The net-zero transition: Here are 8 steps organizations can take towards a sustainability plan 

Achieving net-zero emissions is a critical cross-sector climate-action goal, yet a complex undertaking with many significant but surmountable obstacles.

At SAP, a global technology company committed to becoming net zero by 2030, we have identified some of the most important challenges and solutions for a feasible pathway to net zero.

Aligning net-zero goals with broader business objectives may require a strategic overhaul. Predicting future technological advancements, market shifts and regulatory changes adds complexity to long-term emission reduction planning.

But it helps to identify synergies between environmental goals and revenue growth, demonstrating that sustainability can drive success.

Setting ambitious net-zero targets while keeping them realistic and achievable is also not straightforward. We’re engaging with various experts to ensure goals are aligned with the Science-based Targets Initiative. Setting interim targets to track progress and celebrate milestones to maintain momentum is useful.

Transitioning to renewable sources like solar, wind and hydroelectric power can involve significant financial investments and infrastructure changes. Even when implemented, renewable energy sources can be intermittent, making it crucial to develop efficient energy storage solutions for a consistent power supply.

Some sectors lack well-developed technologies for decarbonization, creating challenges in finding suitable alternatives to high-emissions processes. SAP uses 100% green electricity to power the company’s data centres and is fitting solar across several operations.

We also invest in collaborations to accelerate and scale green hydrogen production and other solutions. Every sector is different, so working with start-ups and other innovative organizations in your industry is important. Switching to low-carbon technologies and processes often requires substantial upfront investments that might not yield immediate returns, especially for smaller firms that may struggle to secure financing for net zero investments.

Organizations can explore funding options like green bonds, government incentives and partnerships with sustainable investors. Prioritizing projects with short payback periods can ease financial strain and build confidence.

Implementing advanced data management systems and leveraging IoT (Internet of Things) technology can streamline data collection. Standardizing reporting through platforms like CDP – the disclosure system for emissions – enhances transparency.

Looking at sustainability management holistically is essential. In that regard, cloud-based digital technologies can offer flexible and rapid integration of varying dataset reliability. It can scale at the same pace as the company’s net zero implementation.

Accounting for Scope 3, or indirect emissions, such as those from supply chains and product use, can be difficult and involve gathering and sharing new data types and cooperation from multiple stakeholders. Elevating capabilities to track emissions across upstream suppliers and downstream logistics down to the individual product and transaction is vital. This level of transactional carbon accounting involves moving from using estimates and averages to gathering and sharing actual, accurate emissions data across the supply chain.

Suppliers might need to be more agreeable or equipped to meet the emission reduction requirements of their buyer organizations. Regulations and stakeholder demands are leading to increasing pressure on suppliers and disruptions in supply chains as a result.

SAP’s “Top 100 Supplier” programme aims to reduce overall emissions in SAP procurement through a systematic benchmarking, validation, training and support process.

Consistently evolving sustainability regulations and reporting across different jurisdictions can create uncertainty for companies planning and investing in emission reduction strategies. Net zero teams must stay informed and proactively adapt strategies accordingly.

One of the best ways to keep aware is to actively participate in industry associations and respected non-government organizations that can provide the latest guidance. These organizations can also help your firm advocate for consistent and supportive policies through industry associations. Because there are expanding and more demanding disclosure requirements, developing an enterprise-wide ESG (environmental, social, and corporate governance) data management and reporting capability is vital to enhance the efficiency and accuracy of net-zero and other sustainability reporting.

Public perception is everything in net-zero communications, as they can foster scepticism if efforts are perceived as mere branding and marketing rather than genuine, positive business action. Engaging with stakeholders is essential to listen, learn and focus on the authenticity of your efforts and avoid making exaggerated claims.

At SAP, we’ve learned that developing a credible, audited, integrated report that includes transparent reporting of a full range of non-financial metrics, including science-based targets, has created new processes and positive discipline throughout the entire organization.

An EY survey of 500 Chief Sustainability Officers globally found that more than 28% of sustainability leaders believe that difficulty hiring talent with climate change skills is one of their biggest external barriers to achieving net zero.

It’s essential to clearly identify the skills needed across the organization and work closely with HR and talent development to hire and develop the key capabilities. At SAP, we design and publish a range of sustainability enablement programmes on our learning platform openSAP, which supports employees with specific certifications and manages several industry partnerships such as with the World Economic Forum, Ellen MacArthur Foundation, World Business Council for Sustainable Development, and econsense, which offer valuable conduits to knowledge and skills.

Achieving net-zero emissions often requires fundamental changes to an organization’s processes, which can meet resistance from employees and other stakeholders. SAP continually reinforces that our net-zero transformation is the responsibility of every business unit leader and all functions across the enterprise, not just the office of the chief sustainability officer.

Regular communication across the organization that every function needs to contribute and nearly every job has a role to play can elevate engagement, spur needed skills development and lead to open innovation. Messaging that net-zero transformations are complex, multi-dimensional, and good for society, business and, importantly, individual employee development greatly helps overcome organizational resistance.

Striking a balance between near-term profitability and long-term sustainability is challenging but can be achieved. Overcoming net-zero transformation challenges requires a multi-faceted approach involving technological innovation, supportive policies, cross-industry collaboration, innovative partnerships and a strong commitment to sustainability from all levels of an organization.

By acknowledging the financial, technical, cultural and regulatory obstacles and adopting a holistic approach involving stakeholders at all levels, organizations can better navigate the way to a resilient, net-zero future.