Today’s sustainability landscape looks more like a sprawling metropolis with no building design than it does well-intentioned regulations threaded together to provide transparency and visibility to consumers, governmental agencies, and investors. The University of Oregon Sustainability Leadership Program tracks nearly 50 standards, methods, regulations, and approaches that an organization, based on its particular operating location, industry segments, and communities, may be obliged to follow and report on.

The immediate reporting introduction for those companies operating in the US is the Environmental Protection Agency (EPA) Mandatory Reporting Rule (MRR, defined in 40 CFR 98) which is designed to collect greenhouse gas (GHG) information, including specific emissions from specific industry participants and a list of other industry segments that may apply. Unless your company is squarely in the crosshairs of the MRR filing requirements — called “all-in” source category companies, such as aluminum manufacturing — it may be difficult to determine your actual reporting requirement. Further complicating the lack of clarity is the impending deadline of January 30, 2011, to submit certification of representations to the EPA. The EPA has created a portal called the electronic Greenhouse Gas Reporting Tool (e-GGRT), which organizations can use to capture their initial GHG tallies and provide them, as needed, to the agency. 

Note
According to the EPA Web site, the mandatory filing window for “all-in” source category companies begins on March 31, 2011. It also lists industry segments considered “all-in.”

As such, it is important for organizations, particularly for those “all-in” source category companies and those organizations operating in their supply chains, to begin to gain visibility into their carbon footprint. This provides visibility into their specific position in the exposure of dangerous emissions as well as the use of natural resources and toxins in their day-to-day operations. Once this information is known, the organization and its supply chain can begin proactive measures to address reduction of GHG emissions and its overall carbon footprint. I’ll start by explaining some ways you can assess sustainability impacts in your organization, and then go into how SAP Carbon Impact OnDemand helps you monitor these impacts with various on-demand reporting tools.

Assessing Sustainability Impacts in the Organization

Reduction in carbon emmissions is not only good for the environment, it is required under the guidelines of the EPA MRR. Further, you can obtain marketing and investor management benefit from the introduction of sustainably conscious business practices in the organization. Figure 1 illustrates the major components of both influence as well as social contribution driving the use of organization resources. These commonly assessed and baselined components in sustainability assessments include:

1. Energy: The movement towards 100% renewable energy, including self-developed (e.g., grid-neutral) sources owned by the company
2. Industry: Engagement in the participating industry dialogue to help the industry as a whole transform into new business practices, both green and profitable
3. Products and services: The focus on long-term products and services that are profitable, reusable, and meet real market needs (versus passing commercial fads)
4. Materials: Developing sources of inputs and materials that are reusable, locally grown or produced (to reduce transportation carbon effects), and sustainably harvested
5. Waste stream: Using life cycle analysis (LCA) techniques, can a closed-loop process be identified in which the inputs going into the product can be renewably disposed, creating a zero-waste scenario? For example, can the outputs be used as inputs to another commercial process in renewable form?
6. Community and economy: Doing all of the above in a economically viable and efficient manner over time, so that the organization can provide employment and economic benefit, support local communities and charities, and be a good corporate neighbor

Figure 1

Sustainability program impact assessment framework (source: University of Oregon, Sustainability Leadership Program)

Many calculators are available to determine the relative position of organizations against multiple key performance indicators (KPIs) and emerging industry baselines. You can use SAP Carbon Impact OnDemand as part of the assessment process to evaluate the current position of an organization’s carbon footprint as well as to provide a benchmark monitoring tool to assist the organization in achieving reduced GHG emissions. I’ll show you how to get started by completing a carbon self-assessment using a free online tool available with SAP Carbon Impact OnDemand.

Use SAP Carbon Impact OnDemand to Sketch Impacts, Goals, and Key Indicators

With mandatory reporting for many organizations already under way, chief operating officers, chief sustainability officers, compliance managers, and risk managers are seeking new ways to not only report on carbon emissions, but also to track those emissions and monetize them in the growing cap-and-trade market already under way in the EU. Mitigation also becomes important during this time, as action plans to reduce the overall emissions and carbon footprint can mean cost reductions and penalty avoidance.

SAP Carbon Impact Carbon Hub is an ecosystem management tool that allows users to integrate various data sources (including SAP ERP, non-SAP ERP, spreadsheets, and other formats) with key reference data developed from industry standards, best practices, and reduction project templates. SAP Carbon Impact Carbon Hub provides three distinct user functions:

1. Assess carbon impacts, including GHG inventory management, root cause product assessments, supply chain carbon footprint, and verification and reporting compliance
2. Analyze carbon impacts, through the use of role-based dashboards, benchmark data, supply chain spend optimization, and reduction project analysis (for example, how effective are current carbon reduction efforts in the organization?)
3. Act to report and mitigate carbon impacts, by offset management, disclosure reporting, operational source reporting, and goal setting

To get started, create a login ID and password for the SAP Carbon Impact OnDemand Web site at www.sap.com/carbonimpact (Figure 2). Once you have logged in to the site, you have several areas of content and reference including case studies and testimonials, role-based “day in the life” demos, benchmark self-assessments, and other references and tools. Behind the SAP Carbon Impact OnDemand application are the Carbon Hub capabilities and infrastructure.

Figure 2

Landing page for SAP Carbon Impact OnDemand

You can find interactive video demonstrations, educational issues surrounding sustainability, and testimonials of SAP customers on the Demos or References tabs, or by selecting a thumbnail image from the main landing page (Figure 3).

Figure 3

Interactive instructional and reference videos available on SAP Carbon Impact OnDemand

For a high-level perspective on where your organization stands relative to its industry peer group, select the Benchmark tab from the landing page to arrive at the main screen for the Carbon Management Maturity Matrix. While this survey is not intended to serve as any comprehensive reporting response, it provides you with a sense of the relative position of your organization based on a set of simple management questions (for example, are you managing your carbon initiative?). Figure 4 illustrates the start page for the survey.

Figure 4

SAP Carbon Impact OnDemand survey start page

Once you have taken the survey and indicated your specific industry segment, the survey tool provides you with a relative position based on your feedback. A professional services firm conducted a self-assessment with this survey and was provided the results found in Figure 5.

Figure 5

SAP Carbon Impact OnDemand results on maturity matrix and high-level requirements

Once you have completed the survey, you can take a variety of standard next step items to understand what payback scenarios and KPIs are of interest to monitor based on the Move the Needle Analysis and Return on Investment (ROI) calculators shown in Figures 6 and 7, respectively.

Figure 6

SAP Carbon Impact OnDemand Move the Needle Analysis showing typical KPI levels

Figure 7

Based on survey responses, the ROI calculator determines a rough payback range

Interested users may then undergo a formal Request for Proposal (RFP) Builder. You can access it from the SAP Carbon Impact OnDemand landing page by selecting the RFP Builder tab. This is a more comprehensive questionnaire that delves into how your information is stored and collected, what reports may be required based on your industry position, and what your typical resource needs would be to perform carbon reporting. The result is shown in Figure 8 and serves as the basis for planning an implementation project for SAP Carbon Impact OnDemand Carbon Hub in your organization.

Figure 8

Example RFP Builder response as generated by SAP Carbon Impact OnDemand

William Newman

William Newman, MBA, CMC is managing principal of Newport Consulting Group, LLC, an SAP partner focused on EPM and GRC solutions. He has over 25 years of experience in the development and management of strategy, process, and technology solutions spanning Fortune 1000, public-sector, midsized and not-for-profit organizations. He is a Certified Management Consultant (CMC) since 1995, qualified trainer by the American Society of Quality (ASQ) since 2000, and a trained Social Fingerprint consultant in social accountability since 2012. William is a recognized ASUG BusinessObjects influencer and a member of SAP’s Influencer Relations program. He holds a BS degree in aerospace engineering from the Henry Samueli School of Engineering and Applied Science at UCLA and an MBA in management and international business from the Conrad L. Hilton School of Management at Loyola Marymount University. He is a member of the adjunct faculty at both Northwood University and the University of Oregon with a focus on management studies and sustainability, respectively.

If you have comments about this article or BI Expert, or would like to submit an article idea, please contact the editor.

You may contact the author at wnewman@newportconsgroup.com.

If you have comments about this article or publication, or would like to submit an article idea, please contact the editor.