Analyzing the Value of SAP's Sustainability Solutions for Industries

The Consumer Products industry also faces a multitude of existing and upcoming regulations that can vary by country and industry level, such as Extended Producer Responsibilities and Plastic Taxes. The primary challenges include staying compliant, collaboration with value chain partners on carbon footprint, bio-diversity (e.g. reducing palm oil content in products), and other supply chain responsibilities (concerning e.g. living wages, avoiding child labor), and lastly embracing circular business models.

Executive Imperatives:

1. Staying compliant with new Sustainability Regulations: Act on regulatory requirements to avoid potential fines, the appearance of "green washing" to consumers with associated negative brand impact. Primary stakeholders include the Chief Financial and Sustainability Officers.
2. Sustainable Value Chain: Reach sustainability goals upstream with suppliers, and downstream with distributors and consumers. Protect Brand Capital, through credible assurances concerning waste, worker conditions, de-forestation, etc. Reduce carbon impact of each product and provide credible and auditable carbon footprints. Primary stakeholders include the Chief Operating, Procurement, Supply Chain officers.
3. Embracing circular business models: Stay ahead of the market by designing and marketing greener, more circular products. Reduce plastic packaging and overall waste and emissions. Enable circularity downstream with customers and consumers, e.g. for batteries and ease of repairs. Sell these greener products and services at a premium. Primary stakeholders include the CEO, Chief Design, Marketing, and Revenue officers.

Key Challenges:

• Trust in consumer claims, appearances of green washing with, risk of negative press, if not taking, negative impact on Brand Image.
• Complexity of producer responsibility for the end-2-end supply chain, from upstream suppliers to consumption and circularity.
• Reconcilability and auditability of published sustainability footprints to different stakeholders (regulators, investors, consumers)
• Availability of auditable product and corporate carbon footprints.
• Design of new products that meet circularity and carbon footprint standards.

The Automotive industry also deals with a multitude of existing and upcoming regulations. Unique for this industry is the complexity of the supply chain, including the extremely large number of suppliers providing parts. Primary challenges include staying compliant to evolving carbon footprint and circularity regulations, decarbonizing the value chain, act on other sustainability ambitions, and embrace sustainable innovation and product design (including electrification, battery recycling, etc).

Executive Imperatives:

1. Staying compliant: Improve corporate ability to act on the evolving regulatory requirements, aligning sustainability and financial reporting (internal and regulatory). Primary stakeholders include the Chief Financial and Sustainability Officers.
2. Act on Sustainability Ambitions. Achieve sustainability goals – such as decarbonization – by embedding sustainability data and KPIs in each relevant value chain. Avoid potential carbon fees and mitigate the risk of stranded assets. Primary stakeholders include the Chief Operations, Supply Chain, Procurement Officers.
3. Embrace circular business models and sustainable innovation: Stay ahead in the market by designing and launching more sustainable cars at a premium. Increase the circularity of spare parts, batteries, and introduce new business models downstream within the distribution network. Primary stakeholders include the Chief Design, Marketing, and Revenue officers.

Key Challenges:

• Availability of auditable product and corporate carbon footprints, given the complexity of each car model (Bill of Materials), the multi-tier supply chain, and the manufacturing process.
• Risk of negative brand impact due non-compliance to existing and new emissions standards and sustainability regulation.
• Scarcity of high-demand materials and the need for circularity in batteries and spare parts.