Copenhagen, Kyoto - Do we have something in it for our Business?
Erik Rasmussen, Founder of the Copenhagen Climate Council, explains: "Reducing the emissions that until now have been so linked to our economic growth and betterment will be an enormous, unprecedented global challenge but will also provide significant opportunities for sustainable growth, green jobs, development and innovation."
"Economic recovery and urgent action to tackle climate change are complementary – boosting the economy and jobs through investment in the new infrastructure needed to reduce emissions." - The Copenhagen Call.
Since the last two decades there has been an increased focus by the global councils towards the required efforts for the global temperature control and you might have already come across similar statements during the last few months. Speeches like these from the global leaders and the environment specialists seek agreement on effective measurement, reporting and verification of emissions by businesses, and the requirement to gauge the correctness of incentives like carbon credits rewarded for scientific & technological advancements in operations for reduced emission targets. Though I am a supporter to this need of the hour, but here the reason to highlight these excerpts is not to debate on these, but to present an idea about how an SAP offering can help businesses worldwide take advantage of this climate issue to boost their growth.
Now with the initial draft in place, I wish to shift your attention towards one of these lucrative incentives impacting business finances, Carbon Market and Emission trading, the foundations for which were laid in early 1970’s. In short this administrative approach rewards the organizations for reduced emissions while others pay charges for polluting by buying these credits. So, finally what we converge to is a topic to interest our P&L statements.
With these articles and increasing global focus on emissions, a question which preoccupied my mind was “We all know and probably our business work with carbon credits. Do we have technology to calculate the actual profit and help businesses increase profitability through their Carbon Management?”
The answer is “Yes”. SAP has comprehensive offerings for Sustainability Performance Management, but I would restrict this discussion to SAP BusinessObjects Profitability and Cost Management (SAP PCM). SAP PCM is designed to calculate and evaluate the costs associated with individual business drivers and assign these costs at the primary activity/ operational level. This helps businesses gain deeper insights for informed arbitrations for the activities and their impacts through multiple costing & management models like Activity Based Costing. The Activity based costing model helps business assign direct & indirect costs to each business process & activity, for precise strategic business decisions.
With this idea, I wish to say thanks & “adieu”, and also promise to get back soon with details on how SAP BO PCM can help businesses wealthier with Carbon management.
