Accelerating Your Journey: AI’s Transformative Role in Sustainability

As the 29^th UN Climate Change Conference (COP29) opens today in Baku, Azerbaijan, the global community continues to face an urgent call to action on climate change. Coordinated, innovative solutions are paramount to addressing this complex crisis, and advanced technology - especially AI - stands as a powerful enabler for transitioning to a net-zero economy. Recognizing AI's potential to drive climate action, SAP has delivered two use cases that highlight how AI-driven sustainability software can streamline processes, eliminate manual work, and enhance precision.

With automated Emission Factor Mapping in SAP Sustainability Footprint Management and AI-assisted ESG Report Generation in SAP Sustainability Control Tower, SAP can support companies in setting meaningful environmental targets, ensuring compliance, and managing carbon footprints with heightened efficiency and accountability.

"Sustainability executives are on board with artificial intelligence. More than half say improving data analysis and consolidation using AI are top actions they will be taking over the next three years to enhance ESG capabilities."

Addressing the Strategy Execution Gap in Sustainability Reporting, KPMG, February 2024

To calculate product carbon footprints accurately, companies must assign emission factors to thousands of purchased products. Ideally, emission factors are provided directly by suppliers, but often companies need to use industry averages based on product attributes like name, category, or location. Up until now, this mapping process has been a manual, time-consuming, and error-prone task that required expertise in lifecycle assessment (LCA), determining the environmental impacts associated with all the stages of the lifecycle of a product, process, or service.

To help make this process easier and more efficient, SAP has introduced an AI-based capability within the SAP Sustainability Footprint Management solution. SAP's AI engine can automatically suggest emission factor mappings for purchased products and services and can assign a similarity score to each recommendation.

For the mapping, SAP generates embeddings for both, emission factors from LCA databases and product data from the ERP system. Embeddings are vector representations - numerical representations of textual information to provide context and meaning of a text. Both sets of embeddings are saved in SAP HANA Cloud vector engine.

The system compares these embeddings to help identify the quality of the mapping and provide suggested results. This helps businesses reduce manual effort by up to 80% and calculate product and corporate carbon footprints quicker and with greater precision, even without LCA experts. It can also accelerate their sustainability reporting timelines and help them respond faster to regulatory demands.

AI-Assisted ESG Report Generation in SAP Sustainability Control Tower

In addition, SAP embedded a generative AI-powered reporting capability within SAP Sustainability Control Tower. Creating sustainability reports that align with internal strategies and meet external standards, such as the CSRD, is essential for staying compliant and transparent. However, gathering relevant environmental, social, and governance data and drafting these reports can be highly resource-intensive, involving multiple teams and complex data sources.

That's why SAP's AI capability helps generate comprehensive ESG report drafts based on best-practice templates and the company's available ESG metrics. Once users select a template, AI can automatically collect the most relevant metrics from SAP Sustainability Control Tower, create graphs to visualize the data, and generate a polished report draft. That helps companies spend up to 98% less time collecting ESG metrics and up to 80% less time in creating a report.

Some key benefits of the feature include:

• Efficient data utilization: The AI-powered solution leverages large language models and SQL grounding techniques, which help transform natural language inquiries into precise database queries that access real-time data from structured databases. That's how it transforms raw data from customers' systems into accurate, comprehensive reports tailored to specific timeframes.
• Visualization: The AI generates insightful textual content through SQL-based data retrieval, helping to ensure data integrity and compliance. Additionally, it creates visually appealing charts and tables to help enhance report clarity and understanding.
• Automated verification: Our robust system prioritizes data security by avoiding direct SQL query execution and employing a Retrieval Augmented Generation (RAG) process to help safeguard against informational discrepancies.

Watch a demo to learn more.

The Future of AI in Sustainability

The use cases above are just the beginning. AI's potential to transform sustainability management is enormous, and at SAP we are accelerating the creation of use cases to be at the forefront of our customers' sustainable transformation journeys. For example, users will be able to interact through natural language with SAP's AI copilot Joule that can offer actionable recommendations and simulations to help improve environmental and social performance. And we will continue to apply AI to make the acquisition of sustainability data easier.

Using SAP's ERP-centric, cloud-based, AI-enabled approach, we're working to ensure AI's massive potential turns into both real business transformation and sustainability outcomes. AI and technology can help us better understand and monitor the environment, improve energy efficiency, optimize resource management, and develop innovative solutions for reducing greenhouse gas emissions.

As COP29 convenes in Baku, it is essential for global leaders and decision-makers to fully explore AI's transformative role in addressing climate change. The urgent demands of this crisis call for the kind of innovative, AI-driven solutions that can unlock greater precision, efficiency, and impact. By leveraging AI not only to streamline business operations but also to set and meet ambitious environmental goals, we are shaping a future where technology empowers businesses to thrive responsibly, contributing actively to a sustainable and resilient planet.

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

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