How is SAP Climate 21 meant to reduce CO2 emissions?

Reducing carbon dioxide emissions and improving sustainability has become a priority for many companies. SAP's Climate 21 program is meant to help companies achieve that goal.

SAP's Climate 21 program will incorporate sustainability principles into the company's product line. SAP Executive Board member Thomas Saueressig is leading the program.

Climate 21 will help businesses prepare for a shift toward sustainability driven by market-based incentives and choice, Saueressig has said in press materials.

Sustainability incentives have been gaining momentum.

In 2017, Walmart announced its aspirations to reduce overall CO2 emissions. That effort, codenamed "Project Gigaton," largely focuses on reducing the carbon footprint of the company's supply chain. Since then, numerous other companies have launched similar initiatives. Customers, employees and even investors are driving incentives for companies to make sustainability a corporate objective.

In June, SAP announced their first-stage product release for Climate 21, Product Carbon Footprint Analytics, which will help companies to measure the level of CO2 emissions associated with each of their products, production facilities or profit centers. SAP has already taken its first customer live with the new product. In June, global food and beverage giant Döhler announced its successful rollout of the carbon analytics platform.

In 2021, SAP will integrate Carbon Accounting into its Finance module. Over the next three years, the company will incorporate sustainability principles into its operations and supply chain applications, product design and business networks platform.

In this respect, SAP's Climate 21 program is less about an individual product than it is about weaving sustainability into the entire SAP product portfolio. Just as an item's cost, current valuation and selling price are relevant across multiple modules within the ERP system, so too will sustainability metrics be ubiquitous throughout product design, planning, production, analytics and more.

Carbon accounting has been in the works for over a decade. As early as 2011, the United Kingdom began to require larger companies to report CO2 emissions. Since then, national and regional governments around the world have adopted mandates that will further drive the need to incorporate sustainability into everyday business processes. Before long, carbon accounting is likely to emerge as an important subspecialty among ERP experts, alongside things like costing, supply chain planning and revenue recognition.