SAP shares industry trends that will shape 2023 and beyond.
As companies now recognize the importance of Environmental, Social, and Governance (ESG) initiatives to ensure long-term success, sustainability initiatives among organizations will see significant strides this 2023.
In a recent blog by Thomas Saueressig, a Member of the Executive Board of SAP SE (NYSE: SAP), noted that in recent years, organizations had considered sustainability as an essential agenda as they focus on ESG initiatives, such as reducing their carbon footprint, investing in renewable energy sources, and promoting ethical practices.
For Rudy Abrahams, Managing Director of SAP Philippines, this trend is also the same in the Philippines. The government, for instance, has been promoting sustainability by introducing policies encouraging organizations and businesses to adopt ESG initiatives.
In 2019, the Securities and Exchange Commission (SEC) mandated publicly listed companies to submit an annual sustainability report, recognizing the relevance of ESG disclosures to support global and local sustainability goals and encourage transparency and accountability from companies.
Working to Achieve Circular Economy
As part of their ESG initiatives, large enterprises in the Philippines must contribute to achieving a circular economy. For years, the global economy has been linear and single-use, contributing to the accumulation of waste materials, which end up in landfills or the environment.
“A circular economy fosters new business prospects while preserving the environment. The advantages of implementing circular business models will significantly outweigh the existing investments that organizations must invest in,” Abrahams noted.
This year, organizations in the country are expected to become more proactive in establishing more circular operations, especially with the passage of the Extended Producer Responsibility (EPR) Act of 2022 (Republic Act no 11898). This law requires large enterprises to recover their plastic packaging waste, or they will pay a fine. This law requires large enterprises to recover their plastic packaging waste, or they will pay a fine.
“Recovery is a subset of the more significant idea of EPR. This law emphasizes the obligation of organizations to ensure that the resources and waste that is generated can be recycled or decomposed sustainably instead of ending up in landfills,” Abrahams added.
Ensuring Resilient Supply Chains
Meanwhile, there is also an existing demand for businesses to ensure resilient supply chains. Nowadays, most greenhouse gas (GHG) emissions originate from businesses’ supply chain activities. A recent study by the non-profit organization CDP (formerly the Carbon Disclosure Program) revealed that these activities make up at least 92 percent of the whole GHG emitted by a business.
“In recent years, businesses have seen the importance of having resilient supply chains. As disruptions still happen across various industries, digitalizing supply chains help organizations ensure that they provide consumers consistently with the goods and services they need and reduce their carbon emissions,” Abrahams added.
Embracing Business Transformation
Meanwhile, as companies further strengthen their sustainability and ESG initiatives this year, Abrahams noted that embracing technology remains critical to implement these changes. Companies like AC Energy (ACEN) and Globe Group have been strengthening their business transformation initiatives to achieve their goals.
For instance, ACEN, the listed energy platform of the Ayala Group, has been leading the charge in the renewables revolution and towards adopting technology. But the company knew that its green journey should start from within and by ensuring that necessary solutions are available to improve their processes.
Recently, ACEN implemented SAP S/4HANA on Azure to create a unified digital business platform covering finance, procurement, inventory, and asset maintenance across multiple entities. SAP S/4HANA has been helping the company have visibility across its entities. This is crucial to enable collaboration among ACEN’s teams as they formulate and execute strategies to increase solar and wind plant capacities while reducing inefficiencies and waste.
ACEN also aimed to achieve efficient day-to-day operations with streamlined processes on a digital platform by improving corporate governance, reducing cybersecurity risks, and minimizing paper wastage. In addition, learning a new skill, such as SAP S/4HANA, helped contribute to human empowerment in the workplace.
For Globe, on the other hand, the effective use of organizational data to make more informed decisions is critical in improving sustainability outcomes. As the country’s top telco and digital solutions platform, Globe has various entities with different processes and reporting formats.
To address this challenge, Globe migrated to SAP S/4HANA to improve fragmented processes, manual workloads, inefficiencies, lack of insights, and delayed decision-making. It also integrated SAP Fiori to improve the user experience and access to insights. Automation and fewer reconciliations also enable quicker processing of financial transactions, quicker book closing, and error-free reporting.
“These are the industry trends that we believe will share the world of business this 2023 and beyond. On our part, SAP remains committed to helping organizations transform into fully digital, resilient, and sustainable enterprises, enabled with data visibility into their business functions and processes to make the most critical strategic and operating decisions,” Abrahams concluded.
