SAP's Sustainability Mission: Business Technology for Positive Change

772px-sap_ag_headquarter_1200The global IT giant, which is helping thousands of companies execute sustainability strategies, has released its third quarter sustainability report card. Outside of one niggling area, they are at the top of the class

When the French food giant Danone—a €19 billion global leader in water and fresh dairy products (known in the United States for the yogurt marketed under its Dannon brand)—decided to cut emissions 30 percent across its operations and supply chain, it turned to another corporate giant: SAP (NYSE: SAP), the world’s third largest independent software manufacturer by market capitalization, headquartered in Walldorf, Germany. "We all know that 'when you can't measure it, you can't manage it,'" said Myriam Cohen-Welgryn, vice president of Danone Nature, explaining that "at the beginning, getting the first results on reducing our CO2 footprint was not that difficult to achieve as it was also a driver for productivity…but as we progressed, CO2 reduction became more challenging and detailed measurement a key issue." "Calculating the carbon footprint for one single Danone product can be very complex," she said. "We have to cover multiple categories and full product life-cycles. Thus, managing large volumes of data took a lot of time and we could only do it on an annual basis."

CATALYST FOR CHANGE: MEASURING CARBON FOOTPRINTS

Together, the two firms developed a unique carbon footprint measurement model that is able to collect around 80 percent of the life-cycle data it needs automatically. The new system, which covers some 70 percent of Danone's revenue and over 35,000 of its products, will be deployed across 40 business units by the end of the year. "This solution makes carbon footprint issues everyone's business," said Cohen-Welgryn. "By making this analysis part of our IT infrastructure, we gain valuable insights for decision-making; it becomes a catalyst for change in the company as a whole."

SUSTAINABILITY UPDATE: THIRD QUARTER LOOKS STRONG

Danone is one of more than 183,000 companies around the world, many of which use SAP's technology solutions to analyze the relationship between business operations and climate change to better manage opportunities and risk. SAP's clients should be pretty pleased with the company's third quarter sustainability update, which shows significant progress across several fronts. SAP is listed in the Dow Jones Sustainability Index, which in September ranked it the software sector leader for the sixth consecutive year, as the firm increased its scores in all three areas of sustainability: economic, environmental and social. Their environmental policy and management system, for example, rose from 60 to 80 percent, while corporate citizenship and philanthropy grew from 52 to 86 percent. And because of its major purchase of electricity generated from renewable sources, the U.S. Environmental Protection Agency (EPA) included SAP America as one of the "Top 20 Tech and Telecom" green power users, recently moving up to 11th place from from 17th, surpassing such large green-focused firms as Apple, Samsung, Xerox and Motorola. The improved ranking demonstrates the positive effect of SAP’s participation in the EPA's Green Power Partnership program.

ROOM FOR IMPROVEMENT: GREENHOUSE GAS EMISSIONS

While continuing to help companies navigate sustainability strategies, SAP has one area that needs more internal focus: The company risks missing its annual carbon target of 480 kilotons due to business travel. While SAP's third quarter greenhouse gas emissions remained steady at 130 kilotons of carbon dioxide from the second quarter of 2012, it represents a seven percent increase from the third quarter of 2011 and newly includes emissions from SuccessFactors, an SAP company. The carbon footprint of SAP’s total electricity consumption was reduced by 13 percent compared to the third quarter 2011, through the additional purchase of renewable energy in the U.S. and Canada. "Our absolute emissions continue to present a challenge, in spite of the fact that our carbon efficiency continues to improve," said Peter Graf, SAP's chief sustainability officer. "More innovation is required to reduce our emissions in the future."

SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY: OPPORTUNITIES, NOT LIABILITIES

But while carbon efficiency is central to overall sustainability goals, it is one aspect of a holistic long-term strategy for corporate social responsibility. And the leaders in this overarching realm are the companies that view doing the right thing as an opportunity, not a liability. "At SAP, we believe that the movement towards more sustainable business strategies presents a great opportunity for us to innovate solutions for customers, our internal operations and how we invest into society," said Graf. "For example, during the 3rd quarter SAP rolled out a new, mobile incident management solution that can transform a company’s safety culture by allowing everyone to report potentially hazardous situations into one central system across an operation." "Regarding our internal operations, we continued to increase the ratio of woman in leadership, which is an important aspect of our push to even more diversity at SAP," he added, noting that "diversity and inclusion are essential to enhance our ability to innovate even further." Graf also pointed out SAP's commitment to fostering sustainable entrepreneurship in emerging economies, citing the company's new "social sabbatical" program that pairs a team of high-performing SAP employees with a small business to collaborate in finding solutions to critical community- and region-based problems. Not only does this innovative program support emerging economy entrepreneurship, but also develops SAP's own internal talent. Whether or not a company decides to enlist SAP for its sustainability solutions, this program is a simple yet brilliant idea worth copying.

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NOTES

Business Green. SAP carbon software gives Danone food for thought. March 30, 2012. Accessed November 8, 2012.

SAP. SAP at a glance: business overview. July 10, 2012. Accessed November 8, 2012.

Ibid., 1.

Ibid.

Ibid.

SAP. SAP Annual Report 2011. March 23, 2012. Accessed November 8, 2012.

SAP. Dow Jones Names SAP Most Sustainable Software Company. September 24, 2012. Accessed November 13, 2012.

Environmental Protection Agency. Top 20 Tech & Telecom. October 4, 2012. Accessed November 13, 2012.

Environmental Protection Agency. Green Power Partnership. Accessed November 13, 2012.

Peter Graf quotes provided by SAP on November 11, 2012.

Ibid.

Ibid.

image: SAP AG Headquarters, Walldorf, Germany (credit: amadeusm, Wikimedia Commons)

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