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IFS aims to help companies improve ESG goals

Customers at the IFS Unleashed conference showed interest in the IFS ESG module, which is intended to measure ESG data and introduce sustainability into decision-making.

IFS is providing capabilities that can help companies turn plans for improving environmental, social and governance goals into measurable actions.

The IFS ESG module, released in 2021 as a standard component of the IFS Cloud enterprise applications platform, is helping Schoeller Allibert become a more sustainably focused organization and meet its goals, said Marc Schmitz, CIO of the manufacturer in Goodyear, Ariz. The module is available at no extra cost to IFS Cloud customers.

At last week's IFS Unleashed conference, the vendor announced several new functions for tracking ESG goals that will be included in IFS Cloud 22R2. The ESG module will include the ability to track indirect greenhouse gas emissions to assess a company's overall carbon footprint to align with the Greenhouse Gas Protocol; the Planning and Scheduling Optimization module will include the ability to record vehicle usage and environmental costs in planning processes, allowing companies to compare the performance of different vehicles; and the Service Management module includes the capability to reduce waste by allowing service technicians to better manage the return of unused inventory and uninstalled components.

Meeting ESG goals can drive business

Schoeller Allibert makes reusable plastic packaging materials for a variety of uses such as beverage crates, airport security trays and plastic buckets for automated warehouses.

The idea that a company that uses plastics as a raw material can be environmentally sustainable is counterintuitive, but Schmitz argued the products Schoeller Allibert manufactures are more sustainable than the wooden products that the company made when it started 60 years ago.

"A wooden pallet is a lot cheaper, but it often lasts only one trip or five or 10, but our pallets last five to seven years and then we reuse the materials to make new pallets," he said.

Schoeller Allibert is also using plastics that have been recovered from the ocean as raw materials and is moving to power its plants with renewable energy, according to Schmitz.

"We use a lot of electricity in our production process, so we put solar panels on our factories. By next year, 100% of the electricity that we buy [will be] green energy -- solar or wind," he said.

In 2019, the company implemented IFS to consolidate its 12 factories under one ERP platform, and once the core modules for manufacturing, supply chain and finance were rolled out, Schmitz said they looked for other functionality and found the IFS ESG module.

We are being pushed on sustainability, as are all chemical companies. Our answer to that is to continue to find more environmentally friendly paints, but also to help our customers to become more environmentally friendly.
Trond AuneGlobal ERP manager, Jotun

"The IFS ESG module is mainly focused on the carbon footprint. For us, a carbon footprint includes, on one hand, the production factories, and, on the other hand, the products because these can help reduce the carbon footprint of our customers," he said. "That first part of how much energy you use, how much recycled material you use is where IFS can immediately start helping us, because we already have all the data on the production machines -- raw materials, recycled materials and energy consumption."

IFS customer Jotun, a global provider of paints in Sandefjord, Norway, has found that becoming more environmentally responsible has been good business.

Jotun produces paints that coat and protect ships, and the company has moved from using toxic chemicals in its raw materials to more environmentally friendly ingredients, said Trond Aune, global ERP manager of Jotun in an IFS Unleashed conference session.

This has helped Jotun's customers become more sustainable because the products and paints can help them reduce the CO2 emissions on seagoing vessels, Aune said.

"We are being pushed on sustainability, as are all chemical companies," he said. "Our answer to that is to continue to find more environmentally friendly paints, but also to help our customers become more environmentally friendly."

Moving from why to how

Meeting ESG goals has moved past a "why" conversation to a "how" conversation in many companies, said Stephen Keys, IFS chief talent and sustainability officer. Most ESG initiatives started in marketing departments as way to boost a company's reputation, but they are now coming from areas like auditing because of increasing regulatory constraints.

"The sustainability agenda has shifted towards a financial matrix and we're starting to see real benchmark data coming out now that makes it very clear what the impacts and the benefits are," Keys said. "So we're moving past why to how, what we need to do first, how we embark on the journey, what skills we need."

Technology to gather ESG data needs to be embedded across an organization's processes in order for companies to apply sustainability to their decision-making processes, he said.

Photo of Stephen Keys speaking at IFS Unleashed
Stephen Keys, IFS chief talent and sustainabilty officer, speaks at IFS Unleashed.

The IFS ESG module is one of the ways that companies can begin to embed sustainability goals, according to Caitlin Keam, IFS director of product management for ESG.

Because ESG can be complex and initiatives can be difficult to start, the idea behind the IFS ESG module is to help companies focus on specific goals like carbon reduction or improving diversity, Keam said in a conference session.

For example, the IFS ESG module includes a Carbon Dashboard that gathers and tracks carbon emissions data from a variety of sources and visualizes progress on key KPIs.

"Once you have this, it helps you make decisions to be more efficient," Keam said.

Customer interest in ESG module

Conference attendees expressed interest in the ESG module, even if plans for sustainability goals are just being formulated.

Others, like Adrian Zuniga, system administrator for Miller Castings, a manufacturer in Whittier, Calif., are further along. He said his company must comply with a variety of environmental state regulations.

"We're looking for information to bring back to our environmental department about what kind of data we can feed into [an] ESG module and how it generates reports," he said. "We use a ton of energy because we have a foundry and we create a lot of waste, so if we can collect that data automatically, we're looking for ways that this can help us do that."

Bart Gypen, head of business process management for a European manufacturer of machinery for can and bottle recycling, mining recycling and food production, also came to IFS Unleashed in part to investigate the IFS ESG module.

"I'm very new to ESG, but when the business found out I was coming here, I was asked to find out what IFS is doing with ESG," Gypen said. "Our ESG initiative is very new, we're just at the stage of taking home information, but it's now a must-have, it's not something that's extra anymore."

Jim O'Donnell is a TechTarget senior news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.

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