However, there is another looming risk to global financial systems that did not make the headlines. The risk of climate change is so critical that the US Treasury lists it as one of 聽in their strategic four-year plan, alongside topics such as ensuring national security.

How Financial Stability Relates to ESG Disclosure

The impact of climate change is indeed considered a financial security risk globally, and there is a narrowing window for action. In the US alone, the total cost of climate-related聽聽since 1980 exceeded USD 2,5 trillion. On the flipside, low carbon technologies present a tremendous聽economic opportunity, and governments are scrambling to ensure an orderly transition. However, up to $100 trillion of assets revolving around fossil fuels is聽聽to be at risk, due to disruptive technologies and shifting government policies.

Environmental, social and governance (ESG) disclosure on a corporate level is a critical component of effective risk management. That is why regulators around the globe are implementing new rules requiring companies to disclose sustainability risks, in line with existing requirements for other risks.

Shifting Towards International Standards

A big shift is needed, before investors will be able to compare companies using not just finance, but also sustainability criteria. In June 2023, the first two聽聽were released by the International Sustainability Standards Board鈥檚 (ISSB). It means that Sustainability data must be reported with the same scrutiny as Finance data. 聽The standards build on existing frameworks such as SASB (Sustainability Accounting Standards Board), GRI (Global Reporting Initiative), and the Task Force on Climate-related Financial Disclosures (TCFD).

Both the EU and US indicated that they would align with ISSB. Several other countries also indicated that they may adopt these standards, including聽,听, and the UK.

Controversy Surrounding New Regulations

The US Securities and Exchange Commission () proposed a controversial new regulation in 2022. It will require publicly traded companies to disclose how their operations affect the environment. It is encouraging firms to disclose more detailed information about their climate strategies, to increase transparency.

罢丑别听聽provides a structured frame of reference and a common understanding of economic activities that contributes to environmental goals, such as climate change mitigation or circular economy objectives. It is linked to the EU鈥檚 revised聽聽under the Corporate Social Responsibility Disclosure (CSRD), effective from 2023.

The EU is currently leading the way with the concept of聽. This means considering both the impact of the outside world on a company, as well as a company鈥檚 impact on the outside world. It is rooted in the view that the world beyond finance can be material, and therefore worth disclosing.

What it Means for Australia & New Zealand

Maintaining investor confidence is crucial for smaller countries and Australia & New Zealand are not isolated from global economic stability trends. New Zealand passed a world first regulation in 2021, with reporting requirements from 2023. Their new Climate-related Disclosure () requires listed companies, insurers, banks and investment managers to report on how they will be affected by climate change.

Sustainability-related disclosures is also a hot topic Downunder, with Australia鈥檚 Securities and Investment Commission (ASIC) urging businesses to聽. Voluntary disclosure using TCFD is recommended, and mandatory disclosure will likely be aligned with the international standards from ISSB.

The Outlook for Business Leaders

Regulators need to protect investors from greenwashing and create financial security to facilitate an orderly transition, while shifting investments to where they are most needed. We can expect to see continued expansion and refinement of regulatory reporting requirements over time. Companies who do not act on addressing current and future environmental concerns, could face challenges to get access capital or suffer reputational damage.

Digital reporting practices and assurances are stipulated from the outset in some of the new regulations. The biggest obstacles are data availability, quality, and fulfilling new levels of audit scrutiny. More granular and meaningful data is needed at critical points in operations to make decisions and steer a business towards KPI targets.

Some of the new rules also mandate reporting on scope 3 emissions, which is beyond the boundaries of a single corporation. Voluntary standards are currently lacking, as it uses estimates. A significant shift is expected in this area, with groundwork being done by the World Business Council for Sustainable Development (WBCSD)聽.

On How to Get Started

Leaders are acutely aware of the need for scalable technology solutions. They ask two essential questions: 鈥楬ow can we leverage what we already have鈥� and 鈥榟ow can we keep up with change鈥�?聽 By leveraging sustainability solutions that are fully embedded into ERP solutions, like 麻豆原创, additional workloads are minimized. Not only does this produce audit-ready data, but it also allows data-driven, fact-based decisions.

To find out more, visit sap.com聽

The post Why ESG Reporting is Needed to Ensure Global Financial Stability appeared first on 麻豆原创 Australia & New Zealand News Center.

鈥淲e are committed to acting long-term and with responsibility in mind. Our focus and our actions respect the principles of sustainability鈥�聽says Pierre Wiese, Head of Business Solutions Commercial at D枚hler.

• Improving eco-efficiency along the value chain,
• consuming less energy and water,
• producing less CO2

are just a few of the points to which D枚hler has committed itself. Nevertheless, companies are facing complex operating and supply chain structures which means information on the CO2 footprint is often barely available and hardly traceable to the end-to-end business process.

鈥淎n innovative solution to trace back carbon emissions to its roots is necessary and one reason why we collaborated with 麻豆原创鈥�,聽Pierre continues.聽As a long-standing 麻豆原创 customer and valued partner, D枚hler and 麻豆原创 decided to run a聽co-innovation engagement聽to carry out a聽Climate 21 pilot.

In May 2020, D枚hler became the first customer to go live with a pilot installation of 麻豆原创 Product Carbon Footprint Analytics for one of their products. They are now able to trace carbon emissions with聽麻豆原创 S/4HANA听补苍诲听麻豆原创 Analytics Cloud.

麻豆原创 Product Carbon Footprint Analytics

麻豆原创 Product Carbon Footprint Analytics could be explained in the following way:
The four contributors for the product carbon footprint are:

1. 1. Purchased goods
2. 2. Energy (consumed for production processes)
3. 3. Direct emissions
4. 4. Outbound transport

The user maintains emission factors for these and together with quantity data, bill of material and routing data from the 麻豆原创 S/4HANA Cloud or on premise system, the calculation of the product carbon footprint is done within 麻豆原创 Analytics Cloud. This allows insights by product, plant or cost centre (e.g. to compare or analyze within a certain business unit or division), which are the basis for further actions. For example, it might become visible that a certain production step (activity type) or purchased raw material causes a lot of carbon emissions. One possible measure could be to buy raw materials with a lower carbon footprint, replace energy-inefficient machines with more modern ones, or purchase green energy instead of the conventional electricity mix.

The 麻豆原创 Product Carbon Footprint Analytics must be seen in the bigger context of the Climate 21 initiative to cover the full value chain of customers. 麻豆原创 Product Carbon Footprint Analytics focuses on analytics and insights in the first step. These capabilities are ideal to get familiar with, gain first eye-opening insights and take first meaningful actions.

鈥淲ith such a significant innovation, we rely on the expertise and close cooperation with our customers. Together with them and our product management we define business capabilities and integrate them into the product roadmap for our analytical and transactional applications. To run this pilot D枚hler was a great experience for us. Their feedback will directly influence the development of further products in the Climate 21 context鈥�,聽describes Sabine Otholt, Head of Strategic Customer Engagements & Co-Innovation at 麻豆原创.

What聽should customers take into consideration:

Starting a carbon impact analysis of production processes is new for many customers and聽requires intensive collaboration between departments which normally act independently from each聽other 鈥� for example production data specialists on shop floor level will collaborate with process experts from business side. This will be necessary to maintain the right emission factors for different production steps. The same applies in a similar way for purchased goods or raw materials, direct emissions and outbound transport.

Such changes require聽rethinking and new ways of cross team and organisational聽collaboration. In return customers are rewarded with the ability to:

• get an overview on overall emissions and insights that contribute most and check where it makes sense to start reducing
• start to act reducing the carbon emissions your company is responsible for
• build the basis for further (sustainable) reporting
• give information to your customers on the carbon footprint on those products that they buy from you

To minimise聽our carbon footprint, we need to understand the impact of our production and logistics along our entire value chain. 麻豆原创 will help us to improve our operations and transform our product portfolio聽describes Peter Spaargaren, Head of Group Sustainability at D枚hler the benefit of the collaboration.

This co-innovation paves the way for a future in which products are equipped with a CO₂聽label and can therefore influence the purchase decision in the B2B and B2C business.

The post How can software support to slow down the climate change? appeared first on 麻豆原创 Australia & New Zealand News Center.

• Companies today are judged on the positive contribution they make to society.
• Concern is growing about how technology is affecting jobs, inequality, health, and security.
• Digital transformation changes how companies manage their relationships with the larger world.

Indonesia announced plans to move its capital away from Jakarta as the city is sinking 25 centimetres per year due to rising sea levels and land subsidence, with underground water supplies being drained. The average income of the richest 10 percent of the population is about nine times that of the poorest 10 percent across the Organisation for Economic Co-Operation and Development (OECD) countries.

Not our business? Well, it is now. Solving today鈥檚 biggest challenges requires all of us to act, no matter if in the economic, technological, societal, or educational field 鈥� because all our actions are interdependent.

Critical minds might ask why companies should bother, with their primary reason being to make money. These critics should not underestimate the power of the consumer.

Consumers today have access to more information than ever. They know exactly what they want, and they know how to get it. The best product at the best price is always available at their fingertips.

But their criteria have changed 鈥� an increasing number of customers aren鈥檛 just making decisions based on products or price anymore. They are closely looking into what a brand says, what it does, and what it stands for.

It鈥檚 the same with employees; they aren鈥檛 just joining companies for the money. They choose companies that embrace their responsibility toward humankind and the planet. Put simply, companies today don鈥檛 just prosper based on their financial performance, but on how they make a positive contribution to society.

No matter where you look, concern is growing about how technology is affecting issues such as jobs, wages, inequality, health, resource efficiency, and security. These changes are altering the world so drastically that all companies need to undergo a transformation to avoid going extinct.

This transformation means integrating digital technology into all areas of a business to fundamentally change how companies operate and deliver value to customers. While this might be a scary vision for some, it is one of the strongest drivers of change. Companies need to adapt their business models to remain in business.

Technology and digitisation will help them achieve this with intelligent and highly agile digital supply chains that predict and respond to changes in the ecosystem to quickly capitalise on new opportunities and break down old barriers.

To do so, it takes modern technology, flexible data management, and highly agile processes. Only then will companies be able to establish new business models that connect an ecosystem of partners together in an end-to-end value chain that makes life easier for customers.

But transformation is also about a change of culture, which requires a radical rethinking of people, processes, and technologies. Becoming a digital organisation means not only having digital products and services, but also powering core business processes and operations with technology. This often includes tectonic changes to tasks in a company and to the ways colleagues interact within the whole ecosystem.

And just like a business cannot digitally transform unless 鈥� or until 鈥� its people transform, I believe that, while they come with their own environmental costs, technology and digitisation can play a crucial role in developing solutions for a better tomorrow.

Just think about blockchain, with its incredible potential to add trust through traceability across food supply chains, helping manufacturers, consumers, and regulators alike. Artificial intelligence (AI) can empower people with disabilities, for example, by translating eye movements into program commands, or reduce bias in the hiring process. Smart cities work in conjunction with everything from sensors to open data collection and聽smart streetlights聽to provide better services and protect resources.

This sounds easy, but it needs a lot of transformation. Transformation inside companies by integrating digital technology into all areas of their business. Transformation of a company鈥檚 internal culture, with leaders setting the tone of a company, embracing change and embodying and instilling trust for and with their employees. Transformation of society鈥檚 perception of technology.

There is no doubt that technology and digital transformation break down silos and create transparent and unified data for objective decision-making. But even more so, they change how companies manage their relationships with the wider world.

罢丑别听. If we want to create a cohesive and sustainable world, we must be able to look beyond corporate boundaries and toward the societies and communities in which we operate. We need to establish an ecosystem of trust in which we can unite and build bridges, a network of links that allows us to exchange ideas to create a safety net for the most marginalised, those who live in areas of conflict, those whose lives are being disrupted by the climate emergency.

In the end, any transformation will succeed or fail with people. No amount of technology will save an organisation without a competent workforce. Therefore, we must bring people in on this massive transformation toward a better future. As global citizens, we not only have rights, we also have responsibilities and obligations.

Let鈥檚 seize the聽time in Davos聽to discuss and to collaborate, to foster change and to come up with an action plan on how our society is ready to advance. It is up to all of us to use technological advancements to tackle the world鈥檚 greatest challenges and turn them into our biggest opportunities. The world depends on us to do so.

Christian Klein is co-CEO of 麻豆原创 SE.
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The post How to Use Digital Transformation to Create a More Sustainable World appeared first on 麻豆原创 Australia & New Zealand News Center.

麻豆原创 will also donate 鈧�100,000 to the Australian Red Cross. This is alongside local fundraising efforts by 麻豆原创 teams in offices across Australia, including Sydney, Melbourne, Canberra, Perth and Brisbane, raising more than $8,000 in the past week alone.

麻豆原创 is also enabling all employees to donate to organisations of their choice that are supporting those impacted by the fires, through the company鈥檚 workplace giving program. These donations are made through monthly pre-tax pay, with administration costs covered, so 100 per cent of the donations goes directly to the organisation of choice. Free, confidential counselling is also available to all staff and their families at any time.

鈥淭he fires we鈥檙e seeing across Australia are totally unprecedented, and the devastating impact they have had on communities and wildlife across the country has been heartbreaking to watch,鈥� said Damien Bueno, President and Managing Director, 麻豆原创 Australia and New Zealand.

鈥淲e hope the measures we are putting into effect today help support our staff, their families and communities during this incredibly difficult time, while recognising the extraordinary heroism of the volunteers who are on the frontline.鈥�

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