Unlocking Synergies by Combining Accounting & Financial Close with SAP Sustainability

The business landscape is evolving, with sustainability at its core—not as a trend, but as a global force driving change. Businesses face increasing regulatory requirements, stakeholder demands, and competitive pressures, and the CFO is particularly impacted:

• Regulations and Standards: Over 600 global sustainability regulations and standards mandate compliance.
• Supply Chain Disruption: Climate-related risks are among the most significant challenges globally now and in the coming years, heavily impacting operations, risk, and cost, with implications for CFOs to mitigate risks to liquidity and long-term strategy.
• Cost of Carbon: Emissions are increasingly covered by a carbon price, set by 75 carbon pricing instruments globally, such as ETS and CBAM. Most recently, EU CBAM and UK CBAM were confirmed to start in 2027. Taxes need to be reported and tax costs need to be optimized, for example by reducing carbon emissions to pay less tax.
• Stakeholder preferences: Not only regulators, consumers, and employees, but also—critically—investors are increasingly demanding transparency into ESG criteria before making investment decisions. This is critical for CFOs, who need to ensure liquidity. Large institutional investors and funds, especially those with a focus on sustainable finance, often require companies to provide comprehensive ESG data to access capital or secure investment. For example, in the EU, the EU Sustainable Finance Disclosure Regulation (SFDR), which came into effect in 2021, also encourages or mandates ESG disclosure, making it an even more critical component for investors looking to allocate funding to companies or projects.
• Technology acceleration: AI is expected to be a key enabler in achieving business sustainability goals; AI potential for the Office of the CFO includes, for example, streamlining costly reporting or identifying cost-effective decarbonization measures.

SAP Green Ledger is a financial solution that serves as the critical hub in carbon accounting. Working with connected business systems, from ERP to sustainability systems, the solution extends financial accounting to include carbon. By applying the financial principles of double-entry accounting to carbon quantities and posting them on dimensions that are relevant to business steering, such as profit centers and segments, it provides a clear and quantifiable understanding of carbon impact, from provisioning to delivery.

• Track, value, and report on the carbon impact of your end-to-end operations
• Auditable reporting of carbon quantities
• Create information useful for decision-making by analyzing carbon data across financial attributes and in relation to financial figures and the company’s existing operational steering model (profit centers, cost centers, etc.).
• Increase trust in reported carbon quantities by following accounting principles

• Support for integration with other systems
• Replication of corporate financial master data
• Import of material movements from financial accounting and enrichment with carbon quantities
• Import emissions from SAP Sustainability Footprint Management and post them as journal entries
• Carbon data collection and posting
• Carbon data export to group reporting
• Allocation Management
• Visualization and reporting of carbon data either independently or in comparison with financial data.