SAP launches multi-phased supplier program to cut scope 3 emissions

SAP announced a multi-phased supply-chain engagement program by 2024 targeting key suppliers to reduce scope 3 emissions, requiring top suppliers to report product-level emissions by 2027. The supplier-engagement model signals rising decarbonisation expectations for Indian vendors in multinational value chains.

SAP is implementing a multi-phased supply-chain engagement program by 2024 focused on key suppliers to reduce greenhouse gas emissions across its upstream value chain, addressing the majority of its scope 3 emissions from indirect activities such as procuring goods and services. Environmental considerations will be embedded in procurement through a new sustainability classification system and environmental impact criteria in procurement documentation. SAP's strategies span eliminating single-use plastics, cutting carbon emissions, and enforcing human rights in the supply chain.

The program affects SAP's suppliers, business partners, and social enterprises across its seven procurement categories. SAP plans to work with its top 100 suppliers to report and record product-level emissions, aiming for all top suppliers to report company-wide and product-level emissions for relevant key products by 2027. CFO and Executive Board member Dominik Asam said reducing scope 3 emissions is crucial to reaching net zero and that partner collaboration is vital to achieving emission-reduction goals effectively.

Suppliers should prepare to provide actual product-level emissions data rather than averages and engage with SAP's Sustainability Data Exchange for secure CO2 information sharing. The 2027 reporting expectation for top suppliers sets a clear timeline. Indian vendors supplying multinational technology buyers should build emissions-measurement capability, align with sustainability classification and procurement criteria, and monitor how supply-chain decarbonisation requirements shape future contract eligibility as SAP targets net zero by 2030.

Key figure — Reporting deadline: top suppliers to report product-level emissions by 2027