Many organizations already report carbon emissions, but planning future emission reductions is still new territory. Regulations, public commitments, and internal targets are pushing companies to look ahead. As a SAC Planning Consultant at Swap Support, Alejandro Loke shares how to translate emissions data into realistic future scenarios and decision-making.
The main driver is regulation. European requirements increasingly require companies not only to report current emissions, but also to define future emissions and explain which reduction measures they plan to take. Under the European Sustainability Reporting Standards (ESRS) E1, companies must disclose greenhouse gas (GHG) emission reduction targets (Disclosure Requirement (DR) E1-6), a transition plan for climate change mitigation (DR E1-1), and the actions and resources allocated to achieve those targets, including expected GHG emission reductions. That changes the discussion completely, because reporting actuals is no longer enough.
For organizations that publicly commit to reduction targets, for example, through the Science Based Targets initiative (SBTi), this becomes even more important. Once targets are public, companies need to understand if they are still on track and if current measures are sufficient. Planning makes it possible to test if the commitment remains realistic under different business conditions.
The biggest shift is that planning introduces future scenarios. Reporting looks at what already happened, while planning starts with the question: what could happen next under different assumptions?
For carbon emission reduction planning, organizations tend to compare different pathways over a longer horizon, often 2050 with milestone years like 2030 or 2040.
SAP Analytics Cloud offers strong planning capabilities that support the technical side of decarbonization planning, such as scenario modelling, role-based access, and business process flows including audit trails. However, what makes the difference early on is not only software functionality, but the ability to shape a planning approach that matches the organization, its data maturity, and the decisions it needs to support.
In practice, the value depends less on the tool itself and more on building the right project team from the start. Decarbonization planning affects strategy, data, governance, and decision making across multiple departments. That requires people who understand how these elements connect, from internal stakeholders to experts in implementation, development, and support.
For many organizations, the starting point is already there because SAP Analytics Cloud is already used for financial planning. In many cases, the same environment also supports workforce planning, supply chain planning, or HR planning, so extending it to carbon emission planning is a logical next step.
Keeping everything in one platform matters because financial and ESG decisions are closely linked. Emission reduction programs often affect investments, offsets, and long-term budgets. If both sit in one platform, it becomes much easier to understand the financial impact of climate-related decisions.
The first scenarios often focus on decisions that already exist internally but are difficult to quantify. For example, remote working policies, stricter travel rules, or a shift towards electric vehicles.
A what-if analysis makes it possible to test those ideas before they become part of official planning. Teams can first explore privately how certain choices affect future emissions and only then decide whether they should move forward. Also, the what-if analysis helps organizations understand whether current targets remain realistic or whether stronger interventions may be needed.
One of the many challenges is data quality. Data for Scope 1 and 2 emissions, such as energy consumption, is usually mature because it already affects cost and financial reporting. But many Scope 3 categories, like commuting, travel behavior, or supplier-related data, often have much lower maturity.
Scope 3 adds another layer of complexity because the most important categories differ by sector. For manufacturing companies, pScope 3 Category 1: Use of Sold Products emissions often dominate. For many professional service firms, Scope 3 Category 1, Purchased Goods and Services, represents the largest share of emissions. This category often receives too little attention, while sources such as cloud services, hardware, software licenses, and subcontractors, can have a far greater impact than business travel. Since remote work became standard after COVID, cloud usage has grown rapidly, making that gap even larger.
The main success factors are clear ownership, alignment across departments, and the ability to keep the model connected to real business decisions.
Carbon emission reduction planning raises structural questions about assumptions, priorities, ownership, and decision making. That requires both internal commitment and implementation expertise that understands how ESG, finance, and technology interact in practice. Together, this helps organizations work through those questions and move beyond technical setup toward real planning maturity.
Long term value comes from a planning approach that helps companies stay focused, make the right trade offs, and turn ambition into a planning approach that remains usable over time.