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All Aboard for COP26

COP26, otherwise known as the UN Climate Change Conference of the Parties is starting next week. COP26 will be the largest conference on climate change, and is being described as a last chance to get governments worldwide to reach an agreement on each country’s contribution to reducing carbon emissions.

The first of a series of climate change tipping points is expected to be reached by 2030, which could according to Yale School of the Environment ‘fundamentally disrupt the global climate system’ .

On November the 4th 2016, building on the previous UN Framework Convention on Climate Change in 1992, signatories from UN member states agreed to “undertake ambitious efforts to combat climate change and adapt to its effects” in the Paris Agreement. Part of that agreement was for each country to put forward nationally determined contributions (NDCs). These were voluntary targets for reducing emissions and for investment in renewable energy infrastructure, which were to be increased over time. The regular Conference of the Parties was intended to keep signatories on track to achieve NDCs towards reducing the global carbon footprint.

COP26 was originally scheduled for 2020 but delayed due to Covid-19. The conference lasts two weeks so the period in which these changes must be implemented is only just over 8 years.

Industrial Sized Contributions

In a previous article IgniteSAP pointed out that although governments are under pressure to meet these targets, the main effort of doing so will be achieved through the efforts of private citizens and through changes in the way we run commerce and industry. This is not just an ethical issue of balancing how the actions of companies in the developed world affect communities in other regions and in later years: this is a necessary material change in the way we live our lives in order to survive as a species.

As a result of negotiations at COP26 there will be new legislation in many countries that will put in place laws and regulations that ensure governments can demonstrate they can meet new climate and environmental targets. In order to comply with new rules governing how businesses operate corporations will be legally obliged to make changes to reduce their overall carbon footprint, as well as ensure that they are not harming the natural environment through waste energy and material, and pollution.

End-to-End Sustainability Transparency

IgniteSAP has suggested that ERP systems like SAP provide the means to measure, analyse and adapt business processes to these new conditions. The Industry 4.0 goal of end-to-end transparency which is applied to economic transactions, and to the manufacture and distribution of products, can equally be used to ensure compliance with new legislation on climate change and environmental sustainability.

The whole concept of ERP systems is geared toward efficiency as much as productivity: and as a consequence, emphasis on efficiency is the means by which companies can reduce their carbon footprint across the organisation, as well as reduce waste products and energy.

SAP Products for Sustainability Targeting

For their part SAP have improved existing software products in this regard and provided specific products which are calibrated to achieving the same ends. S/4HANA Cloud now has embedded sustainability metrics to allow users to compare products and services, along with material flows and usage.

SAP Supply Chain Management provides an excellent way to track the carbon footprint of the extended business network through the oversight of partner organisations and other suppliers.

SAP Business Ecology Management is a new product that allows small to medium-sized businesses to report with confidence on their carbon footprint. This can be a great way to appeal to new customers who are looking to assess their own carbon footprint through the products and services they use. Changing the carbon accounting behaviour of SMBs is particularly important as they make up the vast majority of the economy.

SAP Plastics Cloud collects data across the plastics supply and recycling chain, and allows users to buy recycled plastics using the Ariba network in order, eventually, to eliminate the use of single-use plastics in business processes.

SAP Concur now has the ability to track carbon footprints associated with business travel, and SAP solutions for renewable energy schemes are helping to increase the efficiency and profitability for renewable energy companies worldwide.

The Green Economy

The green economy, according to SAP’s lead for product engineering Thomas Saueressig, is among the fastest growing sectors and is projected to grow 35% each year.

IgniteSAP has pointed out that not only will IT consultancies be looking to provide services to help implement new greener ways of operating, but a new class of IT consultant will emerge over the next five years. IT-based corporate sustainability consultants working with ERP systems like SAP will have a central role in ensuring that companies are able to meet their legal and ethical requirements

In May this year IgniteSAP reported that SAP and Accenture announced they are expanding their collaboration on helping companies through the process of making these changes, which are exemplified by the UN Sustainable Development Goals. By creating a combination of SAP technology with Accenture’s sustainable services, these partners will co-innovate solutions to facilitate companies in achieving the goals of de-carbonisation of their supply chains and the establishment of business practices that promote a circular economy.

Deloitte now offers D-Carb sustainable supply chain planning which leverages SAP IBP (Integrated Business Planning) software in combination with GHG emissions data. This integrates direct and indirect carbon footprint data from purchased materials and energy, production activities and transportation so companies can accurately assess carbon footprints along the value chain.

PwC has recognised the importance of sustainability issues and how they now relate to the core strategy of many businesses. Along with a service designed to help corporations reach net zero, they offer advice and support on developing sustainable business strategies, including: assessments of a company’s sustainability-related risks and opportunities, senior management and board level workshops and learning programmes, sourcing and supply strategies, and the development of progress measurement systems.

Similar initiatives and can be found at many of the top IT consultancies, and most of them are now offering services aimed at helping commerce and industry to meet their own existing sustainability targets. These will be updated as legislation is brought into effect.

Fundamental Change

The necessity for every individual and every business to change their behaviours fundamentally if the world is to avoid irreversible climate change means that every industry will be forced to adapt.

Add to this the IT infrastructure required to facilitate the change in energy provision, public transport, international shipping, smart cities, intelligent agriculture, and the circular economy, and its easy to understand why the change needs an army of highly qualified, highly skilled and creative professionals to implement it.

Sustainable Development vs “Sustainable Development”

Governments (even progressive ones) are naturally conservative and want to preserve the status quo. They are equally prone to confirmation bias, and perpetuating stability: as this is what had worked before. They need to promote stable growth and the assumption has been that this requires an ever-increasing input of resources. Perhaps some politicians believe steady growth is what is needed to be sustained when referring to “sustainable development”.

At the same time in the majority they are aware now of the need for fundamental change, but they don’t want to create chaos in the process of bringing it about. This is the reason for their slowness to act.

New Ways of Creating Growth

Commerce and industry also require stability and steady growth, but at the heart of industry is a need to innovate and create new ways of creating growth: not by an ever increasing amount of resources, but with new ideas and new processes. This is fuelled by the infinite resource: human ingenuity.

Information Technology and its creative application will be the means for humanity to achieve sustainable development goals: not only by chasing an ever-receding horizon of efficiency, but making new horizons.

Reframing the Debate

At the bottom of the contradiction of attitudes toward sustainable development is the phrase: which can be interpreted as to sustain and to change, which seems to refute itself. Clearly it referred originally to the maintenance of supply of resources in a way that does not ultimately cut off supply (through cataclysmic climate change), but the meaning has become vague through over-use.

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After COP26 we will need to reframe the debate, and put the emphasis on the act of creation. The primary way of doing so is to propagate the seeds of change: the education in, access to, and application of technology and information systems in such a way that humans can provide for themselves in perpetuity.

If you are curious to know how you can work with the best placed companies to help others bring about reduction of carbon footprints and reach sustainability goals then get in touch with IgniteSAP to understand more.