The Shift Towards Sustainability-Centric ERP

With organisations evolving to become more sustainability-focused, it is now more important than ever to implement sustainable practices across all areas of business, and technology is no exception. That is why Microsoft has just released its first wave of sustainability features in Dynamics 365 Business Central. 

The author of this page: Conor Flanagan
Conor Flanagan, ERP Team Lead Jun 05, 2024

Whether it be a result of consumer expectations or evolving industry regulations, sustainability is now becoming a core focus for businesses worldwide. Companies must learn to leverage technology to support them on their sustainability journey, or risk failing to comply with industry standards and falling behind the competition. Moreover, since January 2023 large companies and listed companies have been required by EU law to publish regular reports on the social and environmental impact of their operations under the Corporate Sustainability Reporting Directive (CSRD). To help organisations comply with industry best practices and regulations, Microsoft has just integrated some innovative sustainability reporting features in Dynamics 365 Business Central, as outlined below.

Chart of Sustainability Accounts 

The Chart of Sustainability Accounts is the structured list used to record all emissions data, helping organisations to organise data more effectively. It is a key tool that allows businesses to track, measure and manage their sustainability-related data and key metrics, such as energy consumption, waste generation and greenhouse gas emissions according to the three different emission scopes defined by the ESG standard. Scope 1 emissions include those generated by sources directly owned or controlled by the organisation, like from a fleet of company vehicles, as well as from fugitive emissions which are essentially inadvertent greenhouse gas emissions such as those emitted from refrigeration units or air-conditioning systems.  Scope 2 emissions include indirect emissions from the generation of energy purchased from utility providers. Scope 3 emissions include a wide range of indirect emissions that occur throughout the company’s operations. This includes emissions generated from purchased goods and services, fuel and energy related activities, waste, business travel, employee commuting, transportation and downstream leased assets.  Users can customise the chart to suit their specific requirements, adding account categories and sub-categories of emissions from different sources as needed. 

Chart of Sustainability Accounts (Source: Microsoft)

Sustainability Journals 

Sustainability Journals operate in a similar way to other journals in Business Central, except they are used to record sustainability-related metrics and activities within the business. Users can either manually enter information like emissions data, or use formulas already built into Business Central to calculate emissions based on data stored in Business Central. Users can create journals using existing templates with specific configurations to help manage data in the most effective way. Once a Sustainability Journal is posted, it becomes an entry on the Sustainability Ledger which organises all emissions data according to the Chart of Sustainability Accounts, providing a comprehensive view of critical data. 

These new features in Business Central are set to transform sustainability reporting processes, with customisable features that help businesses easily monitor and manage emissions and take active steps towards reducing emissions and striving for sustainable business

If you would like to learn more about Business Central, contact one of our experts today. 

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