars
• Upstream activities - reported 4.2Mt of GHG emissions in 2023 (Scope 3)
  • Raw materials and fuels
    • Extraction
    • Processing
    • Transport and distribution
  • Waste
• Downstream activities - reported 1.9Mt of GHG emissions in 2023
  • Processing of products sold
  • Use of products sold
  • End-of-life treatment

Syensqo currently relies on industry data where no supplier data has been requested or supplied. Collecting PCF data from suppliers is instrumental to understand Syensqo's upstream Scope 3 baseline and measure progress.  Stakeholders, including investors, customers, and regulatory bodies, increasingly demand transparency and action on Scope 3.1 emissions.  PCF also needed for corporate ESG disclosures, especially 3.1.  Failure to comply can lead to reputational damage and financial consequences.  There is an ongoing procurement initiative in Syensqo for pressuring vendors as part of scope 3.1 emissions (purchased goods an services).

The 2023 Syensqo Annual Integrated Report reflects the drive to manage and reduce the footprint. Syensqo has set a 2030 target to reduce by 23% Scope 3 greenhouse gas emissions as compared to 2021 from its 'Focus 5' categories both upstream and downstream in the value chain, which represents over 73% of the total Scope 3 emissions.  Syensqo's 'Focus 5' categories of Scope 3 GHG emissions are:

1. Purchased goods and services (Category 1) which includes
   1. impacts of upstream transportation and distribution (Category 4)
   2. waste generated in operations (Category 5)
2. Fuel- and energy-related activities (Category 3)
3. Processing of sold products (Category 10)
4. Use of sold products (Category 11)
5. End-of-life treatment of sold products (Category 12)

Calculation

The calculations are fully manual today for Scope 3 with some queries developed. The calculation of Scope 3.1 emissions according to GHG Protocol can be a complex task.  There is a choice of three different methods:

• Spend-based method
• Average-data method
• Supplier-specific method

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. 

The following assumptions are underlying the SAP SFM solution recommendation to be a valid design: 

• All SAP deliveries require transportation and are covered by carbon footprint management upstream and downstream via SAP Transport Management and S/4HANA.
• The SAP licence for SAP S/4HANA Cloud for Environment Management (private edition) is covered as per implementation of SAP EHS Waste Management (separate KDD).  
• Footprint management and calculation is required on site and product level.  The solution for transactional carbon accounting requires more precise and granular tracking of emissions across business operations and supply chains.
• Rigorous rules for footprint management as well as related accounting data across the value chain are required to comply with regulatory and Financial Accounting standards.  
• Enhanced data capture, acquisition and governance is required throughout the organization e.g. data related to Scope 3.1 carbon emissions associated with the procurement of products or services. 
• The solution impacts various processes and stakeholders outside of Sustainability.  Appropriate business and stakeholder support is required on all levels due to the significant process and supply chain changes.
• All impacts and assumptions of the SAP SFM solution need to be understood by all impacted business processes and stakeholders. 
• SAP SFM impacts need to be included in relevant business roadmaps e.g. Procurement, Finance, Logistics etc.
• All management across the supply chain needs to be invested in supporting the SAP SFM solution.
• Appropriate system and process training will be conducted with all relevant users as part of the implementation process.  
• Which of the current applications in the ESG landscape will be replaced by the SAP SFM solution will be confirmed as part of detailed design. It may require a 'parallel' phasing out period of non-SAP applications, which are covered by the SAP SFM solution forward.  
• A contingency plan as part of the SAP SFM will be included in the implementation to ensure continuity when switching from related SAP and non-SAP applications.

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.

• This KDD covers the carbon footprint management only.  The creation of further KDDs may be required to cover other areas of Sustainability.
• Resource and time constraints are currently hindering to go beyond Product Carbon Footprint (PCF) whilst striving for Life Cycle Assessment (LCA).
• The following areas of Sustainability footprint management for Syensqo are out of scope for this KDD:
  
  • Water management 
  • Energy management  
  • Land use 
• SAP SFM - Roadmap:
  • Inclusion of downstream emissions (product use and end-of-life) in future releases to complete the cradle to grave life cycle.
  • Integration of carbon footprints into Purchase Requisitions to assess environmental impacts.
  • Connecting SAP Sustainability Footprint Management and its Footprint Inventory to SAP Sustainability Control Tower for including product and corporate footprints.
  • Integration with EHS Environment Management enables the incorporation and allocation of calculated GHG Scope 1 & 2 emissions into the footprint calculation.
  • SAP Roadmap for 2025 includes footprint breakdown for fossil and biogenic emissions product footprints.  
  • Inbound and outbound integration options for collecting supplier-specific product footprint data and for sharing calculated footprints with customers – supporting common standards like PACT.  It also includes the integration with SAP Sustainability Data Exchange. 
  • Incorporation of calculated footprints from SAP SFM into the preferred analytical application e.g. SAP Analytics Cloud or non-SAP solutions, an updated version of the OData API on SAP Business Accelerator Hub will be available soon. For future releases, SAP plans to provide simulation capabilities for various footprint scenarios and what-if analyses, enabling sensitivity analysis and comparison of product carbon footprints. It assists in sustainable decision-making regarding product design, production efficiency, and supply sourcing.
  • Inclusion of calculated transport footprints in organisational footprint inventories and overall product footprints in future releases, and further, plan to reuse the replicated ERP data for the calculation itself.
  • Replicating product cost estimates for carbon footprint calculations and reusing master data in freight transport calculations. 
  • Connections to Business Networks like SAP Ariba and Catena-X for data collection and sharing, supporting the PACT-Standard.
  • Importing and managing emission factors to be extended to other impact categories, like water or land use. 
  • To support the move from average to actual footprint calculation SAP plans to launch an API for sharing product footprints along the value chain, adhering to global standards like the World Business Council for Sustainable Development's Partnership for Carbon Transparency (WBCSD PACT) and the Together for Sustainability (TfS) initiative.  It will provide direct access to supplier footprints, simplifying the mapping process and improving data quality with primary data.
  • Introduction of automated mapping recommendations, a mapping wizard with validation checks, and an API for external providers for emission factors mapping of purchased products. 
  • More Scope 3 categories associated to downstream emissions and people transport are planned for future releases beyond current release scope of GHG Scope 1, 2, and 3 categories related to material, freight transport, and facilities.
  • Further automation on emissions distribution e.g. based on product mass (rather than fixed factors) is planned for future releases.

  • Integration of the footprints into the Business Networks and SAP Sustainability Data Exchange is planned to leverage its carbon sharing capabilities.

  • Updated version of the existing Analytical API will be available to integrate the calculated footprints into any other analytical application for analytics, disclosure, or other purposes..

  • For simulating and modelling alternative scenarios we plan to provide simulation capabilities, such as what-if analyses

• SAP EHS Emissions and GHG Emissions Management - Roadmap
  • SAP plans an integration of SAP SFM with SAP EHS Environment Management for incorporating GHG emissions calculations, and connections to Business Networks like SAP Ariba and Catena-X for data collection and sharing, supporting the PACT-Standard.

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.

• The solution for carbon footprint management impacts the following processes
  
  • Procurement -  Product footprints are integrated into Purchase Requisitions (PR).  It allows approvers and operational purchasers to assess the environmental impact of PRs.  
  • Warehouse Management - Integration of footprints in Inventory Management.
  • Transportation Management (TM) - calculation of greenhouse gas (GHG) emissions during manual planning and vehicle scheduling and routing (VSR) optimization.  CO₂ emissions are taken into account during manual and automatic planning and displayed in road freight orders.
  • Waste management including recycling.
  • Data governance - enhanced data capture, acquisition and governance is required throughout the organisation e.g. data related to Scope 3.1 carbon emissions associated with the procurement of products or services. 
• Integration of footprints into Logistic Business Network – Material Traceability (LBN-MT).  More is planned to publish product footprints into networks and portals, for improved customer relationships, streamlined processes, and better information transparency.
• Integration with SAP Sustainability Control Tower is planned.

• Carbon footprints are available in SAP Integrated Business Planning (IBP), enabling users to track greenhouse gas emissions according to supply planning results.

• To be confirmed as part of detailed design, which of the current applications in the ESG landscape will be replaced by the SAP SFM solution.   It may require a 'parallel' phasing out period of non-SAP applications, which are covered by the SAP SFM solution forward.  

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". 

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: Continue As Is

Currently this data is built up by experts (internally and externally) or sourced from external databases.    There is no one version of the truth.   Syensqo needs to act with its suppliers to reduce Scope 3 emissions to reach Syensqo's climate commitment and support product competitiveness.  The future solution for footprint management in Syensqo needs to be determined as part of Scope 3 aligning with ERP project principles.  

• Lack of integration with S/4HANA.
• Large variety of non-SAP tools.
• Lack of granularity.
• Lack of system and data integrity.
• Not future-proof.

Option B:  SAP Sustainability Footprint Management (SFM)

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

SAP SFM calculates and manages carbon flows across GHG Scope 1, 2, and 3 emissions, integrating with SAP S/4HANA for accurate and efficient emissions calculations.  The solution tracks the flows of product footprints in and out of the business, the materials used to produce it, the packaging and the transportation.  As a solution for transactional carbon accounting it enables more precise and granular tracking of emissions across business operations and supply chains.  SAP SFM functionality is required to:

1. Manage supplier product footprint according to World Business Council for Sustainable Development Partnership for Carbon Transparency (WBCSD PACT), Together for Sustainability (TfS) - chemical company collaborative.
2. Calculate Scope 3 categories on activity level e.g. transport of purchased goods.
3. Calculate product and organisation footprint according to material flow and production network on CO2e (carbon dioxide equivalent) level based on global warming potential (GWP).

Product Capabilities

The capabilities of SAP Sustainability Footprint Management can be broken down as follows: 

1. Acquiring master and transactional data from connected business system.
2. Combine the data with emission factors to evaluate the environmental impact.
3. Calculating of the sustainability footprints in the application.
4. Calculated footprints can be integrated back into connected business systems. 

Business Architecture

SAP Sustainability Footprint Management runs on SAP Business Technology Platform, extracting and integrating data from SAP S/4HANA and other sources to calculate and store carbon footprints, which are then fed back into business processes and will increasingly connect with tools like SAP Sustainability Control Tower and supplier networks for end-to-end sustainability insights and reporting.

Data Acquisition

SAP Sustainability Footprint Management reuses ERP master and transactional data via native integration with SAP S/4HANA or APIs, supports file-based imports and transport datasets, and is evolving to include enhanced cost and emissions integration, as well as connectivity with networks like SAP Ariba and Catena-X for standardized sustainability data exchange.

Emission Factors Management

SAP Sustainability Footprint Management enables the import, management, and AI-driven mapping of emission factors (focused on CO₂e) using ERP and supplier data, integrates LCA datasets from providers like ecoinvent and Carbon Minds, and is evolving toward automated, high-accuracy footprint calculations through primary supplier data exchange and standard-based integrations.

Footprint Calculation

SAP SFMs calculates product and corporate carbon footprints across Scope 1, 2, and upstream Scope 3 (cradle-to-gate) by integrating ERP and supplier data, modelling energy flows and allocations, and defining organisational boundaries, with plans to extend to full lifecycle (cradle-to-grave) coverage.

Energy Flow Model:

SAP SFM calculates both organizational (Scope 1, 2, 3) and product-level carbon footprints using ERP data, emission factors, and energy models, offering complementary methods that Syensqo combines to analyze emissions and identify key drivers.

A Sankey Diagram is the core tool for investigating emission results, offering transparency on input factors, such as purchased energy.  It gives visibility to various levels of detail, including calculation data and formulas, to understand the carbon footprint emissions. The app allows publishing results to connected SAP S/4HANA Cloud or SAP S/4HANA systems.

Sankey-Diagram:

Footprint Analytics

SAP SFM provides built-in analytics dashboards to visualize and drill down into carbon footprints across the value chain, including detailed breakdowns by GHG scopes, transport flows, and emission hotspots, with API integration for external analytical tools.

Footprint Integration

SAP Sustainability Footprint Management integrates calculated carbon footprints back into SAP S/4HANA business processes—such as procurement, inventory, and transportation—enabling users to incorporate sustainability insights into operational and strategic decision-making across the value chain.

Footprints in S/4HANA Monitor Purchase Requisition App:

Option C: SAP EHS Emissions Management

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

SAP EHS Environment Management tracks various aspects of environmental impacts.  It primarily focuses on tracking and managing emissions and pollutants released into the environment.  Whilst only SAP EHS Emissions Management and GHG Emissions Management are relevant for the purpose of this KDD, it generally includes the following components:

• Waste Management (separate KDD)
• Emissions Management (EM)
  • Manages all types of emissions resulting from operation to fulfil legal requirements e.g.
    • Hazardous air pollutants
    • Significant air pollutants (NOx and SOx)
    • Greenhouse gases (GHG)
    • Air or water emissions
• GHG Emissions Management
• Water/Wastewater Management 

Capabilities:

• Compliance management with environmental regulations.
• Monitoring and reporting of emissions data. Required to report on
  • GHG emissions more frequently than monthly

• • Over and above GHG equivalents i.e. other major/mandatory GHG emissions e.g. 
    • CO2 (carbon dioxide)
    • CH4 (methane)
    • N2O (nitrous oxide)
    • HFCs (hydrofluorocarbons)
    • PFCs (perfluorocarbons)
    • SF6 (sulfur hexafluoride)
    • NF3 (nitrogen trifluoride)
  • Other kind of emissions beside GHG emissions.
• Flexible and auditable calculator for hazardous air pollutant and GHG emissions inventories.
• Calculates and aggregates emissions through data transparency and monitoring.
• Various options for collecting data and sampling to be used for compliance tracking and emission calculations.
• Data collection from various sources such as manufacturing processes, energy consumption, and waste management.
• Emission forecasting tools, real-time and analytical.

SAP Standard Integration:

SAP Standard Process:

SAP EHS Emissions Data supporting the process:

• Compliance requirements: The calculation of GHG emissions should be set up according to regulatory requirements.  These regulations contain regulatory lists with tables for global warming potentials, average high heating values, general emission factors and equations.  Using the compliance requirements optimises the setup of calculations for emission data.  It allows to reuse the setup (emission factors and equations) for multiple scenarios.
• Compliance scenarios: It is recommended to create a compliance scenario for each GHG relevant activity. The compliance scenario allows to link all relevant objects for the emission calculation and to centralise the setup of all needed activities.
• Location hierarchy: The hierarchy for GHG emissions should consist of minimum locations representing the company, countries, and plants.  The assignment of the location properties (like company code, org, unit, cost center, etc.) should be driven by the logic of the required report output.  The assignment needs to be maintained for the levels of the location hierarchy that will be queried for the GHG emissions calculations.  On top of the location hierarchy is a location for the company, that is assigned to the company code.  Underneath the company there are locations for each country with the company code and country assigned.  Plants and sites with the company code, country code and the plant id assigned are below their country of location.   

• Data classifiers (standard and additional):  Standard classifiers include scope 1 to 3.  Additional classifiers could be e.g. energy carriers, carbon origin
• Activities: based on listed substances, unit of measures (t), data classifiers, activities, periodicity. 

Example:

It is possible to transfer emissions data from the recorded activities in SAP EHS Management, Environment Management (SAP EHS) to SAP Sustainability Control Tower to use it in GHG recordings.  When the emission data from SAP EHS is imported, SAP SCT uses the following information to read the data:

• The standard classifiers defined in SAP EHS Management, environment management, for example the data classifier Scope 1.
• User-defined classifiers created in SAP SCT for activity types e.g. heating.

These classifiers are then mapped onto the categories available in SAP SCT to enable further processing of the data.

While SAP EHS effectively supports Scope 1 and 2 emissions and selected upstream Scope 3 calculations at an aggregated level, it has limitations in calculating granular, product-level Scope 3 footprints across the full value chain. In particular, EHS does not natively support detailed lifecycle-based allocations, supplier-specific footprint integration, or cradle-to-grave product emissions modelling. These capabilities are instead addressed by solutions like SAP Sustainability Footprint Management, which are designed for product-level carbon accounting and full Scope 3 coverage.

Option D:  SAP Sustainability Footprint Management (SFM) and SAP EHS Emissions Management - combination

In standard SAP the holistic Sustainability solution for Footprint Management combines various components in its architecture, which are intrinsically integrated.  Whilst some of these components may be implemented in isolation, the Syensqo Sustainability Roadmap requires a combination of tools to create 'one truth'.  It supports Syensqo's long-term goal to adopt a mainstream integrated solution for carbon footprint management and supports achieving group targets by understanding where emissions come from at operational, procurement and market level. 

SAP SFM can be supplemented by the integration with SAP EHS Emissions Management with SAP SFM (see SAP SFM Product Capabilities and Business Architecture diagrams).   There is no additional SAP licence requirements (SAP licence same as SAP EHS Waste Management, covered by separate KDD).   The recommendation is for the business to implement SAP EHS Emissions Management for Scope 1 and 2 as well as SAP SFM to cover current and future Scope 3 requirements from the outset as part of an integrated ERP solution.   Please refer to option B and C for capabilities and benefits for each solution.

SAP SFM can be integrated with SAP EHS Management, environment management, to read direct and indirect emission data to calculate the corporate and product footprints in a legal and regulatory compliance driven manner.

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.

1. 2023cSyensqo Annual Integrated Report
2. McKinnon Report
3. SAP Roadmap Sustainability Footprint Management (SFM)

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