Sustainability and ESG

Now’s the time to focus on a sustainable future

To build a sustainable world, EY teams are helping organizations in every industry change the way they work. This fundamental change is a moment of historic opportunity because it’s only by creating sustainable value that we can transform at the scale and speed we need.

Focusing on going beyond shareholder value is now mainstream. The best businesses are defined by more than their short-term profitability. Organizations with good performance in material sustainability measures outperform organizations with weaker performance, demonstrating that investments in sustainability are shareholder-value enhancing. 

Leading companies drive broad-based prosperity by creating value for shareholders, customers, employees and society alike. And when businesses can make a stronger case that they are creating long-term value for stakeholders across society, they can restore much-needed trust. The value of this trust is increasingly recognized by capital markets through a lower cost of capital. 

To be successful, companies now need the capability to:

• Create a “value-led” sustainability strategy
  
• Employ leading practices in executing the sustainability strategy (including innovation)
• Make the broader environmental, social and governance (ESG) metrics and KPIs work for leadership as well as a wide range of stakeholders

Regulators, investors, employees and customers are also demanding improved sustainability performance. To respond effectively to these new expectations, companies need to be able to:

• Make decisions and manage the business in a way that balances profitability with sustainability
• Respond to a wider set of stakeholders’ interests

The challenge

Chief executives are setting a compelling vision for their broader organizations for a more sustainable business future, usually in relation to net-zero greenhouse gas (GHG) emissions. But often, they lack a broader ESG integrated strategy, the associated KPIs and the performance management tools to provide long-term value-based sustainability outcomes at scale. As a result, they face challenges in delivering these strategic promises, showing progress, and responding to evolving investor, consumer, and stakeholder expectations.

Challenges

• Misalignment between strategy and sustainability measurements and KPIs
• Insufficient data and performance oversight across the company’s value chain
• Lack of process and data consistency
• Concerns about ability to respond to emerging regulations
• Lack of agile and scalable technology
• Inability to integrate climate data, including scenarios, to be translated into financial risk and opportunity

Needs

• Trusted real-time data that helps guide strategy setting and financial and nonfinancial performance management
• Assurance around sustainable transformation
• Ability to manage profit vs. planet effectively
• Manageable step-by-step approach
• Leading practices in executing strategy and sustainable business operating model design
• Agile digital and scalable technology that provides short time to initial value

The EY and SAP^® approach

SAP’s capabilities around sustainability data and performance management as well as reporting can provide:

• The decision-making capabilities required for true assessment of benefits and cost of sustainable strategies — a value-led sustainability strategy
• Transparent, trusted data for communications with internal and external stakeholders, including regulators, investors, employees, customers

And they can help lower the cost of capital by:

• Maximizing institutional investor base by increasingly using ESG as exclusionary criteria for portfolios
• Improving access to sustainable finance
• Enabling management of risks that occur beyond the usual strategy and risk management time frame (three to five years)
• Automating reporting for an evolving range of standards and requirements

EY and SAP: a powerful combination

The EY organization and SAP are market leaders in the strategy, design and implementation of enterprise performance management for the sustainable business of the future.

Delivery of this new multi-stakeholder business requires agile, powerful platforms that provide high-quality, timely and auditable information about companies’ ESG performance, while satisfying external reporting standards.

The EY organization is a trusted advisor in creating long-term, value-led sustainability strategies and defining reporting methodologies, frameworks and standards for finance, tax and transactions. SAP is the market leader in enterprise software, with 77% of the world’s transactions touching an SAP system¹.

SAP has the offerings that deliver enterprise-grade internal and external financial reporting and performance management. SAP also has the tools such as SAP Profitability and Performance Management^® (PaPM), SAP Sustainability Control Tower^® (SCT) and SAP Product Footprint Management^® (PFM) that can deliver this enterprise-grade capability for nonfinancial, sustainability reporting value, scenario modeling and performance management across multiple dimensions.

Together, the EY–SAP alliance provides trusted and strong brand collaboration with the right capabilities to help large corporations respond to the challenge. When business works sustainably, the world works better — for business, people and the planet. Contact us today to see how you can thrive in a better, more sustainable working world. 

Download more details (pdf)