According to a recent Kelly Cannon’s (SAP) blog post, the transition from fossil fuel-based energy systems to net-zero carbon sources means that oil, gas, and energy companies must simultaneously reduce costs from existing operations and invest in new business models to lead the sustainable energy transition. SAP is helping oil and gas companies make the transition with innovative solutions that can optimize legacy energy sources, integrate low carbon alternatives and reinvent business models.
What are these solutions? 1) GreenToken by SAP is said to leverage a ‘unique digital twin on a blockchain’ to assure sourcing transparency and ESG credibility data across the supply chains. By keeping core operations clean and scalable, companies can ‘focus on sustainability, foster a culture of innovation, and differentiate themselves from competitors’.
Companies need to establish a ‘dedicated optimization office’ to deploy technologies including automation, optimization and AI. Digital solutions such as a green ledger play a key role in collecting and analyzing data to drive sustainability goals. The SAP Sustainability Control Tower also ran, an overarching dashboard that sets targets, monitors progress and delivers actionable insights. Also involved was Evolution Software’s Flexinergy energy and emissions reporting platform.
Sustainable procurement is said to be key to a sustainability strategy. Companies should seek-out suppliers that adhere to sustainable practices, reduce scope 3 emissions and implement robust measurement systems. Companies should prioritize compliance with regulatory requirements, including due diligence laws and SEC reporting*. Watch the supremely ‘green’ and improbably ‘diverse’ SAP video on YouTube.
* SEC emissions reporting is currently only a proposal. In fact, before any hard and fast regulations have been put in place, there has been something of a backlash against the whole ESG movement. The Financial Times reported that ‘asset managers have lashed out at the growing number of US blue-chip companies that are using environmental and social factors to decide bonuses for senior executives, quoting State Street Global Advisors’ Ben Colton as saying ‘They are subjective, fluffy and easily gamed’. In a similar vein BlackRock boss Larry Fink was reported by Reuters as saying that he has stopped using the ‘weaponized’ term ESG.
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