For decades it has been clear that the earth’s climate is changing and that our impact on the environment is undisputed. The latest UN (IPCC) report is the worst warning ever issued on climate change and a wake-up call for all of us to realize that only through action can we ensure a sustainable future.
As a pioneer in the sustainability movement, SAP plays a crucial role model role – such as the commitment to become climate neutral by 2023 – and helps companies tap their growth potential. This is made possible by optimizing circular business models with practical and scalable SAP solutions such as SAP Product Footprint Management, which enables companies to consider greenhouse gas emissions in their end-to-end business processes. While SAP’s focus is on innovations that help customers become more sustainable, we as individuals should lead by example by taking steps that lead to more sustainable lives, such as using alternative modes of transport or reducing single-use plastic .
Following the vision of a circular economy, companies and individuals are advised to focus on the reuse and reuse of materials that follow a cycle of manufacture, use, return and reuse.
In order to realize circular business models, supply and value chains across industries must be completely reconsidered in order to create end-to-end transparency. To turn waste into value, SAP developed SAP Rural Sourcing Management, a solution that can improve insight into resources across value chains and help companies understand, control, and manage their impact on the environment. For example, it is estimated that the fashion industry is responsible for 10% of global carbon emissions, and according to the UNFCCC, the industry’s emissions are expected to increase by more than 60% by 2030 if the transformation to a sustainable fashion industry does not happen soon.
A great use case where the SAP Rural Sourcing Management solution helps streamline the path to a circular economy is in a sustainable network of companies connecting plastic garbage collectors in Ghana with recycling companies, manufacturers, brands and fashion consumers. In Africa, less than 20% of plastic waste is recycled, while the European Union has set a goal of 50% clean environment by 2025. In urban areas of countries like Ghana, collecting waste is a means of survival. However, many city dwellers have poor insight into the market price of the materials collected, making them vulnerable to imposed prices.
By implementing SAP Rural Sourcing Management, waste collectors in Ghana can get in direct contact with waste collectors in order to receive a fair and transparent wage. The plastic resources are then handed over to the recycling companies to turn them into reusable resources. By shipping to various factories and manufacturers, plastic can be used in the manufacture of fashion items. With the SAP Logistics Business Network, complete traceability along the entire supply chain can be achieved in order to meet expectations and standards for sustainable production and fair conditions.
To connect and manage the business processes in every fashion company, SAP supports brands and retailers who want to use Recommerce to capture and control the value of products after they have been sold. The aim is to enable and connect re-commerce-specific business processes that include buying back, managing and reselling used inventory as well as tracking key financial, customer and sustainability performance indicators. Any fashion brand can maintain visibility and control the re-commerce business to take full advantage of the opportunities at stake – a profitable resale business, positive environmental impact, customer acquisition and expanding customer lifetime value.
SAP technology offers solutions that can turn serious environmental challenges, such as plastic waste, into integral parts of the circular economy. It can bring people and companies together with shared values to work together to create a more sustainable value chain where products are used, returned, reused and repurposed.
Kathrin Lehman is Head of Customer Innovation and Maintenance at SAP.