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How Can Companies Achieve Net Zero Emissions?

Decarbonization must be implemented as soon as possible, especially in manufacturing. Companies need to collect the necessary data, report CO₂ emissions transparently, and use the necessary levers to reduce them. The right technologies and methods are crucial for a sustainable transformation towards a carbon-neutral company.

Climate change is one of the biggest challenges of our time, making the reduction of greenhouse gases a key political issue. The goal: to limit global warming to 1.5 degrees by 2050. This was agreed by 195 countries in the Paris Climate Agreement. This can only be achieved with comprehensive climate neutrality, a “net zero”. Numerous countries have already defined interim targets for this. For example, the German Federal Climate Protection Act (KSG) stipulates that greenhouse gas emissions must be reduced by at least 65% by 2030 compared to 1990 levels. For the industrial sector, this means that decarbonization must be implemented at a rapid pace – because it will determine the economic success and future of subsequent generations.

Record & Report

For companies to achieve their sustainability goals and make a valuable contribution to protecting the planet, individual measures are not enough. With cbs.zero, we have developed a framework that enables sustainability challenges to be tackled in a targeted manner. First, we establish a holistic view of the current situation.

In line with the framework, the first step in decarbonization is to collect data on the relevant metrics along the value chain and make it usable for analysis. The next step is to ensure transparent communication of sustainability targets and progress to relevant stakeholder groups such as employees, investors, customers, partners and the public.

Data on CO₂ emissions are generally recorded and reported according to the Greenhouse Gas Protocol with a categorization of “scopes”. The development of the GHG Protocol is coordinated by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). The GHG Protocol makes it possible to classify the various sources of greenhouse gas emissions in companies and organizations and is one of the most widely used standards for preparing greenhouse gas reports.

  • Scope 1 (direct emissions): This includes direct greenhouse gas emissions that occur within the control or ownership of a company. Examples include emissions from company-owned vehicles, heating systems or industrial processes.
  • Scope 2 (energy-related emissions): These are indirect emissions caused by the generation of purchased energy. This primarily includes emissions caused by electricity generation in power plants that supply energy to the company.
  • Scope 3 (inindirect emissions): These are greenhouse gas emissions that are outside the direct control of the company. These can be emissions from upstream and downstream supply chains, business travel, product use, waste disposal and other activities.

Collecting emissions data using manual methods, Excel or estimated values will soon no longer be enough. Digitalization and suitable software solutions are needed so that data can be automatically collected, reported and effectively used for decarbonization. Until now, a major obstacle to the development of such solutions has been the lack of mature legal requirements for reporting. However, this is changing rapidly: the European Union’s Corporate Sustainability Reporting Directive (CSRD) will gradually become relevant for all companies from around 2024 and will also be transposed into law of each European member states.

SAP plays an important role in the field of sustainability software solutions thanks to its ERP system integration and direct access to processes and data. In future, a new generation of cloud-based SAP products can significantly reduce the burden on companies in terms of precise data collection and the management of sustainability activities and support them in meeting their reporting obligations in a legally compliant and efficient manner.

Important SAP ESG solutions at a glance

SAP Sustainability Footprint Management

SAP Sustainability Footprint Management is a solution for calculating and managing carbon flows with a high level of granularity at company, process and product level for Scope 1, 2 and 3 emissions. An expansion to include the recording of water and land use is planned.

SAP Sustainability Control Tower

With the SAP Sustainability Control Tower, companies can monitor key ESG figures (environmental, social and governance) with a dashboard and take them into account for management reporting purposes.

Green Ledger

With the Green Ledger concept, SAP uses the established structures and methods of the financial sector and records environmental data in the accounts. This enables insights and effective decision-making in business processes and the implementation of transaction-based CO2 accounting.

SAP Responsible Design and Production

This SAP product enables a more sustainable design of products and helps companies to meet EPR (Extended Producer Responsibility) obligations, such as plastic taxes and obligations to optimize material selection.

Improve & Innovate

Once a solid data and reporting basis has been created, companies can analyze their performance and identify and implement effective measures to reduce CO₂. For industrial companies, a large proportion of emissions are naturally attributable to the value chain – so this is where the key to achieving climate neutrality lies. Companies will fundamentally rethink business models and incorporate sustainability into the entire lifecycle of products – from development, production, use and finally disposal or complete recycling.

cbs-zero

Scope 1 emissions are under the direct control of the company and can be reduced in its own production. For example, cbs subsidiary Trebing + Himstedt is working with customers to introduce end-to-end, digitized production processes. This is less about simply saving paper: advantages such as optimized and context-situated worker guidance and direct, error-free data feedback create efficiency and prevent the waste of valuable resources.

Scope 2 emissions can in turn be reduced by purchasing electricity from renewable energy sources. A significant proportion of the carbon footprint is attributable to the incoming supply chain, i.e. Scope 3: Before a component arrives and can be used, for example, CO₂ is generated from the extraction of raw materials, through processing to transportation. As these emissions are not under the direct control of the company, this will primarily influence procurement strategies. The price that the environment “pays” will then also be decisive. Conversely, this also means that sustainable products and goods will become more attractive and companies will be able to secure decisive competitive advantages.

Even if not every law has been passed, companies must tackle decarbonization at an early stage. Action must be taken. Decarbonization is not just a challenge – with the right approach and technologies, it enables real competitive advantages and can be achieved in a timely manner.

Your Contact

Lars Neitzert
Senior Manager
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