- Over 70% of many companies’ carbon footprint comes from scope 3 emissions, which are largely related to the supply chain.
- On average, 250 tier one suppliers are involved in an automotive manufacturer's supply chain, with Multi-tier networks including up to 18,000 suppliers.
- 34% of major global companies have set net-zero targets, but 93% are at risk of missing these goals without greater effort.
- Only 10% of companies have a comprehensive understanding of their greenhouse gas emissions across their value chain.
Current challenges in data verification include low trustworthiness due to lack of verifiability, fragmented and non-interoperable systems, and hesitancy in sharing sensitive data. New protocols and common standards, along with a unified technology infrastructure, are required for secure and efficient data exchange.
Key ambitions are to move beyond distrust (such as greenwashing), enhance quality assurance, improve data accuracy and consistency, and support sustainability goals.
The framework consists of:
- Verification/Validation of Incoming Data: Includes quality validation, benchmarking, outlier and supplier comparisons, and commodity/historic comparisons.
- Quality Assurance/Trustworthiness: Involves data reviews, management workflows, auditing, certification, and cryptographic audit proofs.
The structure supports reliable data flows between multiple supply chain tiers, from upstream suppliers (Tier-n, Tier-2) to final recipients (Tier-0).
As global pressure intensifies for companies to disclose the environmental impact of their operations and products, several major regulations and initiatives have emerged, each with varying scopes and requirements:
Key Regulatory Drivers:
- CSRD (EU): Requires companies in the EU to disclose greenhouse gas (GHG) emissions and other non-financial information at the corporate level, phased in by company size starting in reporting year 2024.
- SEC (US): All companies registered with the SEC must report using similar protocols, with phased implementation starting in reporting year 2023.
- CBAM (EU): Targets companies importing selected high-emission products into the EU, with reporting starting in October 2023 and payments from January 2026.
- Consortia Global (Catena-X, TIS, etc.): Focuses on industry-specific product footprint calculation (using lifecycle analysis and GHG Protocol), especially in automotive and chemicals.
- Digital Product Passport (EU): Will require detailed product-level environmental data for every product sold in the EU market, with approvals expected in 2024 and implementation from 2026/27.
Themes:
- Requirements shift from corporate-level to product-level carbon footprint calculation and disclosure.
- Ensuring data quality in calculation and reporting is vital, especially when aggregating and disclosing information on a granular, transactional level.
- Reduction targets and net zero: These regulations are designed to guide companies towards targeted emission reductions and improved transparency, enabling stronger decision-making and progress tracking.
What is Catena-X's Role? Catena-X is part of the "Consortia Global" initiatives, providing solutions and standards for the transparent, high-quality exchange of product-level and value-chain emissions data, mainly within the automotive sector.
- Collaborate across your value chain: Share actual product carbon footprint (PCF) data with improved interoperability and data ownership across supply chains.
- Standardize data exchange: Use standardized data models and workflows for easier audits and seamless information sharing following industry requirements.
- Accelerate carbon reduction: Identify high-potential areas for CO₂ reduction, prevent double-counting, and optimize carbon footprints.
Modern supply chains require seamless sharing and management of sustainability data across different systems, companies, and platforms. SAP Sustainability Data Exchange (SDX) enables this by offering tools and integrations that help companies calculate, manage, share, and exchange carbon footprint data easily and securely.
Key Features:
- Two Core Solutions:
- SAP Sustainability Footprint Management: Calculates and manages carbon footprints (corporate and product scopes 1, 2, and 3).
- SAP Sustainability Data Exchange: Receives, manages, and shares product-level carbon data (scope 3) throughout the value chain with strong interoperability.
- Open and flexible: SDX works across any company size and industry, using cloud-based, open APIs for smooth integration and secure data exchange.
How It Works with Business Networks:
- SAP Business Network connects enterprises, processes, and systems for transparent and sustainable supply chain operations.
- SAP SDX is interoperable with third party platforms (such as Catena-X and Together for Sustainability) and supports WBCSD peer-to-peer data sharing, enabling standardized, secure exchanges between suppliers and buyers.
Business Benefits:
- Find trading partners: Easily connect with partners who share sustainability objectives within SAP Business Network.
- Connect to industry networks: Seamlessly communicate and exchange data across platforms like Catena-X, TIS, and others.
- Standardize APIs for data integration: Use common APIs to exchange product carbon footprint data with suppliers and buyers, enabling more efficient and accurate sustainability reporting.
Who Can Use It?
- Any business, regardless of size or industry, can leverage SAP SDX to align with industry standards, connect with partners, and drive their sustainability strategies forward.
Product sourcing and master data from SAP S/4HANA connect with SAP BTP, which manages sustainability data and footprints.
These systems integrate with the SAP Business Network and industry platforms (such as Catena-X for automotive and Together for Sustainability for chemicals) to facilitate sustainability data exchange between suppliers and buyers.