Step by Step to Sustainability Reporting With SAP 

Sustainability reporting is undergoing major change, which is why this topic is associated with many uncertainties: the requirements of the Corporate Sustainability Reporting Directive (CSRD) alone, which stipulates a reporting obligation for large companies in accordance with the new European Sustainability Reporting Standards (ESRS), introduces many new concepts for non-financial reporting.

Closely related to this are the reporting obligations resulting from the EU taxonomy, which, in contrast to the CSRD, are aimed at financial reporting. In addition, the European reporting obligations are often perceived as excessive bureaucracy. Nevertheless, there are good reasons for companies to focus on their sustainability performance and present it transparently to investors and customers. To do this, they should have a strong partner at their side who can make company data usable in a future-proof way.

CALEO supports the sustainability reporting process 

The internationally active management consultancy CALEO specializes in enterprise performance management and reporting with SAP. The strength of the consultancy is the combination of technical know-how with in-depth professional expertise and process experience. CALEO thus supports companies end-to-end in the introduction of their sustainability reporting.

Step 1: Identify contacts, topics and data sources

The consultancy offers workshops and supports companies in finding the right internal contacts. Together with the stakeholders in the company, the experts identify the relevant sustainability topics. The consultants always incorporate the latest findings from the European Financial Reporting Advisory Group's (EFRAG) implementation aids for ESRS reporting.

Once the key sustainability issues have been identified, the next step is to identify possible sources of sustainability data. The parties involved then develop a process to efficiently record, collect and prepare the necessary data. In many cases, certification to one of the ISO 9001 (quality management), ISO 14001 (environmental management) or ISO 50001 (energy management) standards already lays the foundations for a data collection process. Otherwise, new processes can be developed, at least based on these standards, that are a perfect fit for the company.

Due to the far-reaching synergies, it is often advisable to base the process on financial reporting: reporting processes and processes for data collection are already established and tested here. It is therefore worth taking a closer look at the financial reporting system landscape.

Step 2: Mapping the process in practice with software support 

Following the materiality analysis and the identification of the relevant key figures, companies are now faced with the challenge of mapping the process in practice. A manual process for determining, collecting and reporting sustainability data is often out of the question for capacity reasons. This is due in particular to the high level of detail required for the data.

In addition to SAP, there are now many software providers that promise a highly automated process at this point. In this jungle, companies should focus on these three circumstances in addition to the process itself:

1. Does a specific system architecture (e.g. for financial reporting) already exist and can it be expanded or even shared?
2. How does the software integrate into the existing system architecture? Which interfaces are required?
3. How does the solution ultimately ensure audit compliance?

The last point in particular often makes the integration of heterogeneous software more complex than expected, as the resulting interfaces have to be taken into account for any audits.

Step 3: Integrate sustainability reporting into the SAP landscape

Together with the company, CALEO's experts analyze the SAP system landscape and show how companies can make optimal use of existing resources. They then determine how the company can map sustainability reporting in the systems - with the least possible investment in new software, of course. It does not matter which SAP system companies use for financial reporting: Systems such as SAP SEM-BCS, SAP BCS/4 and SAP BPC already run in an SAP Business Warehouse, which is ideal for collecting and processing even non-financial data. If, on the other hand, S/4 Hana for Group Reporting is used, for example, sustainability reporting can also be carried out there using the existing Hana technologies.

If companies use S/4 Hana for Group Reporting and an SAP Business Warehouse, CALEO also offers a starter kit with which the data for financial reporting can be easily transferred. This enables companies to use their entire financial logic with the high-speed reporting of BW/4.

Sustainability reporting is both an obligation and an opportunity

Although sustainability reporting is becoming a legal requirement for more and more companies, it is also worth looking at your own sustainability performance even if you are not obliged to do so.

For example, the experts from CALEO will also show how companies can use the data to ensure that they are future-proof and do not become suspected of greenwashing. After all, working sustainably also means working economically in the long term.

China is another major market that is planning to introduce sustainability reporting requirements by 2026 that are similar to European regulations. This makes it even more interesting for European companies to become pioneers in sustainability and sustainability reporting and to drive innovation in this area. CALEO actively supports companies in this - tailored to individual customer requirements and the respective situation.

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