As SAP furthers its strategic commitment to sustainability and pursues comprehensive commercial offerings designed to enable environmental, social, and governance (ESG) impacts for customers, the current SAP suite of Environment, Health, and Safety (EHS) applications has a pivotal role to play.
For Michael Censurato, Global Solution Manager for SAP EHS, who drives go-to-market strategy and business development activities for SAP sustainability solutions such as SAP EHS Environment Management and the rest of the EHS portfolio, improving the visibility of market solutions is a top priority. When SAP Press approached him about authoring an e-book on EHS management in SAP S/4HANA, Censurato seized the opportunity to craft a functional introduction to SAP EHS for decision-makers, salespeople, consultants who want to expand their skillsets, and end-users starting to implement.
In his 70-page e-bite, “Introducing Environment, Health, and Safety (EHS) Management with SAP S/4HANA,” Censurato discusses various SAP solutions for managing the health and safety of employees and equipment in SAP S/4HANA, detailing processes for incident management, occupational health and safety reviews, and environmental policy compliance. Providing a big-picture overview of how SAP EHS solutions are deployed with SAP S/4HANA, the e-bite also weighs the future possibilities of these EHS solutions, considering how they can ready industries for emerging regulations and best practices.
In this ASUG interview, Censurato discusses the evolving importance of EHS solutions and the design philosophy guiding the integrated SAP EHS Management platform.
This interview has been edited and condensed.
Q: As an enterprise resource planning (ERP) software package for large enterprises, SAP S/4HANA is meant to cover all of an enterprise’s day-to-day processes and core capabilities. For customers, maximizing their ERP investment involves continuing education and learning more about its capabilities. Tell us more about EHS solutions within SAP and what customers need to know today.
A: Environment, health, and safety (EHS) has always been a business topic, from compliance with regulations to companies trying to reduce their environmental impact and make sure workers are safe. These processes and topics have been relevant to industries for 50 years. EHS solutions, however, have remained a niche market. Especially from a software standpoint, solutions for EHS have been secondary to finance, HR, supply chain, and so on.
Today, however, companies face renewed scrutiny and focus on sustainability, which means EHS—once a niche topic and cost center within companies—has ended up as a driver for branding. You want to drive EHS for profitability, sustainability, and business continuity. It’s in the limelight in some ways.
SAP is pushing out its sustainability solutions, which include SAP EHS Management. The world at large is now more focused on the topic. In addition to climate change, COVID-19 was essentially an EHS topic: “How do you prevent the spread of COVID in the workplace? How do you assess risk? How do you deal with illness tracking or vaccination tracking?” EHS has become much more relevant in recent years.
Q: Given this topic’s modern resonance and its development as a growth area for SAP, how did you set a frame for this e-bite and decide what to focus on?
A: I sought to address sustainability, first and foremost proving that EHS is a key data source for the broader sustainability topic, whether we’re talking about waste generation, worker safety, or carbon emissions and solutions. In EHS, for years, we’ve been tracking all these areas which hold relevance to ESG disclosure and sustainability improvement.
I sought to convey the evolution of these topics. Consider waste management. In the past, you had to track how much waste you generated and how much you disposed of. Now, waste management is related to circularity. It’s not just about compliance. Now, you have waste and either dispose of it or find ways to sell or recycle it, which is a more circular way of thinking that stops waste from going to a landfill. Without changing the functionality or business process, that evolution means that the software takes on a new significance and value proposition it didn’t have before.
In addition to functional chapters covering how this software works and what it does, I wrote chapters around deployment, domain knowledge, and our vision for the future of intelligent processing, IoT, and analytics views. I could leverage all the experiences I’ve had in my career to write those. With SAP, it’s not just about buying a piece of software. It’s about what you do next. How fast can you implement it? Does it meet stakeholder requirements? What does the architecture look like? What is the rollout like when you have to train users? Purchasing the software is the first step, and installing it is almost nothing compared to making it a successful solution in the end, ensuring users accept it.
Q: From a business standpoint, as well as from a software standpoint, what recent evolutions have you observed regarding EHS and sustainability solutions?
A: The market is growing like crazy. The EHS software market has grown every year for the past 10 years. It’s recession-proof, and it’s anticipated to grow by another 30 to 40% by 2027. The strength is there, driven mainly by this focus on sustainability.
From a business standpoint, the prospects are better than ever. The deal sizes increase, as does your ability to talk to the C-level of an organization rather than an operations team. Fifteen years ago, you’d talk with an EHS manager at a plant, and they’d select software for their plant to be compliant. Now, you're talking to a chief sustainability officer, the CFO, and the CEO. You’re discussing branding and carbon credit tracking, signing off on ESG disclosures where you need confidence in your data. You’re talking about worker safety and how there might be scrutiny of how workers are treated. There's a social aspect of this as well.
In terms of functionality in the software, processes at the EHS level haven’t changed that much. For 20 years, we’ve had to handle waste and calculate carbon emissions. The equations haven’t changed that much. The data collection needed hasn’t changed that much. You always had to track injuries for workers, worker wellness and health, and hazards. All that was being tracked beforehand, but that functionality is now scrutinized in a different way. It’s more valuable. It’s more relevant.
From a software functionality standpoint, as I work with developers, the base processes haven't changed. You see more with analytics and how you use data. It’s not simply about compliance anymore. It’s about intelligent analytics, predictive models, insights from machine learning about process improvement, and sustainability performance. But for EHS, the base processes are essentially the same as they've always been.
Q: In this publication, you cover the design philosophy of the integrated SAP EHS Management platform and consider three solution attributes—situational awareness, certain levels of autonomy, and ubiquity—through which SAP EHS Management can drive more sustainable operations, be a main data source for sustainability metrics reporting, and serve as a tool for operational excellence. Can you break that down for readers?
A: Over the past 10 years, SAP has pushed the theme of the intelligent enterprise across the market. In that time, we asked, “How do we look at our EHS processes? How can we make them more intelligent?” We wanted to ensure that EHS practitioners didn’t need to worry about entering data or handling transactions, instead letting them focus more on performance and situation.
- In terms of situational awareness, with the IoT, which I discuss in the book, what’s intelligent, for example, is a wearable device that detects incidents and automatically creates records in EHS. That way, the practitioner doesn’t need to spend time typing and can focus on the incident and any injured person.
- For certain levels of autonomy, we focused on semi-autonomous processing, wherein the system is triaging data, suggesting possible causes of an incident, and noting past corrective actions performed to deal with similar incidents. The system can identify emission results and suggest improvements based on what has been done in other locations. The system can automatically check all your locations and identify where else you have a certain piece of equipment, so a risk identified in one location will be identified at other locations. The system drives the process more proactively and gives more actionable intelligence to practitioners, plant managers, and even executives.
Q: In studying sustainable operations, what other relevant trends have you identified related to this subject?
A: One concern that came up involves “greenwashing,” in which companies pledge certain improvements but don’t do much in reality. Companies would issue one talking point from the marketing side but continue to create pollution, treat their workers poorly, and so on. 20 to 30 years ago, almost all companies were guilty of greenwashing, saying what they felt they had to in order to protect their brands.
Today, there is more scrutiny, accountability, and reporting, so there has been more progress. In recent years, I’ve seen all these pledges that companies and governments are making around getting to net-zero carbon emissions or zero waste by 2050. Last year at SAP Sapphire, my presentation featured the theme of “Don’t Talk to Me About 2050,” and in it, I asked, “Why aren’t we doing something now?” All these pledges are nebulous and not binding. Most of the corporate executives making those pledges may not be around in 2050.
If we’re talking about zero emissions in 2050, why can’t we reduce emissions by 10% in 2025? Let’s look at our actual operations right now and reduce energy consumption by 10%, reduce waste generation by 10%, and make those improvements, instead of talking about 2050. The United Nations has stated that it doesn’t see sufficient progress toward net-zero emissions in 2050. We don’t see enough tangible progress overall.
My challenge to SAP customers is to implement software like SAP EHS Management and related software for asset management, manufacturing, and HR. We can now innovate at the operational level to drive more sustainable operations and show tangible progress. The trends are not all positive, even after we’ve talked about this for years, so what do you do now? Let’s get the right applications and the right operational views to make small fixes now. Rather than mainly focusing on corporate performance, let’s get into the weeds: plant by plant, department by department. Let’s ask, “What can you do right now to make a quick improvement?” Let’s just start with that.