Sustainability In Defense And Security: Why It’s E...

“We simply must do everything we can in our power to slow down global warming before it is too late. We can save our planet and also boost our economy at the same time.”

You may now be wondering what this has to do with Defense and Security organizations such as armed forces, firefighters, police, ambulance services, or aid organizations. The answer is simply more than most people think. For one thing, according to the leading consultancy McKinsey, D&S organizations account for approximately 50% of governments’ carbon emissions from fleets and facilities in countries like Canada and the United Kingdom, and up to about 80% in the United States of America. On the other hand, if you consider global CO2 emissions, the military sector accounts for 1-5%. Although this stake does not seem high at first glance, it certainly does when you set it in relation to other business sectors and see that the emissions are comparably high as in the aviation or shipping industry. This means that any government that aims to reduce its overall emissions needs to consider its defense forces in its climate action plan too. For another thing, current, state-of-the-art sustainability solutions do not really harm the organizational performance or the practical operational readiness of military organizations anymore. This is especially because key processes, such as the measurement of emissions, are usually run in the background through automated calculations and the power of highly innovative sensor technology and software. But more on that later. Before that, I want to inform you about some additional statistical data and facts about sustainability. The consulting company Boston Consulting Group (BCG) found that the global defense industry’s share in global CO2 emissions could rise significantly from 2% in 2021 to 25% in 2050 if the industry does not take active action to reduce its emissions. But what do these emissions look like in detail?

Figure 1: CO2 Emissions of the US Department of Defense (2023)

As the above pie chart of the CO2 emissions of the US Department of Defense in 2023 shows, most emissions result from vehicles and equipment or purchased electricity. In Germany, however, where the emissions of the Bundeswehr increased by 17.9% in the period of 2019 to 2021, we see a somewhat different picture since most of the increase results from increased fuel consumption of the air force as well as increased heating requirements of the Bundeswehr’s military infrastructure. Interestingly, as the well-known Nature magazine pointed out in an article, many military organizations around the world still do not measure and report their emissions in as much detail as other governmental organizations or private companies do. In contrast, 95% of the largest companies globally publish ESG (environmental, social, and governance) reports regularly.

What Actions are Required to meet the Climate Targets?

However, although the above statistics may not look really promising to the reader, we luckily see that the problem was recognized a long time ago by many Defense & Security organizations. Military organizations such as the US Department of Defense, the German Bundeswehr, or NATO have actively created climate action plans within the last few years:

The North Atlantic Treaty Organization (NATO) in this regard set itself the following targets in 2021:

Reduction of greenhouse gas emissions by at least 45% by 2030.
Achievement of net zero emissions (Net zero emissions occur when the amount of greenhouse gases emitted equals the amount removed from the atmosphere) by 2050.

The European Union, on the other hand, has set the defense sector within the Union similar climate action goals:

Reduction of greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.
Carbon neutrality by 2050.
Increased use of renewable energies and focus on improvement of energy efficiency within military operations.
Implementation of sustainable practices in defense operations.
Passing of a so-called “Climate-Security Nexus”, that addresses the link between climate change and security threats, thereby including climate considerations into defense planning and operations.

As can be seen in the text above, there are already a number of promising strategic plans, that include proven concepts and best practices for reducing greenhouse gas emissions of military organizations. However, specialized management consultancies such as BCG and McKinsey in this regard have drawn up a number of additional recommendations for making defense organizations more sustainable:

Recommendations from McKinsey

McKinsey suggests leveraging low-carbon technologies by using electric vehicles, sustainable aviation fuel, and renewable energy sources. Additionally, the consultancy recommends putting the focus mainly on non-mission-critical areas. This according to McKinsey allows armed forces organizations to achieve a 60% reduction in Scope 1 and 2 emissions. Other suggestions from the company include to establish an end-to-end consideration of sustainability in value chains and supply chains of Defense and Security organizations.

Recommendations from the Boston Consulting Group:

The US-based consulting company Boston Consulting Company (BCG) principally makes similar suggestions. It’s main recommendation is to make significant investments into sustainable technologies through research and development. Furthermore, it highly recommends D&S organizations to enhance emissions reporting and accountability as well as to pursue net-zero emission goals.

Other Recommendations and Initiatives:

The consulting company KPMG suggests D&S organizations to align their climate goals and actions with international and national climate targets, whereas Nature advocates for mandatory emissions reporting and international agreements and methodologies to monitor and reduce military emissions. Additionally, D&S organizations such as the US DoD or the US Army have established their own guidelines for water efficiency and water security.

Sustainability Targets of Emergency Organizations:

These recommendations are not only true for military organizations, but are applicable to emergency organizations like Police, Ambulances or Firefighting organizations in a similar manner. Examples include organizations such as the London Fire Brigade, which has outlined a “Sustainable Development Strategy for 2023-2025” and consequently invested in measures like acquiring electric vehicles and making their fire stations more energy efficient. Other examples in this direction include the Berlin Police, that has implemented measures such as using hybrid and electric cars along with sustainable practices such as a focus on recycling and a reduction of paper use. In doing so the emergency organization aims to support the City of Berlin in reaching its climate reduction 2030 and climate neutrality 2045 goals.

Given the above-mentioned challenges and facts, I now want to draw the reader’s attention to the holistic SAP Sustainability Solutions, that allow D&S organizations to actively tackle and manage all common aspects of sustainability.

Video 1: ERP to ESG: How to develop your first ESG Strategy

SAP is proud to be one of the leading software suppliers for Enterprise Resource Planning and other software solutions for various leading companies and organizations around the world. However, what is less well-known across customers and industries is that SAP also offers powerful and holistic cross-industry sustainability software solutions. The leading technology research companies, Gartner and IDC, have recognized SAP’s sustainability solutions for their comprehensive capabilities. Gartner has rated SAP as a preferred vendor for carbon accounting and management software solutions, while IDC has praised the “breadth and depth” of SAP’s offerings. The SAP solutions are thereby not only highly capable of measuring, analyzing, and managing carbon emissions, but are also trusted by leading companies and organizations worldwide, such as IBM, PWC, Freudenberg, msg global, and SAP itself. SAP’s sustainability solutions feature real-time data analytics, seamless integration with existing ERP systems, and AI-driven insights to help businesses make informed decisions. For example, IBM has leveraged SAP’s solutions to significantly reduce its carbon footprint, while PWC has used them to enhance its sustainability reporting. SAP’s commitment to sustainability has also been recognized with several industry awards, and the company continues to innovate with new features and developments on the horizon.

In general, the SAP Sustainability Cloud software suite is built on the following four main software solutions:

1) Sustainability and ESG Reporting Software

Video 2: SAP Sustainability Control Tower – Holistic Steering and ESG Reporting

Figure 2: The SAP Sustainability Control Tower solution

SAP allows companies and organizations to connect their environmental, social, and governance (ESG) data and steer their organizations towards more sustainable and efficient operations, thereby also helping to achieve national and international climate goals. The SAP ESG software was designed in a holistic way and provides streamlined reporting as well as valuable insights for decision-makers and stakeholders. Furthermore, it allows for the full integration of the organization’s stakeholders, like suppliers, into the system. This also means that governments theoretically can implement the solution nation-wide or across different governmental areas for managing everything around sustainability with one central software platform. Apart from that, the software generally allows D&S organizations to measure, communicate, and achieve corporate sustainability goals to the broader public. Moreover, the sustainability software is integrable across various different systems, even across the respective organization or company. This allows bringing sustainability, safety, risk, compliance, asset, and people data together in one place for enabling comprehensive sustainability reporting and analysis.

2) SAP Climate Action Solutions

Video 3: Transactional Carbon Accounting with SAP

Figure 3: Measuring emissions with the SAP Sustainability Management solutions

The SAP Climate Action Solutions allow companies and organizations to decarbonize their entire value chain from end-to-end to become climate-neutral organizations. This is made possible by integrating actual business transactions with carbon accounting software, emissions and compliance management, carbon footprint calculations, e-mobility, and transportation logistics. The solution includes services like:

Real-time decision making with SAP Sustainability Footprint Management
SAP Sustainability Data Exchange
SAP Environment, Health and Safety Management
and many more services

3) Circular Economy Software

Video 4: Circular Design with SAP

Figure 4: The SAP Circular Economy solutions

The SAP Circular Economy solutions allow companies and organizations to integrate the concept of circularity into their organization. Circularity thereby allows them to reduce the use of resources and materials, such as plastic, as much as possible. In addition, the concept aims to eliminate waste and circulate materials. Our Circular Economy solutions thereby consider all these requirements and allow managing circularity holistically. This includes circularity in supply chains, production, and all other applicable organizational processes. Especially worth mentioning in this regard is the possibility to use blockchain technology for capturing the whole material provenance from raw materials to finished products. Other promising features of the circular economy solutions are, for instance, the ability to create circular logistic flows for transport containers, pallets, and other forms of packaging.

4) Social Responsibility Solutions

Video 5: Social Responsibility for Zero Inequality with SAP

Figure 5: The EcoVadis API Connector for SAP Ariba

The SAP Social Responsibility solutions allow companies and organizations to manage their impact on people and society centrally with one software package. This involves the ability to consider social and environmental requirements across the entire value and supply chains of your organization. Moreover, it encompasses the ability to proactively ensure health, safety, as well as labor rights within the entire organization, but also to establish workforce sustainability by creating equal treatment and opportunities like, for instance, guaranteeing equal pay for men and women. In addition, SAP within this thematic area offers D&S organizations a human rights due diligence software that allows them to enforce human rights across all supply chains.

Artificial Intelligence Functions and Features

SAP is planning to integrate Artificial Intelligence into all eligible software solutions. For instance, it has set a goal to embed its Generative AI-powered Joule Copilot into 80% of the most used tasks by the end of 2024. However, various super-helpful AI solutions are already available, including those for SAP Sustainability Management solutions, where our customers can benefit from:

– AI for Emission Factor Management

(Demo Video: SAP Sustainability Footprint Management Features)

Our customers can simplify emission factor management by using the SAP Business AI-powered automation function, which is directly integrated into the solution. This improves result accuracy and reduces manual labor.

– AI for ESG Report Generation

The SAP Sustainability Control Tower solution allows users to record, report, and act on their diverse sustainability data. SAP has recently enhanced this solution by integrating an AI feature for the automated creation of ESG reports. This streamlines the reporting process, saving valuable time and money.

The Security Architecture of the SAP Sustainability Management Solutions

The SAP Sustainability Management software suite is built on an end-to-end security architecture that meets the demands of even the most security-conscious companies and organizations around the world. This includes:

– Cloud-Based Security

The sustainability software solutions are built with a security-first cloud approach. The cloud solution is based on the SAP Business Technology Platform (BTP), which includes strict functionalities for access control and data encryption. Additionally, SAP continuously develops its products and distributes regular software updates and upgrades to its clients.

– Data Integration and Auditing

SAP Sustainability Management is directly integrated or integrable into core Enterprise Resource Planning processes, making all data directly traceable and auditable.

– AI-Enabled Automation

Artificial Intelligence technology plays an important role through the SAP Joule Copilot and various embedded AI functions within SAP applications. It is also crucial for the security of the SAP Sustainability Management solutions. AI is used for process automation, eliminating the risk of human error, and for continuous monitoring of data and processes. If the system detects any security threat, it will directly inform the system user, who can then investigate and resolve the issue.

– Flexible and Extensible Architecture

SAP Sustainability Control Tower, one of the core sustainability solutions, offers clients maximum flexibility by allowing them to integrate custom content and create customized solutions.

– Integration of Regulatory Standards for Compliance

The SAP Sustainability Management solutions allow the incorporation of all major regulatory frameworks and legal requirements into the system. Examples for this include for instance the EU Corporate Sustainability Reporting Directive (CSRD). Defense and Security organizations can also integrate their own sustainability guidelines, such as national and international standards or guidelines from defense organizations like NATO.

In conclusion, this blog entry has shown that sustainability is crucial for Defense and Security (D&S) organizations, not only for achieving organizational, national, or international climate goals but also for creating significant opportunities for organizational realignment towards a greener orientation. By adopting sustainable practices, D&S organizations can contribute to combating global warming while simultaneously saving significant costs on fuel consumption, heating systems, and weapon systems, without sacrificing their core defense capabilities. It is important to note the significant positive influence such transformations can have on public perception and the innovative strength of individual military organizations and the entire D&S industry. A good example is the automotive industry, which, like many other industries, has undergone significant transformation in recent years with the shift to electric drives, now offering more modern and technologically advanced products, that are also more environmentally friendly. António Guterres, the Secretary-General of the United Nations, aptly stated, “The climate emergency is a race we are losing, but it is a race we can win.” This call to action resonates deeply within the defense sector, urging all stakeholders to embrace sustainable practices and technologies. However, setting climate goals and creating corresponding guidelines is one thing, but achieving them another. That is why D&S organizations need to develop holistic sustainability concepts in partnership with key stakeholders, such as governments, suppliers, defense organizations, or supranational organizations like the European Union. They also need to measure, manage, and report their progress. This is where SAP’s cutting-edge SAP Sustainability Management solutions come into play. The software package covers all typical sustainability requirements for D&S organizations and includes various supplementary tools and features, such as ESG reporting, circular economy solutions, social responsibility, health and safety solutions, and innovative AI solutions. In conclusion, by establishing climate and sustainability action plans and utilizing powerful sustainability management solutions like SAP Sustainability Management, D&S organizations can set a powerful example, proving that security and sustainability can go hand in hand. Let’s embark on this journey together towards a greener, more sustainable future for everyone.

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