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Digitalization key to managing sustainability and profitability of enterprises in Phl

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SAP x Oxford Economics study shows organizations believe sustainability can boost profitability while protecting the environment

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 properties. Last year, the country has 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 the 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) has pledged to support more policy transformation globally and help innovate sustainable businesses by assisting in reenergizing emerging economies in their goal to achieve 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, with Japan leading at 68 percent while Indonesia scores lowest at 46 percent, 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. 

Rudy Abrahams, Managing Director of SAP Philippines (Third from left, explains the multiple benefits and intrinsic value of adopting sustainability in business not just for efficiency but also for profitability. Looking on from left, Apple Evangelista, Head of Sustainability and Social Responsibility (SSR) of Globe Group and Henrik Batallones, Marketing and Communications Director of the Supply Chain Management Association of the Philippines.

“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, Rudy Abrahams was joined by Apple Evangelista, Head, Sustainability and Social Responsibility (SSR) of 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. Comprised of some of the country’s major manufacturers, logistics providers, and retailers, SCMAP engages 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 towards global competitiveness of the industry.

Meanwhile, citing the data from the SAP and Oxford Economics report, Abrahams noted 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 on 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, 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 are now being 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, and 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 Group, helping it adapt to changes easily in its business environment.

“Globe’s core values are centered on innovation and sustainability. We look at pressing problems and innovate from there, ensuring that we help solve the real issues and contribute to a more sustainable future. We envision making families’ dreams come true and empowering businesses to flourish to help achieve an admired nation. As we create our products, we always anchor them in that vision,” Evangelista said.

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 include 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.

Visit the SAP News Center. Follow SAP on Twitter at @SAPNews.

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