Elia Group builds a future-proof scope 3 carbon accounting platform on SAP BTP

In recent years, Elia Group has made great strides in decarbonizing their supply chain. To track their progress, they built their own scope 3 carbon accounting platform on the SAP Business Technology Platform (BTP). As a result, both the transparency and maturity level of their scope 3 upstream emissions have significantly increased.

Elia Group is a major utility player in the European market, supplying electricity to 30 million end users through its subsidiaries in Belgium (Elia) and Germany (50Hertz). "By building a reliable, sustainable, and affordable energy system, we aim to play a leading role in the energy transition," says Philipp von Normann, Product Owner of the Scope 3 Platform at Elia Group. "Today, we are buying lots of materials to prepare the power grid for the energy transition. As a result, the focus of our carbon accounting has started to shift from scope 2 to scope 3 (Purchased Goods and Services & Capital Goods), the indirect emissions that occur in our supply chain. To minimize scope 3 emissions, we’re increasingly giving more weight to the decarbonization efforts of our suppliers.”

No decarbonization without primary data

In terms of reporting its scope 3 emissions, Elia Group faces a significant challenge. “There’s a growing need for robust scope 3 emission data. But a lack of standardized lifecycle assessments, variations in emission factors, and the absence of established transfer practices make it very difficult to obtain qualitative, comparable data.”

“In the past, we calculated our carbon emissions based on spend figures and average, external emission factors. However, if we spend more, which has been the case in the past years, our carbon emissions increase, while in reality they should decrease because we work more often with sustainable suppliers.”

The process then

Before creating the new platform, Elia Group was already striving to enhance the efficiency of data collection and reporting, while facing the challenges of inaccurate scope 3 data:

Elia Group collected all carbon footprint-related information on spreadsheets and stored it on SharePoint.
Quality control was done manually and the information was only used to calculate a specific asset’s carbon footprint.
The complexity of procurement records (payments over several years, versioning, etc.), made it impossible to partially replace spend-based scope 3 accounting with input collected from suppliers.

Toward a scope 3 accounting platform

In 2022, Elia Group’s strategy and procurement department decided that they needed a solution to efficiently collect carbon footprint-related data from suppliers and report on it transparently and accurately. To ensure comparability between suppliers, the solution also had to include a lifecycle assessment (LCA) tool for various asset classes with a common methodology. “The idea of the scope 3 accounting platform is to obtain scope 3-related data directly from suppliers and layer this input correctly with spend data from our SAP S/4HANA ERP” Philipp explains. “Since no existing software suite could provide an all-in-one solution, we decided to build it ourselves."

"The idea of the scope 3 carbon accounting platform is to obtain scope 3-related data directly from suppliers and layer this input correctly with spend data from our SAP S/4HANA ERP."
Philipp von Normann - Product Owner Scope 3 Platform at Elia Group

Building a scope 3 carbon accounting platform on SAP BTP

“Though it is our ambition to become a digital transmission system operator in the long run, we don’t yet have all the expertise and resources in house to build such a complex tool,” Philipp continues. “That’s why we called on Flexso, among other digital suppliers. With the help of a team of SAP BTP full-stack developers, we set up a user-friendly scope 3 accounting platform from scratch on the SAP Business Technology Platform. The new application is connected to S/4HANA and integrates well with our other SAP solutions.”

“SAP BTP acts as a reliable and sustainable core to support our scope 3 accounting platform.”
Philipp von Normann - Product Owner Scope 3 Platform at Elia Group

The process now

With the introduction of the scope 3 accounting platform, the process is now fully digitized:

Suppliers log on to the platform via a secure connection and receive notifications of new input requests. They provide their data by completing a questionnaire on the platform.
Internal users (Elia Group buyers, technical experts, etc.) access the platform via SSO in SAP Workzone and perform a sanity check of the inputs to validate them.
The LCA tool automatically calculates the carbon footprint.
This information is then directly displayed in the robust scope 3 reporting tool – replacing less accurate calculation methods and incorporating data from different sources.
Suppliers have full access to their own data and performance records as a means of motivating them to keep their data up to date.
All data is stored in a central SAP HANA database, so Elia Group can further analyze it across multiple dimensions.

Continuous improvement and commercialization

For its 2023 annual report, Elia Group is using figures obtained with the new platform for the first time. “More and more users are becoming aware of the scope 3 impact of our activities, which facilitates adoption of the platform. Even colleagues initially less concerned with GHG reporting were quick to see the benefits of having a digital supply chain record that provides valuable insights beyond scope 3, such as revealing raw material composition, ESG risks, logistical bottlenecks, and much more.”

“We now have a future-proof solution that we can continuously improve in an agile way to meet the changing needs of both our internal and external customers,” Philipp concludes. “Together with Flexso, we are even exploring whether we can commercialize the platform as a product in the future, so that other companies can use it for the same purposes.”

“Together with Flexso, we’ve laid the foundation for an integrated reporting system based on supplier data that will continue to grow over the coming years.”
Philipp von Normann - Product Owner Scope 3 Platform at Elia Group