This year’s ASUG Best Practices: SAP for Chemicals, an interactive virtual event Nov. 8–9, will put sustainability front and center to reflect the increasing importance of this key strategic objective to business leaders worldwide.
According to Robin Whitaker, Director of Business Architecture SAP, who will deliver the event’s day-two keynote session, assessing sustainable business outcomes as a key performance metric is recognized today as an essential part of business transformation and integral to the success of any intelligent enterprise.
There’s no time like the present for companies to embed environmental social and governance (ESG) capabilities into projects and take their place as the sustainable enterprises of the future, Whitaker said during an interview to preview the session.
Whitaker will co-host the second day’s keynote session, titled “Building a Sustainable Future,” with Alex Pierroutsakos, Industry Executive Advisor – Chemicals SAP, and Matt Reymann, Global VP Industry Business Unit Chemicals – SAP. Click here to register and learn more about the complete conference agenda.
This is an edited version of our interview with Whitaker.
Q: Your keynote session for the ASUG-SAP Chemicals conference is titled, “Building a Sustainable Future.” Why was that the right title for this session?
A: Sustainability is about meeting the needs of the present without compromising future resources. For the most part, we are consuming more than we can replenish of our natural resources. If we continue along this path, our future generations will be depleted of those resources they need to be sustainable. It’s incumbent that we reduce our carbon footprint.
Today, there’s over 10 million tons of plastics found in landfills, along ocean floors and waste streams. That’s impeding our natural resources. When you think about a chemical manufacturing process, one of the substances required for chemistry is H2O. If you impede natural resources used to make products, it puts you in a compromising position, as a businessperson, to manufacture certain products. All of these considerations need to be evaluated.
I look at sustainability from the perspective of ESG. From a social perspective, another need is to build diverse workforces. We all know diverse workforces function the best because they cause innovation to bubble up. You don’t have all minds thinking alike, in a monolith. Building this diverse workforce to provide the innovations needed to thrive sustainably in the future is what’s key. We have to have these conversations today to build a sustainable future.
Q. Sustainability has become a key strategic objective across many businesses. How would you assess the Chemicals industry’s progress around this topic?
A. Back in the ’80s, I used to work at DuPont. There, I had my first exposure to product safety, to appropriately authoring safety datasheets used for proper transport of certain chemicals and raw materials. Chemical companies have been on the forefront of product safety and transparency in the value chain, as it relates to providing the chemical compositions contained in products.
The chemicals industry has also promoted sustainable business practices. Challenges surfacing now are because of climate change. For example, we understand the importance of tracing our carbon footprint. What was once important was identifying the chemical composition and all constituents contained within a product. Now, what’s become pivotal is doing something: reducing the amount of toxic chemicals and reducing the amount of carbon you’re emitting in the ecosystem.
The understanding that climate change is a real detriment to our future resources has caused the trajectory to accelerate. It’s heightened the focus from “good practices” to “imperatives that businesses have to adopt and incorporate in their strategic objectives.”
Q. Your keynote will provide insights into creating a sustainable chemicals enterprise by leveraging SAP’s portfolio. Can you preview some of the keys to success you’ll discuss?
A. Sustainability achieves its objective when it can combine people, processes, products, and data, all on a single platform, so that sustainability can be embedded in the business model. Think about it: when a product is shipped, you need to know everything in that product, any products that could be toxic, and any products that cannot ship through a certain mode of transport due to their volatility. You need to have all that information in hand in order to move forward.
Embedding sustainability means knowing everything you need to know about the sustainable aspects of business processes, so you can move forward or not move forward in the event of a sustainability issue. If I’m buying raw materials from several different suppliers, and Supplier A is the low-cost supplier, but I need to transport that product from Supplier A to a location across the country, and as a result, my carbon footprint will exceed a certain amount, I’ll know Supplier A is not the most economical supplier to select. Having this intelligence in hand to make appropriate decisions is what’s key. Having all this information embedded within your supply chain or value chain is pivotal to success.
Q. Businesses are now grasping not only the strategic implications of sustainability but also the potential for growth through sustainability. Chemicals companies are making progress in terms of pollution prevention and clean-up, but what would you say to attendees about opportunities for business transformation through ESG capabilities in projects and investing in environmentally sustainable new products and technologies?
A. There’s a distinguishable difference between a linear business model and a circular business model. A linear business model is where products are developed, designed, procured, produced, manufactured, distributed, and then disposed. A circular business model, and a circular economy, is when those products are produced, manufactured, distributed, and then put back into operations, where they can be recycled and reused or regenerated into another product.
If you think about all those steps, and if you’re looking at a product that’s already been produced and redistributed into your value chain, there are significant cost savings. You’re not talking about a new product you’re introducing on the market. You’re talking about the exact same product that you’re using over and over again. There are cost benefits to engaging in a circular economy. And from a sustainability perspective, you’re reducing the amount of chemical you’re disposing of in waste streams, landfills, and ocean floors.
Again, tracing your carbon footprint and knowing what that footprint represents in terms of quantifying it to a value, allows you to determine whether it will cost you more to go with Supplier A over Supplier B, because of the amount of carbon that has to be emitted and that you’re subject to taxation on. Knowing this information, you can not only make sound decisions in terms of what’s the most sustainable approach but also what’s the most cost-effective approach you can take, with regard to the products you place on the market and the raw markets you buy from your source of supply.