NTT DATA Business Solutions
Elmer Kramer | 5 října, 2022 | 6 min.

Sustainability as a Hard KPI: This Is How IT Can Help

Did you know that you can calculate the CO2 impact of a product with just a few clicks? In this blog post, our colleague from NTT DATA Business Solutions Benelux, Elmer Kramer, explores the latest technology that does this for you.

sustainable consumer choice through SAP product footprint management
measuring the carbon footprint of tomatoes with SAP solutions

Which Tomato Emits more CO2?

Put yourself in the shoes of your end customer, the one who will soon buy your products in the supermarket. Picture yourself in the vegetables section with two tomatoes in your hand. On the labels you can see where they come from – one was grown in a local greenhouse, the other was shipped to the supermarket from the open Spanish soil.

Because you want to eat more sustainably, you want to know which choice has the smallest CO2 footprint. It would be useful if the packaging or sticker also had that information in addition to the country of origin. Now that rarely happens, even though more and more customers are eager to switch to sustainably sourced products. In fact, in 2020, Dutch consumers spent a total of 7% more on sustainable food than in 2019. Supermarkets even saw an increase of 21%.

Sustainability as a Hard KPI

Data on CO2 emissions are difficult to obtain. And, therefore difficult to gain insight into for end customers in the supermarket. But it is also not easy for employees in a supply chain, such as buyers, to gain insight into the CO2 impact of a product or promotion. Almost every management board has sustainability on the top of their agenda but making the numbers on it transparent is complicated. That is why you hardly ever see data about CO2 on products in the shops.

But sustainability as a hard KPI? And unfavorable auditor’s report because you can’t provide insight into your CO2 emissions? Soon that will become a reality. For example, the EU is making it mandatory with future ‚Corporate Sustainability Reporting Directive‘ (CSRD) legislation. But also, because of a growing social awareness that our footprint on the world should be a lot smaller. Making CO2 impact transparent used to be quite difficult. But the good news is that you no longer have to deal with separate Excel lists or complicated calculations. IT can do the math for you.

Bottlenecks in Food & Agriculture in CO2 Footprint Analysis

A survey among our own Food & Agriculture customers shows that analyzing CO2 emissions when growing, purchasing, or producing a product isn’t happening yet. The biggest stumbling block they experience in getting there? The considerable time and effort required to get the correct figures.

It takes a lot of time to collect all the data you need to get a correct calculation. The information is mainly contained in Excel lists, emails, and other online and offline documentation. Because all the necessary data must come from various sources, it costs employees in various layers of an organization valuable time to gather all the information. Time that they could be spending on core processes.

Processing and analyzing the CO2 emissions of various products is also a bottleneck. It is often done manually, and the chance of inconsistent data (and even errors) is therefore high. In addition, there is almost no validation possible, making it difficult to guarantee the correct data.

Technology Closely Follows Legislation

But there is good news. Besides the fact that legislation on sustainability is getting stricter and consequently a more pressing matter, software developers are not sitting idle either in coming up with solutions. We see a shift in sustainability ambitions. And it is no longer solely the domain of the sustainability officer. Thanks to the latest technology, you can easily import, calculate, analyze, and send the correct CO2 data back into your own organization, so that every department benefits from it.

You can provide buyers with CO2 data so that they can purchase smarter and more demand oriented, for example. During production or in the warehouse, you can add CO2-labels to your products with the information that consumers want. And in the finance department you can add the data to the report that the accountant checks.

Sustainability Data Is Often Already in Your ERP

However, there is a big question: In addition to adding logos of sustainable quality marks and certificates on packaging, exactly how do you show the CO2 impact of your product? Well, with hard numbers of course. Whereas it was previously a lot more difficult to obtain those numbers, you can get them now faster, and more accurate than you think.

Did you know that the basis for sustainability data is often already in your ERP system? With a relatively simple solution, you can extract these figures from your system and measure them for analysis, and then put them into a report.

Together with Edwin Berendsen, Elmer Kramer tested SAP Product Footprint Management in combination with the SAP S/4HANA ERP system. They imported measured values as emission factors from the ecoinvent database, but there are more standards that you can use as a measure. It contains information about the environmental impact of products and processes worldwide. You can also – if you already have this – import your own Excel list with impact per product.

The Benefits of SAP Product Footprint Management

With a promising roadmap for this solution and interesting results from the first demos, we can already share with you some benefits of SAP Product Footprint Management:

  • Accurate, validated, high-quality data that can be retrieved in real time.
  • Validated basis for reports that are also auditable.
  • Saving time, money and FTEs through the automatic data analysis and reduce the risk of errors.
  • Chance to act on CO2 data, to make better choices to achieve CSRD goals and based on this to start finetuning your CO2 footprint.
  • Analyzing data, outlining what-if scenarios in the future and thus providing insight to action.
  • Recognizing contaminated master data via logs and red flags.
  • Built-in integration with SAP S/4HANA and SAP ECC to drive and improve operations.
  • Simplified import of emission factors that are important for reporting and which can be included into further calculations.
  • Monthly, quarterly or yearly calculations and easily build up a CO2 history to benchmark efforts.
  • Relatively short implementation time.
  • Further product expansions like the possibilities to gain insight into the footprint of parts lists, transport, PLM processes, and more.

Your Customers Also Have to Report Soon

In the EU due to the upcoming CSRD regulations it will be a pure necessity to be able to report error-free and auditable on your CO2 emissions, giving you reason enough to work on this Product Footprint Management solution.

However, besides the fact that you want to obtain approval during your annual audit, becoming more transparent on your CO2 footprint is also a great opportunity to bind your customers and consumers to your brand. Especially since there’s a growing consumer awareness around buying more sustainable products. I think that’s reason enough to turn sustainability into a hard KPI in your business.

And let’s face it: your customers will soon have to report on their CO2 impact and the products they purchase from your organization as well. So, which tomato are you going for?

Curious what the solution looks like? Get in contact and ask your questions!

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