Green Controlling: Definition and application with SAP products
- Sustainability Solutions
- green controlling
- 6 min reading time
Dea Marovic
What is Green Controlling and how does it differ from traditional controlling? What green controlling solutions does SAP offer? Read what makes Green Controlling the controlling of the future and why it makes sense to introduce Green Controlling in your organization and what benefits it can bring. Because investments in sustainability pay off in the long run!
What is Green Controlling?
A controller controls. At least, this is what the linguistic similarity between controlling and monitoring suggests. But this is a misunderstanding. In the past, the focus of controlling was primarily on planning, controlling and information gathering based on data - the "masters of numbers," as controllers were also called for a long time (Handelsblatt, 2007). Even though controlling is a component of management accounting, it is by no means the most important or even the only one. This is because controlling deals with the overall management of a company.
It is understandable that sustainability and controlling are not directly associated at first glance. This is due to the fact that controlling is often seen as a number-oriented analysis and management tool, while sustainability is perceived more as a soft communication-driven instrument. However, the demands on sustainability are growing and thus sustainability itself is increasingly becoming a part of the core business, which contributes significantly to the company's success. Conversely, this means that the requirements for controlling will also adapt and change.
The importance of sustainability is increasing, and with it the field of green controlling. This is because controlling can also contribute to sustainability by including sustainability components in goal setting, planning and control.
Companies today engage in an increasing number of activities that can be subsumed under the term sustainability. From social engagement, donations and sponsoring various (sustainability) projects to switching to renewable energies. However, controlling the issues that fall into this category is not synonymous with sustainability controlling or green controlling, but rather specific project controlling.
Sustainability controlling is not the controlling of specific sustainability measures, but more comprehensive. It is not only concerned with sustainability projects, but also with controlling the core business of the company. It is therefore not a functional special discipline within controlling, as otherwise the topic of sustainability would be assigned a special role outside the value chain.
As in traditional controlling, which is intended to facilitate decisions by preparing and analyzing information relevant to decision-making, this task also applies to sustainability controlling. The difference is that the three dimensions of sustainability - ecology, economy and social issues - are integrated into the existing controlling concept. Sustainability controlling thus represents a further development of traditional controlling. The principle of sustainability is to be incorporated into both operational and strategic corporate management, which makes sustainability controlling an interface between the value determination of the corporate strategy and the individual measures derived from it.
Considering the fact that sustainability controlling takes into account all three pillars of sustainability, this term must be distinguished from the equation of the term green controlling. This is because green controlling "only" takes into account the ecological aspect of sustainability and is therefore to be seen as a sub-area of sustainability controlling. It therefore has the task of taking into account the ecological aspects of sustainability in corporate controlling. These aspects must be integrated more strongly into corporate controlling in order to achieve a review and control of the economic efficiency of ecological strategies and their achievement of goals.
Climate protection is one of the greatest challenges and opportunities of the 21st century. Century. The importance of climate protection is becoming increasingly important and is also playing an ever greater role in today's industry. Companies are therefore increasingly looking for holistic solutions that can help them select suitable measures (Prabhoo, 2021). More and more companies are focusing on sustainable business and incorporating ecological aspects into their corporate strategy, whether to withstand public pressure, to make a real contribution to combating climate change, or simply to reduce costs through CO₂ savings. In many companies, so-called "greening" has found its way into almost all operational processes.
Today, customers are no longer only interested in the product they are buying, be it the price, the design, certain functions or the expected benefits. Rather, the image and external impact of the manufacturer play an increasingly important role in the decision-making process. In addition to increasing customer demands for sustainability, there is also growing pressure from politics and consumer protection - be it through stricter legislation to comply with sustainable laws or the provision of appropriate consumer information. In order for companies to pursue their defined sustainability goals as economically and effectively as possible, these should be incorporated into the company's planning and controlling systems, making green controlling an important corporate tool in today's world.
There are good reasons to introduce Green Controlling into every company. Not only the sustainability aspects themselves, which contribute to the fight against climate change, but also the profitability of a company is significantly influenced by the topic of sustainability. Everything has to become "faster, better and more sustainable".
In particular, future legislation may mean that green controlling will no longer be a "nice-to-have" tool for a company, but rather a "must-have" for every company. Sustainability will no longer be a separate business field, but rather a part of every action in the value chain of every company, which in turn argues for the introduction of green controlling.
Why should companies carry out green controlling?
The topic of sustainability is changing the market and thus also the market requirements. The new market requirements can be met with the help of new strategies, processes and the sustainability monitoring of company data (such as the corporate carbon footprint or the product carbon footprint). This makes the new topic area of "Green Controlling" particularly interesting, as various entrepreneurial potentials can be derived from it. The 4 main reasons why companies should introduce Green Controlling are listed below:
In summary, a successful green controlling strategy is almost always accompanied by a competitive advantage. Green controlling can help to prove the economic efficiency of ecological strategies, to monitor their target achievement and, with the help of the "right" key figures, to enable a transparent and objective approach to green issues.
Green Controlling with SAP
With our Sustainability Analytics solution, you can capture, monitor and analyse your sustainability performance using the SAP Analytics Cloud.
Our solution can be customised to your sustainability requirements and existing sustainability KPI's, allowing you to create your very own individual sustainability dashboard. We can also help you when it comes to regulatory legislation and adapt your sustainability reporting accordingly.
With SAP Analytics Cloud, you can make safer, more sustainable decisions. You create a cross-departmental strategic alignment for more sustainability. With the help of various add-ons such as the SAP Carbon Accounting can be used to enable various sustainability evaluations, such as the calculation of the ecological footprint, and to visualize results.
Learn more about the SAP Analytics Cloud here.
SAP Data Warehouse Cloud integrates and analyses data in a multi-cloud solution for a data-driven, sustainable business.
Learn more about the DWC here.
SAP's new product, the Sustainability Control Tower, enables companies to create holistic reporting, taking into account various sustainability standards. It integrates, harmonizes and organizes data from SAP and non-SAP applications into a central sustainability data warehouse. The data can cover a wide range of business areas, such as financial data, human resources data and operational data.
The holistic reporting solution promotes targeted action by providing an overview of a company's overall sustainability performance.
You can find out more about the Sustainability Control Tower here.
SAP Product Footprint Management enables regular and fully comprehensive calculation of a product's CO₂ footprint throughout the entire product lifecycle.
The product integrates with your SAP S/4 HANA Cloud - or SAP S/4 HANA system and uses your existing business data in combination with environmental factors to calculate the footprint of your products.
You can find out more about calculating the carbon footprint here .
SAP's Profitability & Performance Management solution helps you manage your sustainability performance. It helps you make better and more sustainable decisions by adding advanced business models, granular profit and cost analysis and simulation capabilities.
Achieve your sustainability goals through connected tools that offer advanced, flexible modelling, automation and real-time analytics.
You can find out more here .
With SAP Environment, Health, and Safety Management (SAP EHS Management), you proactively identify, analyse, and mitigate environmental, health, and safety risks to ensure safe operations. Manage chemicals safely, monitor occupational hygiene and reduce your environmental impact.
You can find out more about SAP EHS here.
Taking a step towards a greener future with Green Controlling?
Sustainability is important to you and you want to learn more about the opportunities and possibilities of Green Controlling? If so, we would be happy to present all the benefits and opportunities of our SAP Sustainability Solutions to you in person. Simply get in touch with us!
