Sustainability Framework

A sustainability framework is a standard, guideline, or regulation that helps businesses and organizations achieve sustainable development goals.

Examples of sustainability frameworks include the EU Taxonomy Regulation or the Social Bond Principles defined by the International Capital Market Association (ICMA).

EU Taxonomy

The EU Taxonomy Regulation establishes an EU-wide classification system that is intended to provide businesses and investors with clear definitions to identify the degree of environmental sustainability of an economic activity.

According to the EU Taxonomy Regulation, an economic activity is environmentally sustainable if it fulfills the following criteria:
  • Substantially contributes to one or more environmental objectives.
  • Does not significantly harm any of the environmental objectives.
  • Is carried out in compliance with minimal safeguard criteria.
  • Is compliant with technical screening criteria.

SAP Financial Services Data Management helps you to represent data in the context of the EU Taxonomy Regulation.

Data Model

In the conceptual data model (CDM), you can use the Environmental Objective entity to store the following environmental objectives:

  • Climate Change Mitigation

  • Climate Change Adaptation

  • Sustainable Use and Protection of Water and Marine Resources

  • Transition to a Circular Economy

  • Pollution Prevention and Control

  • Protection and Restoration of Biodiversity and Ecosystems

This entity can be used to specify one or more environmental objectives of a connected financial contract or a financial position (defined as a financial instrument or security account).

The following environmental objectives are currently defined in the SAP Financial Services Data Management data model:

  • Climate change mitigation: Greenhouse gas (GHG) emissions reduction or removal as per the long-term temperature goal of the Paris agreement

  • Climate change adaptation: Risk reduction of the adverse impact of the current climate and the expected future climate

SAP Financial Services Data Management enables you to store taxonomy-aligned economic activities by using the Economic Activity entity.

You can store the following fulfillment types of an economic activity:

  • Own Performance: The economic activity substantially contributes to one of the six environmental objectives.

  • Transitional: The economic activity has no technologically and economically feasible low-carbon alternatives, but supports the transition to a climate-neutral economy.
  • Enabling: The economic activity enables other activities to contribute substantially to one or more of the environmental objectives.​

The following figure is an example of how an economic activity can be modeled in the CDM:

More Information

  • ESG Risk

  • Sustainability Bonds

  • For more information, see the related entities and their definitions in the data model represented in SAP PowerDesigner.