Designed to make environmental, social, and governance (ESG) reporting for multinational corporations easier, SAP Sustainability Control Tower is at the heart of a new partnership with Thomson Reuters. Together, SAP and Thomson Reuters are tackling the difficulties that multinational corporations encounter when handling ESG reporting. Their partnership centers on integrating SAP Sustainability Control Tower with […]

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UK supermarket chain J Sainsbury plc (Sainsbury’s) aims to further its Next Level Sainsbury’s plans and improve its commercial systems through a recently announced SAP collaboration. A new path for the retailer is established by the strategic partnership between SAP and Sainsbury’s, which focuses on modernizing commercial operations and boosting business flexibility. Sainsbury’s current systems […]

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Starting in 2024, SAP is doubling down on its net-zero strategy by expanding its commitment to nature conservation and making financial contributions to climate projects.

The financial contribution will support carbon removal and carbon reduction projects:

• Carbon removal projects: These projects remove carbon emissions from the atmosphere and store them for decades – in an ideal scenario, the storage is permanent. Examples include nature-based and technical solutions such as reforestation, where trees store carbon emissions in their biomass as well as direct air capture and storage technologies.
• Carbon reduction projects: Also known as carbon avoidance projects, these projects prevent additional carbon emissions from entering the atmosphere, reducing the overall amount of carbon emitted. Examples include avoided deforestation or energy efficiency projects.

This doubling down on its net-zero strategy follows SAP’s successful delivery on its pledge to become carbon neutral in its own operations in 2023 by balancing out unavoidable emissions with carefully selected carbon credits. While the company’s use of the statement “carbon-neutrality” will be discontinued, the dedication to reduce its carbon footprint and finance climate action beyond its own value chain remains strong.

SAP Is On Track to Plant 21 Million Trees and Plans More

SAP is on track to meet its 2025 goal of planting 21 million trees and has now raised its reforestation commitment.

By 2030, SAP will support trusted partners and communities to plant and protect a total of 25 million trees helping to conserve diverse forests. Furthermore, SAP will fund the conservation and rewetting of coastal and inland wetlands such as bogs and mangrove swamps. With these conservation initiatives and the increased reforestation pledge, SAP’s goal is to conserve more land than its offices and owned data centers occupy worldwide.

To ensure that selected projects deliver a positive outcome, SAP will continue to apply the rigorous and robust due diligence that has previously informed the selection of successful climate investments such as SAP’s long partnership with Livelihood Carbon Funds (LCF), where SAP has funded the planting of trees in Senegal, Rwanda, India, Indonesia, Guatemala, and Mexico.

SAP’s Climate Finance Contribution on the Path to Net Zero

Bridging the Gap

SAP firmly believes that financing climate projects beyond a company’s value chain should be an item on every corporate sustainability agenda. As long as it does not undermine current corporate decarbonization programs, the financial muscle of corporations can bridge the gap in parts of the world where fiscal finances are not robust enough to restore ecosystems and build resilient low carbon economies and livelihoods.

This financial contribution will provide quantifiable benefits to mitigate the effects of climate change beyond SAP’s own value chain with investments in projects that deliver a positive impact for the climate, for local and global populations, and for biodiversity.

The level of the financial contribution is determined by SAP’s own emissions in a given year and is disclosed in terms of carbon emissions, since costs for carbon projects can be subject to change. 

With this financial contribution and increased commitment to land conservation and reforestation, SAP continues its journey to introduce meaningful measures to achieve net-zero in 2030, 20 years earlier than originally planned.

Financing climate projects at the same time as pursuing its corporate net-zero agenda allows SAP to take responsibility for emissions that cannot be avoided and actively mitigate climate change on a global level. Furthermore, the financial contribution will enable positive climate action on a far greater scale than SAP could achieve alone.

Shifting Perceptions

In the last 15 years, corporate sustainability at SAP has shifted perceptions on how corporations manage their own carbon emissions and how corporate sustainability agendas must be as actionable as they are accountable.

Since 2012, the SAP Integrated Report has shared information on SAP’s annual environmental performance and progress on corporate sustainability targets. SAP has led the way in showing that corporate sustainability is an integral part of business – not just an add-on to strategy or operations.

SAP’s carbon impact is one of the sustainability KPIs that are indicators of future performance and form the basis of compensation elements for members of the Executive Board of SAP SE. Today, sustainability is deeply embedded in SAP’s vision to bring out the best in every business. With its extensive portfolio of sustainability solutions, sustainability is anchored in SAP’s purpose to make the world run better and improve people’s lives.

With the help of the RISE with SAP program, the City of London Corporation is modernizing its operations through a digital transformation initiative. SAP’s all-inclusive offering for businesses and public sector organizations looking to migrate to the cloud is called RISE with SAP. Organizations can support long-term objectives like sustainability, improve data insights, and increase […]

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Through their recently announced partnership, Vonage and SAP aim to transform enterprise intelligence and provide better digital experiences by utilizing SAP Business AI in conjunction with Vonage’s communication APIs. The goal of the partnership between SAP SE and Vonage, a multinational provider of cloud communications, is to combine Vonage’s network APIs with SAP Business AI. By […]

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Skills have become the cornerstone of many human resources practices—and one of the top HR trends in 2024. SAP’s HR researchers explored why both employees and organizations value a skills-based approach to people practices such as hiring.

According to findings from over five years of global research conducted by SAP SuccessFactors HR research scientists, 88% of employees would feel positively about skills-based people decisions in their organization. Along with employee satisfaction, HR and talent acquisition leaders see many potential benefits of the skills-based approach. For example, a focus on skills can support internal mobility, help realize employee potential, and make recruitment faster, easier, and more transparent.

So, what does “skills-based” mean? With a skills-based approach to human resource management, work is organized entirely around skills, from hiring and compensation to workforce planning, reskilling, and upskilling. Decisions are made based on skills and capabilities rather than traditional criteria like education or job experience.

Of course, there’s no universal blueprint that works for every scenario: there are multiple approaches to prioritizing skills in an organization. How skills-based practices are implemented depends on organizational culture, industry, labor regulations, and many other factors, but a great place to start is with skills-based hiring.

What Is Skills-Based Hiring?

Skills-based hiring is an approach to recruiting new employees based on their skills and ability to perform a job instead of the formal qualifications listed on their resume or curriculum vitae (CV), such as education or previous job titles.

Benefits of Skills-Based Hiring for Talent Acquisition

To understand why skills-based hiring works well for talent acquisition, we must consider the question what is talent acquisition? At its core, talent acquisition aims to address not just the current talent needs but also the long-term, strategic workforce plans. It can do so by predicting what skills the organization will require in the future to stay competitive, grow, and scale to future needs. Skills-based hiring can support a future-oriented talent acquisition strategy, thanks to:

• Productivity: People with the right skills for the job can be more effective in their roles.
• Diverse talent pools: A skills-based approach helps find qualified talent that wouldn’t be found otherwise, expands talent pools, and increases workforce diversity.
• Transparency: Skills-based talent decisions can be more equitable, fair, and legally defensible while also helping candidates get clarity and more agency over their careers.
• Efficiency: Skills-based practices enable faster talent decisions, which, in turn, accelerate the entire recruitment process, reducing time to hire and productivity.
• Strategic hiring: A skills-based approach helps organizations understand the skills they will need in the future and hire talent to fill those gaps.
• Approach validation: Skills-based hiring is a great way to demonstrate the value of prioritizing skills—before implementing the approach across other HR practices.

Considerations for Adopting Skills-Based Hiring: Exceptions, Misconceptions, and Challenges

Of course, there are still barriers to adopting the skills-based approach to hiring and recruitment. Sometimes, traditional criteria are necessary, such as when hiring for roles that require a specific degree or certification, like lawyers, doctors, and pilots. Candidates’ backgrounds and experience can also be crucial. Senior leaders may be chosen in part due to their industry or market experience; public relations leaders may be hired for their network and media contacts.  

There are also many misconceptions about skills-based hiring. For instance, some believe that resumes are unsuitable for skills-based hiring because they’re structured around traditional criteria, such as education and past job titles. In reality, candidates can focus their CVs more on skills, and organizations can use applicant tracking systems and other recruitment software to analyze resumes and screen for the best applicants. In fact, thanks to the use of AI-enabled recruiting tools, skills can even be inferred from experience listed on resumes.

Finally, a widespread concern among talent acquisition leaders is how to make skills-based decisions equitably and efficiently. To do it fairly and thoroughly, they may need to research which skills are relevant for each role, devise custom skill assessments, and prepare job-specific interview questions rooted in the relevant skills. However, the recruitment process also needs to move along quickly, yield good results, and create a smooth candidate experience. So, although mindsets about skills-based hiring are changing, many talent acquisition leaders are still concerned about the efficiency of this approach. Thankfully, this is where technology can make a crucial difference.

Removing Barriers to Skills-Based Hiring

Skills-enabling technologies have long been used in HR practices: online learning systems to help employees develop new skills and complete required training, job architectures that help define roles and the skills needed for them, and skill assessments to help understand the capabilities and skill proficiencies that people have. While some potential barriers to adopting a fully skills-based approach may exist for certain roles, AI can help empower organizations to hire the best talent with the skills needed to succeed. Using SAP Business AI for HR and SAP SuccessFactors solutions can provide organizations with multiple approaches to adopting skills that may fit their unique workforce and hiring needs.

Using AI to Fuel Your Skills-Based Hiring Approach

The widespread adoption of AI in HR has opened up new capabilities in talent acquisition software while also optimizing existing functions. For example, with the SAP SuccessFactors Recruiting solution, talent acquisition teams can leverage AI to help them adopt skills-based hiring practices:

• Skills Framework: The SAP SuccessFactors talent intelligence hub offers an AI-enabled skills framework that can allow organizations to consolidate skills data from multiple sources for a comprehensive view of their workforce. AI-driven capabilities within the skills framework can allow organizations to align skills to job roles to better understand and address skills gaps.
• Job descriptions: AI-assisted content generation allows recruiters to quickly create and enhance compelling skills-based job descriptions to attract diverse candidates with the right skill sets.
• Improved candidate experience: When candidates upload their resumes during the application process, AI-driven skills extraction allows them to view, validate, and manage skills on their profiles.

• Job recommendations: Upcoming innovations include the ability for candidates to use AI to help them find the best opportunity for them based on skills extracted from their resume.
• Resume analysis: Using AI-driven skill inference, recruiters can quickly analyze applicants’ resumes and compare best-matched candidates based on skills.
• Interview questions: With insights from skills data, AI can recommend relevant skills-based interview questions to ensure interviewers are prepared to fully engage with top candidates.
• Skills evaluations: Using AI-recommended interview questions, interviewers can effectively assess candidates and provide evaluations based on the skills needed for a role.
• Equitable decision-making: AI-assisted applicant screening helps recruiters make bias-free, skills-based hiring decisions quickly and confidently.

AI can be a true catalyst to an organization’s hiring potential, and many of our customers are already leveraging AI-enabled capabilities. If you’re curious how works, check out this FC Bayern customer story.

Skills-based hiring is an excellent way to recruit the talent your organization needs to thrive and stay competitive—today and into the future. The right recruitment software can make skills-based hiring intuitive, equitable, and efficient.  

For a deep dive into our skills research, get the full report on making skills a reality in your organization and explore SAP SuccessFactors Recruiting.

A company with a sustainability strategy that lacks a sustainability management system is akin to a rowing boat attempting to travel upriver without a paddle. Without the right data, tools, and a structured approach to environmental, social, and economic decision-making, the company risks being carried downstream.

There are two major drivers behind the need for companies to implement a robust sustainability management system. The first is the need to future proof their business to ensure a resilient value chain and secure a competitive advantage over their peers.

The second is to transition from voluntary to regulatory reporting and comply with the torrent of new regulations. Regulations like the Corporate Sustainability Reporting Directive (CSRD) or standards like IFRS require companies to report on, and respond to, a wide variety of environmental and social sustainability topics. Some sources say there are more than 600 regulations, sustainability reporting standards, and frameworks around the world, with more coming down the pipeline every year.

What Is a Sustainability Management System?

A sustainability management system allows companies to calculate and track metrics and targets and disclose their risk management, strategy, and governance policies. It is also a valuable tool for providing a robust and holistic view for sustainability decision-making. With carbon emissions data a central element to any sustainability strategy, SAP has created a suite of cloud-based solutions to enable companies to both respond to regulation and advance their own ambitions.

SAP’s End-to-End Approach to Carbon Management

So how does SAP provide a sustainability management system to tackle the carbon topic and its drivers end-to-end? We can enable customers to implement five key principles with the help of our modular and integrated family of sustainability software-as-a-service (SaaS) solutions.

1. Use a Reliable Foundation and Reuse Your ERP Data

SAP embraces an ERP-centric approach, using integrated sustainability data from cloud ERP business processes supported by AI technology. We can bring together different types of business data and levels of data granularity, as required, to enable the transition from voluntary to regulated carbon management. It is a flexible but robust approach with high data quality and reliability at its core.

2. Get a Complete View for Regulatory Reporting with Reasonable Effort

SAP Sustainability Control Tower can provide an easy-to-use data collection system that helps enable a holistic and complete calculation of the carbon footprint at the corporate level. As of now, customers can also generate an automated environmental, social, and governance (ESG) report based on AI and natively available ESG data.

3. Go Deep Where It Matters Most

For a deeper perspective that is informed by the corporate overview, customers can use the integration with SAP Sustainability Footprint Management to help enable additional automated and in-depth calculations. Emissions can be tracked at the company, operational, and product level. The ERP-centric approach uses transaction data directly from SAP S/4HANA Cloud to help calculate a consistent carbon footprint at the corporate and product level on one data foundation. AI comes into play when emission factors from standard databases are needed. With the intelligent mapping feature, customers can leverage AI to help automatically provide mapping suggestions. This feature can save significant time by replacing a tedious and manual process while being robust enough to help inform final decision-making.

WITTE Automotive, a customer already using SAP Sustainability Footprint Management as well as SAP Sustainability Data Exchange said:

“By leveraging SAP Sustainability solutions, WITTE AUTOMOTIVE is now able to calculate carbon footprints of the product portfolio in compliance with the Catena-X Rulebook and share it in a standardized way.”

– Michael Tworek, Head of Digital Innovations, WITTE Automotive GmbH.

4. Exchange Actuals with Your Suppliers and Customers

SAP Sustainability Data Exchange helps handle the exchange of relevant data across the supply chain. Customers like WITTE Automotive can therefore request missing data and exchange sustainability data such as the carbon footprint of products with their network. The usage of WBCSD PACT and Catena-X standards in the product can enable consistent and open communication and processing of data.

5. Drive Transformation in Operational Business Processes and Transition to Carbon Accounting in the Financial Sense

The flexibility of SAP Sustainability and the ERP-centric approach means it can meet corporate requirements providing the granularity, accuracy, and auditability needed. Calculated product carbon footprints can be used for financial decision-making thanks to its integration with SAP Green Ledger, which can enable companies to determine carbon emissions versus profitability. All this is done using the same rigorous accounting principles and practices that are used in finance. It can provide a trusted data foundation that can go beyond compliance and help improve business performance management through the integration of trusted carbon data into business processes that matter.

Product carbon footprints can also be integrated into SAP Spend Control Tower, for example. With Scope 3 emissions being the largest proportion of carbon emissions for most businesses, procurement processes become a key lever in decarbonization efforts. The integrated solution can help to analyze and manage the carbon impact of a company’s spend to identify emission hot spots to inform a data-driven Scope 3 decarbonization strategy.

Are You Ready to Adopt a Carbon Management System?

Wherever a company is on their sustainability journey, SAP’s end-to-end carbon management solutions can allow it to go all in on sustainability and build resilient, future-proof operations. This allows them to streamline reporting and meet compliance requirements while benefiting the environment and their bottom line.

SAP Sustainability solutions can do more for you beyond carbon management and ESG-related disclosures. Check out our sustainability page to learn more about the support for operational compliance and material transition.

Gunther Rothermel is chief product officer and co-GM for SAP Sustainability.