Streamlining Sustainability Reporting: Integrating SAP Green Ledger with SAP Group Reporting

The increasing importance of sustainability reporting is a major trend in the business world, and regulations like IFRS S2 (International Financial Reporting Standard S2) on climate-related disclosures are a key driving force.

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Navigating the complex and evolving regulatory landscape and identifying the right tools and processes can be a challenging task for organizations, highlighting the need for clear guidance and effective solutions.

This blog aims to show how to leverage the power of SAP Green Ledger and SAP Group Reporting for comprehensive sustainability reporting. This includes connecting the Data Mapping apps to SAP Green Ledger, mapping SAP Green Ledger data to the SAP S/4HANA Group Reporting table ACDOCU and importing greenhouse gas emissions data to streamline compliance with regulations like IFRS S2.

SAP Green Ledger is an innovative solution designed to bring the rigor and precision of financial accounting to environmental data. It allows companies to capture granular environmental data at a transactional level, providing a comprehensive and auditable view of their environmental impact.

SAP Group Reporting is SAP’s strategic solution for consolidated financial reporting. It is designed to help organizations efficiently and accurately consolidate financial and environmental data from multiple entities into a single, unified view. This is essential for meeting legal and regulatory requirements, as well as for providing management with a comprehensive overview of the group’s financial and environmental performance.

SAP Group Reporting Data Collection provides a suite of apps within SAP Group Reporting designed to streamline the process of gathering and preparing data for consolidated reporting. Among these, the Data Mapping apps bridge the gap between diverse data sources, such as SAP Green Ledger, and the standardized structure required by SAP Group Reporting.

To connect the Data Mapping apps to SAP Green Ledger as a data source, an OData version 4 destination is created in the SAP BTP Cockpit, the central web-based administration interface for the SAP Business Technology Platform (BTP). This destination then serves as the source instance in a Data Mapping definition, enabling data extraction, transformation, and loading (ETL) from SAP Green Ledger into SAP Group Reporting.

IFRS S2 and Other Regulations: Navigating the Evolving Landscape of Sustainability Reporting

Investors are increasingly incorporating environmental, social, and governance (ESG) factors into their investment decisions. They want to understand how companies are managing sustainability risks and opportunities, as these can significantly impact long-term financial performance.

Regulators around the world are introducing mandatory sustainability reporting requirements. IFRS S2 is a prime example, setting a global baseline for climate-related disclosures, but other regulations are also pushing companies to provide more detailed sustainability information. Important international frameworks include the Global Reporting Initiative (GRI) which provides a comprehensive framework for broader sustainability reporting beyond just climate and the Sustainability Accounting Standards Board (SASB) which offers industry-specific standards focused on financially material sustainability information.

In addition to these international standards, regional and national regulations are also emerging, such as the EU’s Corporate Sustainability Reporting Directive (CSRD), which mandates more detailed sustainability information for many companies operating within the EU. This complex landscape requires companies to be adaptable and informed about the various requirements they may face.

Sustainability issues, such as climate change, can pose significant risks to businesses. By reporting on these risks, companies can better manage them and mitigate their potential impact. Sustainability can also create new opportunities for businesses, such as developing innovative green products and services. Reporting on these opportunities can help companies attract investment and drive growth.

Meeting the requirements of IFRS S2 and other regulations demands accurate, reliable, and auditable data. Estimates and fragmented data sources are no longer sufficient. Companies need robust systems and processes to collect, manage, and report on their environmental performance with the same rigor as financial data.

By prioritizing data quality and implementing appropriate systems, organizations can confidently meet regulatory requirements, enhance stakeholder trust, and gain valuable insights into their sustainability performance. This is where SAP Green Ledger becomes invaluable, providing the necessary foundation for accurate and auditable environmental data.

SAP Green Ledger: a Solution for Capturing Granular Environmental Data

SAP Green Ledger empowers companies to move beyond basic sustainability reporting and gain a deeper understanding of their environmental footprint. This granular data can then be used to drive more sustainable business practices, improve resource efficiency, and meet stakeholder expectations for transparency and accountability.

Here are some key aspects of SAP Green Ledger:

• Granular Data Capture: Unlike traditional methods that rely on estimates and averages, SAP Green Ledger enables companies to track environmental data at a very detailed level, linking it directly to business transactions. This means you can see the environmental impact of specific products, processes, and activities.
  
• Integration with Financial Data: SAP Green Ledger seamlessly integrates with existing SAP financial systems, creating a unified view of financial and environmental data. This allows for dual-axis decision-making, where companies can consider both financial and environmental implications when making business choices.
  
• Focus on Auditability and Compliance: By applying the principles of double-entry bookkeeping to environmental data, SAP Green Ledger ensures the accuracy and auditability of the information. This is crucial for meeting increasing regulatory requirements and providing reliable data for external reporting.
  
• Key Capabilities:
  
  • Tracking greenhouse gas emissions across the value chain.
    
  • Monitoring energy consumption and waste generation.
    
  • Analyzing the environmental impact of products and services.
    
  • Supporting compliance with various environmental regulations and standards.

SAP Group Reporting: a Solution for Consolidated Reporting

SAP Group Reporting provides a robust and comprehensive solution for consolidated financial and environmental reporting. Its tight integration with SAP S/4HANA, real-time capabilities, and comprehensive functionality make it a powerful tool for organizations looking to streamline their consolidation process and gain valuable insights into their financial and environmental performance.

Here are some key aspects of SAP Group Reporting:

• Integration with SAP S/4HANA: SAP Group Reporting is natively built on the SAP S/4HANA platform, which means it leverages the same data model and infrastructure. This tight integration ensures data consistency and eliminates the need for complex data transfers between systems.
  
• Real-time Consolidation: The solution enables real-time consolidation, providing up-to-date insights into the group’s financial position. This allows for faster decision-making and improved responsiveness to changing business conditions.
  
• Comprehensive Functionality: SAP Group Reporting offers a wide range of functionalities to support the entire consolidation process, including:
  
  • Data collection and validation
    
  • Intercompany eliminations
    
  • Currency translation
    
  • Consolidation adjustments
    
  • Financial and environmental reporting and analysis
    
• Flexibility and Scalability: The solution is designed to be flexible and scalable, accommodating the needs of organizations of all sizes and complexities. It supports various consolidation methods and reporting standards, allowing companies to adapt to their specific requirements.
  
• Integration with SAP Analytics Cloud: SAP Group Reporting integrates seamlessly with SAP Analytics Cloud, providing advanced analytics and visualization capabilities. This allows users to create interactive dashboards and reports to gain deeper insights into the consolidated financial and environmental data.

SAP Group Reporting Data Collection Data Mapping Apps: a Solution to Bridging the Gap Between Diverse Data Sources and the Standardized Structure Required by SAP Group Reporting

The Data Mapping apps within SAP Group Reporting Data Collection simplify the often-complex task of integrating data from disparate sources, ensuring that the necessary information is accurately and efficiently transferred into the SAP S/4HANA Group Reporting table ACDOCU for consolidation.

Here are some key aspects of the SAP Group Reporting Data Collection Data Mapping apps:

• Connecting External Data: These apps enable you to connect to various external systems and import data necessary for group reporting. This is particularly important when dealing with subsidiaries or entities that use different ERP systems or data formats.
  
• Data Transformation: A key function is the ability to transform data from its original format into a structure compatible with the ACDOCU table. This involves mapping source dimensions from external systems to the corresponding target dimensions in SAP Group Reporting.
  
• Mapping Definition: The mapping process is typically defined using Microsoft Excel files, which are then uploaded into the Data Mapping apps. This allows for a user-friendly way to establish the necessary data transformations.
  
• Automated Data Load: Once the mapping is defined, the apps facilitate the automated loading of data into the ACDOCU table, ensuring a controlled, efficient, and scalable data acquisition process.
  
• Key Benefits:
  
  • Automating the data load process, reducing manual effort and potential errors.
    
  • Handling data from various sources and formats.
    
  • Providing a structured and auditable way to manage data mapping.
    
  • Streamlining the data preparation phase for consolidated reporting.

Connecting SAP Green Ledger to SAP Group Reporting

SAP Green Ledger integrates environmental data into core business processes, primarily within SAP S/4HANA. Connecting to this data involves exposing data from those systems via OData (Open Data Protocol).

OData is an open standard for creating and consuming data APIs (Application Programming Interfaces). It simplifies the way applications interact with data by providing a uniform way to request and manipulate data over the web. OData is like a common language for data exchange.

OData is widely used in SAP systems and is a key technology for data integration within the SAP ecosystem and beyond. It is especially relevant in scenarios like this one, where you need to connect data from an SAP system (containing SAP Green Ledger data) to other applications or services in the SAP Business Technology Platform (BTP).

SAP Group Reporting Data Collection supports OData versions 2 and 4, with the SAP Green Ledger scenario using version 4.

SAP Business Technology Platform (BTP) is SAP’s unified, enterprise-grade platform for innovation and integration in the cloud. It is designed to help businesses become intelligent, sustainable enterprises by providing a comprehensive set of services and tools for developing, extending, and integrating business applications.

To make SAP Green Ledger data available for use in other applications and services within BTP, we leverage OData services. Here is a general outline of the process:

1. Exposing SAP Green Ledger Data as an OData Service in the Source System:

This configuration step takes place directly in your SAP Green Ledger system where the data resides.

• Identify Relevant Data: Determine the specific SAP Green Ledger data you want to access via OData (e.g., emissions data, energy consumption, waste generation).
  
• Create Credentials: Generate a service key (consisting of an ID and a secret) in SAP Green Ledger. This service key will be used to authenticate the connection from SAP BTP Cockpit (described in the next step).

2. Creating a Destination in SAP BTP Cockpit:

Once the OData service is exposed in the source system, you need to create a destination in BTP to establish the connection.

• Access the SAP BTP Cockpit: Log in to your SAP BTP Cockpit and go to your subaccount.
  
• Navigate to Destinations: Go to the Connectivity > Destinations section.
  
• Create a New Destination: Provide the following information:
  
  • Name: A descriptive name for the destination (e.g., GHG).
    
  • Type: Select HTTP.
    
  • URL: Enter the URL of the OData service endpoint from your SAP Green Ledger system.
    
  • Proxy Type: Select Internet.
    
  • Authentication: Choose authentication method OAuth2ClientCredentials and provide the necessary credentials.
    
  • Additional Properties: Enter oDataEntitySet = JournalEntryEmissions and oDataServiceName = api/grl-postings-srv/v1/api/JournalEntryExtractionService. The OData Entity Set contains the data; the OData Service Name must be a fully qualified name, comprising both a namespace and a service name.

3. Using the SAP Green Ledger Destination in Data Mapping apps:

With the destination configured, you can now use it in various BTP services, like the Data Mapping apps to extract, transform (Define Data Mapping app) and load (Run Data Mapping app) the SAP Green Ledger data into the SAP S/4HANA Group Reporting table ACDOCU.

Define Data Mapping app: Mapping Greenhouse Gas Emissions from SAP Green Ledger with the ACDOCU Table

In your Data Mapping definition, when defining the source system, select the source type OData Custom Connection, select the SAP Green Ledger destination you created in the SAP BTP Cockpit, e.g. “GHG”, as a source instance. The Data Mapping apps will use the destination’s configuration to connect to the OData service and retrieve the SAP Green Ledger data.

After selecting a source type and instance, you are connected to the data source, e.g. SAP Green Ledger. You can then apply source filters to narrow down the data range for extraction, such as greenhouse gas categories in tons for a given company, fiscal year and fiscal period.

The final mandatory step in creating a valid Data Mapping definition is the upload of a mapping file. This file, in Microsoft Excel format (.xlsx), specifies the mapping rules governing the transformation of input (in this case SAP Green Ledger) dimensions to output (SAP S/4HANA Group Reporting table ACDOCU) dimensions.

For your convenience, a pre-built template mapping file is available in SAP Note 3524284. This template streamlines the process of importing greenhouse gas emission data from SAP Green Ledger into the SAP S/4HANA Group Reporting table ACDOCU using SAP GRDC Data Mapping apps. While you can create your own mapping files from scratch, the template can save you time and ensure a smooth import process.

The Metadata tab lists the available input (I) and output (O) fields for the data mapping. The input fields originate from SAP Green Ledger and are accessed via the OData API. The output fields correspond to the fields in the SAP S/4HANA Group Reporting table ACDOCU.

The other tabs are used to define how these input and output fields are mapped to each other.

Within the mapping file, you can transform the extracted data using filters, functions, and formulas (using a syntax similar to Java).

Mapping is essential when the input dimension values, e.g. SAP Green Ledger accounts, do not match the output dimension values, e.g. SAP S/4HANA Group Reporting financial statement items.

If the values are the same, you can map them directly without any transformation.

After uploading your mapping file into the Data Mapping definition, the system validates it for errors. Only valid mapping definitions can be selected in and run as Data Mapping jobs.

Run Data Mapping app: Importing Greenhouse Gas Emissions and Other Data into ACDOCU

Now that you have defined the data mapping, which governs the extraction and transformation of data, you can create a Data Mapping job to generate the mapped data and import it into the SAP S/4HANA Group Reporting table ACDOCU. This process involves several key steps:

1. Creating and Running the Data Mapping Job:

• Create the job: Within the Run Data Mapping app, create a new job based on the mapping definition you previously created, e.g. “Green Ledger GHG to ACDOCU”.

• Run the Job: Once created, run the job. This initiates the data extraction, transformation, and loading process.

2. The Data Mapping Process in Action:

When the job runs, the following actions occur:

• Connection to SAP Green Ledger: The system connects to the SAP Green Ledger source instance using the configured OData destination in BTP, e.g. “GHG”.
  
• Applying Source Filters: Any source filters defined in the mapping definition are applied to narrow down the data extracted from SAP Green Ledger (e.g. company, specific greenhouse gas categories, fiscal year, and period).
  
• Applying Mapping Rules: The mapping rules defined in the uploaded mapping file are applied to transform the extracted data. This includes mapping source dimensions from SAP Green Ledger to the corresponding target dimensions in the ACDOCU table.
  
• Data Generation and Aggregation: Detailed data is generated based on the mapping rules. This detailed data is then aggregated to the level required by the ACDOCU table for consolidated reporting.
  
• Data Upload to S/4HANA: The aggregated, mapped data is then uploaded to the ACDOCU table in the S/4HANA backend.

3. Monitoring and Logging:

The Data Mapping job run generates two essential logs:

• Mapping Log: This log provides details about issues with the mapping process itself, including rejected rows and any warnings and errors that occurred.
  
• Import Log: This log records the data import process into the ACDOCU table, including the number of records written and any warnings and errors encountered during the upload.

4. Optional Traceability Log:

For more detailed analysis and troubleshooting, you can optionally generate a traceability log. This log provides a comprehensive view of the data flow, including:

• The original input data from SAP Green Ledger (blue).
  
• The applied mapping rules (green).
  
• The detailed generated data before aggregation (orange).
  
• Any warnings or errors encountered during the process (Mapping Message and Import Message columns).

5. Verifying the Data in the ACDOCU Table:

After the job completes successfully, you can verify that the data has been correctly written into the ACDOCU table in SAP S/4HANA. You can use standard SAP S/4HANA reporting tools or queries to view the imported data.

Example:

After running the “Green Ledger GHG to ACDOCU” Data Mapping job, you can review the import log to ensure all greenhouse gas emission data for the specified company, fiscal year, and period has been successfully loaded into the ACDOCU table. You can then verify the data using transaction SE16H to directly view the table entries.

Unlocking Value from ACDOCU Data

Once the SAP Green Ledger data, such as greenhouse gas emissions, has been successfully written into the ACDOCU table, you can unlock a range of powerful capabilities within SAP Group Reporting and beyond. Here are some key actions you can take:

1. Consolidated Reporting and Analysis:

• Integrate with Financial Data: The environmental data in the ACDOCU table is now integrated with financial data, providing a holistic view of your organization’s performance. This enables combined reporting and analysis of financial and non-financial information.
  
• Generate Consolidated Reports: You can use SAP Group Reporting’s powerful reporting tools to generate consolidated sustainability reports that meet various regulatory requirements, such as IFRS S2. These reports can provide insights into your group’s overall environmental impact.
  
• Perform In-Depth Analysis: The data in the ACDOCU table can be further analyzed using SAP Analytics Cloud (SAC) or other analytical tools. This allows you to identify trends, patterns, and areas for improvement in your sustainability performance.

2. Enhanced Compliance and Transparency:

• Meet Regulatory Requirements: By having accurate and auditable environmental data in the ACDOCU table, you can confidently meet the reporting requirements of IFRS S2, CSRD, and other relevant regulations.
  
• Improve Stakeholder Communication: Consolidated sustainability reports based on the data in the ACDOCU table can be used to communicate your organization’s environmental performance to investors, customers, employees, and other stakeholders, fostering trust and transparency.

3. Strategic Decision-Making:

• Identify Risks and Opportunities: By analyzing the integrated data, you can identify potential environmental risks and opportunities. This information can be used to inform strategic decision-making and drive sustainable business practices.
  
• Track Progress and Measure Impact: You can track your progress towards sustainability targets and measure the impact of your sustainability initiatives. This allows you to demonstrate the effectiveness of your efforts and make data-driven adjustments to your strategies.

The Bottom Line

By successfully importing SAP Green Ledger data into the ACDOCU table using SAP Group Reporting Data Collection Data Mapping apps, organizations gain a solid foundation for comprehensive and compliant sustainability reporting. This integration empowers them to analyze their environmental impact alongside financial performance, meet regulatory requirements like IFRS S2, communicate transparently with stakeholders, and make informed decisions to drive a more sustainable future. This seamless data flow not only simplifies reporting but also unlocks valuable insights for strategic sustainability management.