Nowadays, businesses and governments have been racing to achieve a sustainable, green, and digital economy and are driven to showcase their sustainability goals transparently.
In the Philippines, for instance, the government further enhanced its efforts to build climate resilience among communities nationwide and address climate change to protect the environment, lives, and property. Last year, the country submitted to the United Nations Framework Convention on Climate Change (UNFCC) Secretariat the first nationally determined contribution (NDC), covering its planned reduction and avoidance of greenhouse gasses (GHG) of 75 percent, of which 2.72 percent is unconditional. This commitment covers the period 2020 to 2030 for the sectors of agriculture, waste, industry, transport, and energy.
At the UN’s 27th Conference of the Parties (COP27) in November 2022, the Philippine government also vowed to support host country Egypt in its efforts to revitalize international consensus on the climate crisis. It also reiterated its call for climate justice and financial and technical support of developed countries for climate initiatives, particularly for developing nations.
Becoming stewards of sustainability
Meanwhile, in recent years, a growing number of organizations have been stepping up to help achieve a sustainable future by integrating environmental, social and governance (ESG) considerations into their strategic frameworks. In this year’s COP27, for instance, SAP (NYSE: SAP) pledged to support more policy transformation globally and help innovate sustainable businesses by reenergizing emerging economies to achieve a trillion-dollar greener impact and job generation.
A recent report by SAP and Oxford Economics also revealed that 66 percent of businesses in Asia do not think it is difficult to be sustainable and profitable at the same time. However, only eight percent say they receive significant value from their sustainability strategies today.
This reality may have happened due to the disconnect between sustainability plans and actions for many organizations. While 60 percent of businesses have a communicated sustainability plan, only 20 percent have incentivized leaders based on their success. In addition, less than half (44 percent) say their employees are active participants in their sustainability efforts, with the highest in India at 52 percent, followed by Singapore at 51 percent and the lowest in Malaysia at 33 percent.
“Businesses across Southeast Asia, including the Philippines, believe that they can boost their earnings while protecting the environment. This reality is a positive indicator to continue pushing towards sustainability. However, organizations must refocus their strategies to realize the significant value and reap better and actual outcomes,” said Rudy Abrahams, Managing Director of SAP Philippines.
Regulatory compliance: A key sustainability driver and a challenge
In a recent media event held by SAP at its headquarters at the NAC Tower, Bonifacio Global City in Taguig, Abrahams was joined by Apple Evangelista, Head, Sustainability and Social Responsibility (SSR) of the Globe Group, and Henrik Batallones, Marketing and Communications Director of the Supply Chain Management Association of the Philippines (SCMAP), to discuss how organizations have been refocusing their strategies to ensure sustainability.
“In the Philippines, organizations used to consider sustainability as a cost tied to regulatory compliance. But that perspective is changing. Sustainability is now seen as a strategic imperative to ensure that organizations not only provide better service to their customers but also help ensure a sustainable future,” said Batallones.
SCMAP is the premier supply chain industry organization in the country. Composed of the country’s major manufacturers, logistics providers, and retailers, SCMAP moves the industry’s global competitiveness by engaging with stakeholders in the public and private sectors, advancing supply chain education on all levels and organizing events that provide a venue for supply chain professionals to connect.
Abrahams, meanwhile, noted that too much focus on compliance can sometimes hinder achievement of sustainability goals. Citing data from the SAP and Oxford Economics report, he said that organizations in the region consider compliance as the second biggest sustainability challenge (26 percent), only behind reinventing business strategy. This means that organizations in the country may need to refocus their strategies to achieve greater value and benefit from sustainability.
Investing in data, improving sustainability outcomes
Key to improving sustainability outcomes will be the effective use of organizational data to make more informed decisions. For businesses in the Philippines, this remains a challenge as it takes time, especially for organizations like Globe, the Philippines’ top telco and digital solutions platform, which has various entities with different processes and reporting formats.
To address this challenge, Globe has been utilizing SAP solutions with 70 percent of the company’s internal systems now run by SAP. With SAP solutions already in place across its business units globally, the company migrated to SAP S/4HANA to improve fragmented processes, manual workloads, inefficiencies, lack of insights, and delayed decision-making.
Meanwhile, SAP Fiori apps helped enhance the user experience and access to insights. Enhanced visibility enables well-informed decision-making throughout the organization, and automation and fewer reconciliations in finance allow faster financial transaction processing, book closing, and error-free reporting.
Finance functions became integrated and efficient, providing real-time business insights, while IT security was strengthened with improved authorization controls and compliance. By facilitating these improvements, SAP S/4HANA proved to be a catalyst for change for Globe, helping it adapt to changes easily in its business environment.
“For us at Globe, sustainability is putting our purpose in action. By understanding what is material to us as a business and what matters to our stakeholders and our industry, we recognize how data-driven strategies play an integral role in guiding our sustainability practice,” Evangelista said.
Evangelista also emphasized the importance of responsible sustainability reporting, using it as a springboard for goals and target milestones in the coming years.
Abrahams could not agree more. He noted that businesses that are achieving value from sustainability are defined by traits such as setting clear expectations at the strategic level, applying the transformative power of technology and data management, and engaging with important audiences such as employees, supply chain partners and policymakers.
Helping organizations in their sustainability journey
SAP, for instance, has been helping organizations in their sustainability journey enabled by data, from driving transparency for disclosure purposes,incorporating or optimizing their data to make more sustainable business processes and decisions, to scaling sustainable practices across industry business networks and value chains.
In line with its purpose to help the world run better and improve people’s lives, SAP also enables organizations to achieve zero waste, zero emissions, and zero inequality through a broad range of solutions. Since organizations now demand fast, reliable, and compliant standard regulatory reporting, and want to leverage insights for their internal sustainable business transformation, SAP ESG solutions portfolio provides a scalable and integrated reporting platform.
Among its offerings are its most recently updated SAP Sustainability Control Tower (SCT) solution, which can help improve ESG transparency and sustainable business performance. SCT enables companies to record ESG factors with out-of-the-box integration with SAP systems for faster time to value and granular data visibility based on actual data, not averages.
The solution also enables companies to report regulatory compliant ESG metrics covering common frameworks based on an open and extensible solution with the largest ESG ecosystem. And lastly, it allows business leaders to act and plan with actionable insights, forecasts and setting targets, track initiatives, and optimize business processes to make an impact.