SAP: AI & Data Needed to Bridge COP29 Climate Commitment Gap

In the face of soaring demands from governments worldwide, technology powerhouses are increasingly required to develop sophisticated systems aimed at measuring and minimizing their environmental footprint.

This necessity grows particularly urgent as the deployment of sophisticated artificial intelligence (AI) technologies like large language models (LLMs) expands.

Analysts forecast that the accelerating expansion of AI infrastructure might lead to emissions volumes matching those of Saudi Arabia's annual output by the end of this decade.

Reacting to these projections, legislative bodies across the European Union (EU), US and Asia have introduced mandatory climate disclosure obligations for large enterprises, which poses significant operational challenges for those lacking robust environmental impact tracking frameworks.

This regulatory evolution opens a substantial market niche that several leading technology entities are keen to exploit.

Firms like Microsoft, Oracle and Salesforce have initiated offerings designed to assist corporations in calculating their carbon outputs, complemented by a vibrant startup scene that continuously innovates in this arena.

Sophia Mendelsohn, Chief Sustainability and Commercial Officer at SAP, an influential provider of enterprise resource planning software, highlights the crucial role of data collection and artificial intelligence in helping companies adhere to the pledges made during global climate discussions, such as those at the United Nations climate conference.

By providing critical services to most of the Fortune 500, SAP views technology as key to fulfilling the agreements established at recent conferences like COP29 in Baku, Azerbaijan.

Despite new frameworks for climate finance and reinforced national emission cut commitments, many organisations still find execution challenging.

Technological Advances in Climate Data Tracking

Sophia insists that companies already have the necessary data to chart their environmental impact.

"Sustainability data is available in every organisation's ERP system, so it’s time to start automating data collection and reporting processes to ease some of the regulatory burden," she says

Enterprise resource planning (ERP) systems, which streamline various business operations and manage customer relationships, store comprehensive data on aspects like supply chains, energy consumption and raw materials — key measures of environmental impact.

As the push towards renewable energy sources gains momentum, tech companies are spotting opportunities to craft enhanced measurement tools.

Despite growing investments in renewable resources, fossil fuels continue to be a staple in many economies.

SAP notes that prospects are growing in areas like carbon trading and detailed emissions tracking at a product level.

These domains require accurate emissions measurements and vigorous validation of carbon credits.

“Companies should leverage IT spending to support sustainability initiatives, specifically by applying generative AI to optimise climate solutions and create circular products,” says Sophia, who suggests that AI tools could help companies analyse their environmental impact and identify areas for improvement.

Emergence of unified carbon reporting standards

The development of these advanced tracking tools coincides with increased regulatory demands for environmental openness.

The EU's Corporate Sustainability Reporting Directive requires 50,000 companies to disclose environmental data.

Similar requirements are cropping up in other parts of the world, such as the planned climate disclosure regulations by the United States Securities and Exchange Commission and Singapore’s mandates for financial entities to report climate hazards.Discussions at COP29 focused on the necessity for globally consistent standards in emissions reduction and accounting.

Financial institutions echoed the need for universal measurement frameworks that facilitate international comparisons of environmental efforts.

As climate considerations increasingly influence corporate strategy, seamless integration between finance and sustainability departments becomes crucial.

“Effective climate action demands collaboration between chief sustainability officers and chief financial officers, as climate change has evolved from an ethical and environmental issue to a pressing financial imperative,” says Sophia.

“To accelerate progress, we need globally harmonised policies, rigorous carbon accounting frameworks and advanced technology solutions. By embedding AI-driven innovation, robust reporting standards and actionable insights into business operations, we can ensure that COP events, such as COP29 in Baku, are remembered as turning points – not just discussions. While the challenges ahead are formidable, the opportunities for transformative action are even greater – and SAP is here to lead the way on a low-carbon, circular future.”

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