Leading enterprise resource planning (ERP) software company SAP announced today the launch of its green ledger initiative, aimed at providing ledger-based accounting for carbon, enabling companies to track and manage emissions with actual and auditable data, and to communicate carbon data with supply chain partners.

Unveiled at its annual SAP Sapphire conference on Tuesday, the new initiative includes the launch of SAP Sustainability Data Exchange, a new solution enabling enterprises to exchange standardized sustainability data with partners and suppliers, and an update to SAP’s carbon footprint accounting solution, SAP Sustainability Footprint Management.

According to a statement released by SAP, the new initiative comes as companies require better accounting for their greenhouse gas (GHG) emissions to address the needs of investors, shareholders, consumers and regulators, with “companies currently use outdated tools and disconnected processes to account for the emissions in their operations and across their supply chains.”

SAP added:

“Companies also find it very difficult to share emissions data with their supply chain partners. Emissions occurring in a company’s supply chain, called Scope 3 emissions, are outside the company’s direct control but represent up to 90% of a company’s carbon footprint.”

Gunther Rothermel, Global Head of SAP Sustainability Engineering said:

“Companies today estimate that 30 – 40% of their carbon emissions data is not accurate. The only way companies effectively reduce emissions and measure their progress is by having high quality data they can trust.”

SAP’s new Sustainability Data Exchange application allows companies to request and exchange carbon data across supply chains, including sharing of actual Scope 3 product carbon footprints. The solution utilizes the carbon data interoperability standards established by the Partnership for Carbon Transparency (PACT), which allows different emissions and accounting technology solutions to connect and share information. The new solution is currently in beta, with general availability planned for Q3 2023.

SAP Sustainability Footprint Management enables the measurement of auditable carbon footprints at the product and corporate level, with features including the import of footprint data received from suppliers, mapping of emission factors to business data, calculating and monitoring data in graphical format, energy flow modeling for production lines and facilities, and footprint analysis across the company and value chain, among others. The new update is planned to be available in June 2023.

Rothermel added:

“Today we know that carbon also equals money. In business, decisions from the C-suite to the shop floor are often taken without considering environmental costs, which become apparent long after decisions are made, hurting financial optimization. The green ledger allows these costs to become visible up front, and makes you proactively consider critical decisions related to your value chain.”