ESG: How to Do It

Governments across the globe are adopting ambitious targets to support zero carbon emissions. From the European Union to the Kingdom of Saudi Arabia and the United Arab Emirates, sustainability has become a worldwide priority. This rapidly growing field merges environmental conservation with financial technology, where carbon credits are emerging as a new form of currency.

At the forefront of corporate sustainability are SAP ESG systems that enable businesses to streamline their environmental, social, and governance efforts. How can companies effectively implement an ESG system using SAP? Here’s a step-by-step guide.

Phase 1: Prepare and Explore

Duration: 1–2 weeks

The first step is laying the groundwork for a successful ESG system. This involves thorough preparation, data assessment, and defining the system architecture.

Key Objectives

• Collect and validate ESG data for sufficiency, consistency, and storage readiness
• Identify relevant SAP ESG software products and data sources
• Establish the target system architecture, project schedule, and charter

Essential Activities

• Conduct workshops with stakeholders
• Perform fit-gap analysis to identify the most suitable SAP tools and products
• Select relevant SAP tools and products for implementation

Resources Required

From the customer side:

• Business lead (e.g., CFO or COO)
• Technology architect and project manager
• Business subject matter experts

From the vendor side:

• Solution architect and project manager
• Technology and business process consultants

Phase 2: Realize

Duration: Approximately 4 weeks

This phase transitions from planning to execution, with a focus on configuration, testing, and preparing the solution for demonstration.

Key Activities

1. Technical and functional setup:

• Configure the SAP ESG solution and establish connectivity between SAP S/4HANA and the SAP Business Technology Platform (BTP), including Cloud Connector
• Replicate master data, import emission factors, and enable API connectivity
• Document the configuration and setup process 

2. Solution testing:

• Perform solution testing, validate calculation methodologies, and integrate data from emission sources.

Deliverables:

• Final system demo showcasing success criteria
• Documentation of findings, test results, and user guides
• Recommendations for ongoing system improvements

Phase 3: Finalize

Duration: Approximately 2 weeks

The final phase transitions the project from testing to full deployment. It emphasizes critical acceptance testing and post-implementation support.

Key Steps

• Conduct acceptance testing to validate system performance
• Transition to go-live and initiate hyper care support
• Collect customer feedback and explore opportunities for future needs

Adaptability for the Future

As businesses transform, ESG systems must adapt to changes in business models, supply chains, manufacturing methods, and evolving regulations.

Why SAP ESG?

Implementing an ESG system on the SAP platform offers businesses significant advantages, including:

• Scalable and periodic calculations of product footprints across the lifecycle
• Robust analytics for actionable sustainability insights
• Reduced total cost of ownership (TCO) and accelerated time-to-value

ESG encompasses more than just emissions and waste management. It also includes workplace safety, incident management, and occupational health, providing a holistic approach to corporate responsibility.

To learn more about ESG and SAP Sustainability solutions at IBA Group and explore how these technologies can support your sustainability journey, please click here.