Filed under: Best Practices in Germany | Tags: Carbon Impact Tool, SAP, Sustainability Challenges
The ICT Provider SAP wants to be a role model as well as assist its customers to manage their sustainability challenges. Among the solutions provided are the SAP Carbon Impact Tool, SAP Environment, Health and SafetySolution and the SAP Business Objects Sustainability Performance Tool.
SAP is an ICT provider of German origin founded in Walldorf in 1972. It employs worldwide 48.000 people in 50 countries. With its 25 industry specific software solutions and consultancy activities, it serves 75,000 customers in 120 countries, generating an annual turnover of 10,7 million euros (2009) (1).
SAP specialities are the so-called ‘Entreprise Resource Planning’ (ERP) solutions. ERP solutions enable companies to manage its information and business processes on a very detailed level. The solutions are based on centrally stored data accessable and adjustable through individual software interfaces. SAP Business Model is based on software licenses and consultancy fees.
SAP and Sustainability
Léo Apotheker, SAP CEO in 2009, introduced sustainability into SAP Strategy. He wanted to transform SAP into a corporate citizenship leading company and making a product-driven activity. Leo took a personal interest in sustainability. Thanks to this, Sustainability is “in-corporated” into SAP as “big roots are for big trees”.Very recently, in February 2010, a CEO duo Bill McDermott and Jim Hagemann Snabe have taken over the CEO position. They announce to continue SAPs strategy and accelerate innovation for the SAP customers.
In 2009 the first Chief Sustainability Officer has been appointed: Peter Graf, a seasoned manager at SAP (13 years). Graf, based in the USA, will endorse the Sustainability policy throughout the business lines in cooperation with the Sustainability Champions across the Business Lines worldwide. Peter Graf is in charge of transforming SAP into a leader company in sustainability and provide the most complete solution portfolio for customers.
Peter Graf, Chief Sustainability and Executive Vice President of Sustainable Solutions for SAP as of 2009.
SAP wants to become a role model as well as sustainable solution provider’
In an interview with Leaders Magazine (Leaders Magazine, USA / Internet – April 05, 2010), Peter Graf, Chief Sustainability Officer at SAP, said, “Sustainability is a strategic, long-term priority for SAP, driven from the highest level of our organization. Our strategy is a dual one: we aspire to become a role model as we improve our own sustainability while also being the leading provider of sustainability solutions to our customers.” Sustainability, Graf said, is a major transformation in business. “You can compare its intensity and longevity to that of globalization or the use of the Internet,” he said. On using metrics to track impact and progress, Graf cited SAP’s Web-based 2008 sustainability report that lets you see “nine different key performance indicators covering economic, environmental, and social aspects. For example, we track our carbon emissions, which we reduced by 15% in 2009 and saved around €90 million ($ 121 million) doing so. For the 2009 report, we will further increase the number of KPIs we publish. In 2010, we will close our carbon books every quarter and report those numbers publicly. We are keen on tracking our performance, so we can continue to optimize our sustainability.”
Monique Ventura-Delatour is working at SAP France, where she has held different positions within the SAP EMEA organisation as of 1996. Among the positions covered were those in Supply Chain expertise, Project implementation and Business Development by customer. As of 2008, she covers the position of Consulting Manager GRC (‘Governance Risk and Compliance’) and Sustainability Management in SAP.
Monique Ventura-Delatour, Presales Manager Sustainability EMEA at SAP
‘Sustainability has a long history within SAP’, explains Monique Ventura-Delatour. Health, Environment and Security in chemical industry have played a role in designing our solutions for 20 years. Recently, regulations in environment and human safety expanded to all businesses, becoming more severe. Environmental Product Compliance is a big concern these days. Many new regulations have appeared : RoHS (Reduction of Hazardous Substances) or WEEE (Waste Electrical and Electronic Equipment) or REACH (Registration, Evaluation and Authorisation of CHemicals), American NEP regulation, ELV. They are all forcing companies to look at their products, bills of materials and substances. They also require from suppliers new standards on toxic substances and e-waste practices.
If products don’t comply to the reglementation they can’t be marketed regardless whether it’s the manufacturers fault or the fault of one of its suppliers. This generates costs, increases risks. To avoid such economical consequences, companies do need to adopt new concepts reconsidering value chain, introducing eco-conception or cradle to cradle concept.
The current business climate has evolved into an environment where regulations on the local, regional, and global level are proliferating. Brand reputation, market share, and even market valuation depend on company achievement of sustainability objectives as reducing environmental footprint. Energy and natural resource efficiency is more important now than ever before.
To adapt to the changing legislative environment and new systems of customers, partners and suppliers, SAP is collaborating and co-innovating with our ecosystem of customers, partners and stakeholders to expand the reach and impact of business solutions for sustainability to companies worldwide.
1. What are SAP Corporate Responsibility Objectives ?
Focus on Four Sustainability Themes: SAP Board has decided to concentrate its efforts on four priorities : 1. Climate Change, 2. Digital Inclusion, 3. World Class People and 4. Accountability. In this chapter a short discussion on each of them, with a focus on the first priority Climate Change.
The Sustainability Priorities of SAP : Climate Change, Digital Inclusion, World Class People and Accountability.
1. Climate Change :
SAP has stated it as its business opportunity to lower its own green house gas emission and help to reduce the worlds overall emission levels. It wants to lower its own company carbon emission levels to the level of 2000 (half of the 2007 level) by 2020. In 2008 emissions were down 6,7% from the previous year.
Sustainability requires businesses to reconsider their practices and consider a whole new set of risks and opportunities concerning socio-economic, environmental, safety, and health issues. Whether starting a sustainability plan or adjusting a strategy that is already in place.
SAP has created a Sustainability Solutions Portfolio for its customers. The map is based on seven axes : sustainability performance, energy & carbon, product safety & stewardship, sustainable supply chain, environment, health and safety, sustainable workforce and IT Infrastructure. This roadmap is focused on preventing risks and evolving existing processes within the customer supply chain. The 3 pilars “Planet, Profit, People” are covered on an horizontal and vertical approach.
Examples are Environment, Health and Security Solutions and Carbon Management, driven by the Carbon Impact tool and PCM (recent SAP acquisitions). The products link Governance, Risk And Compliance with environmental concerns such as Health and Safety and Chemicals Reporting.
SAP Sustainability Portfolio (3)
2. Digital Inclusion : SAP wants to contribute to the economical development of small and midsize business in emerging markets, supporting innovation, transparency, economical development. For instance SAP is supporting a micro-financial organization (Planète Finance) adapting cell phones to support micro-credit mgt and administration.
3. World Class People : In order to attract and keep the best people, healthy and proud of SAP, SAP encourages at least 30% of its employees to do charity work, stimulate diversity.
4. Accountability : SAPs own software solutions are an important instrument for enterprises to track process, data, to be auditable and accountable. Products like SAP Business Objects help customers to create factual business reports, including carbon footprint, water and energy use. SAP actively supports the international coalition against corruption, Transparancy International.
2. How does CSR and Sustainability contribute to Innovation at SAP ?
Monique Ventura confirms that Sustainability is a strong driver for Innovation at SAP. This has all to do with the view of Sustainability being directly linked to the key business functions: Performance, Processes, Risks and Collaboration. Sustainability enables companies to increase revenue (create leadership, increase tangible and intangible assets) and minimize costs (anticipate regulations), mitigate risks (a holistic approach on process level). Innovation comes from the inside as well as the outside, a bottom up process and so does Sustainable Innovation.
SAP Solutions address customers issues : Performance, Processes, Collaboration and Risk Management.
SAP Customers requiring a holistic approach : Economical, Social and Environmental Performance
Thanks to its 20 years experience and huge eco system, SAP has an excellent understanding of the business elements that are key to its customers. Customer demands with respect to sustainability have increased. Many new requirements have come up in the last few years. SAP has invested highly in the development of new products and product extensions. Innovation is driven by new legislation, industry partnerships and customer demands :
1. First of all, new standards and legislation drive new product innovation. Take for instance the European Union REACH directive that has became operational in 2007. REACH obliges companies to report in a detailed way about safety, health and environmental production aspects, such as potential dangerous substances. Other laws of importance are the RoHS (restriction of Hazardous substances) or waste in electrical and electronic equipment (WEEE). The different laws have been key in the development of new tools like the Environment, Health and Safety Management Tool of SAP.
The REACH directive of European Union, operational as of 2007, obliges Chemical Industry to carefully report about safety, health and environmental aspects of its production processes, SAP Environment, Health and Safety Management Solution is helping customers to manage REACH obligations.
2. Secondly, the industry partnerships are of most imporantance to SAP. The cooperation with oil and gas industry very concerned by Kyotos regulation has lead to the co-development of new solutions dedicated to Environment Health and Safety. EC (Environment Compliance) has been developed to answer to Kyoto’s regulations and been extended to others as American, Australian regulations. Chemical, discrete and High tech industries have been very concerned by regulations as REACH, ROHS…Product for Compliance has been developed to answer to this. Such Industry solutions have been then extended to all industries …SAP have deep relationships with EEC. IUCLID5 interface which is the mean to companies to exchange data with ECC has been written by Technidata, newly acquired by SAP after 20 years partnership.
3. The SAP Carbon Tool is an example of the SAP response of a new customer needs, now more and more enterprises need to calculate their green house gas emissions. This web based tool uses existing business process information and calculations are based on international Green House Gas Protocol conventions, focussing on 3 scopes : Direct On-site Emissions, Indirect Emissions from Purchased Energy & Utilities and Indirect Emissions from Services and Supply Chain.
SAP Carbon Impact Tool assists the Carbon Footprint Project Lead with a detailed break down of the project, delegated information collection and detailed overviews of emissions per Business Unit.
4. Customers not only want to calculate their carbon footprint but a full CSR Dashboard : They would like to have a better and general view on all major environmental parameters ‘How to communicate our sustainability performance to many stakeholders ? ” (Quotes of Philips and Nestlé 2009). The SAP Business Objects Performance Management tool has been developed to provide an answer to this. The tool is certified by the Global Reporting Initiative Guidelines and built in close cooperation with customers such as Nesté. The rrogram enables customers to closely monitor and manage its water, materials and waste use.
SAP Business Objects Sustainability Performance Management tool, presenting details overviews of performance of energy, carbon footprint, materials usage and waste management.
5. SAP is actively engaging with customers and continues to track their needs and co create new solutions. SAP is using customer councils in all industry sectors as a source for further development of industry specific solutions. This includes Sustainable Solutions. Questions on Social and Environmental Risks and Challenges are continued to be explored to optimise the SAP products, like ‘How to centralize incident info from all entities?’ (Areva, 2010)..
3. How does the economical crisis effect the Sustainability Objectives ? What are outlooks ?
The Sustainability Objectives of SAP are key to overcome the current economic challenges and to maintain the position of SAP in the future. Consequently the Sustainability objectives of SAP are not changed but accelerated. Jim Snabe and Bill Mc Dermott have underlined the strategy to focus on developing new solutions and address new requirements as On-Demand.
For the short term, SAP wants to help its customers to overcome the economical crisis with its software solutions offering a clear views on existing processes.
In the middle-term, SAP expects to be able to accelerate the customers Sustainable Objectives based on a further development of its Sustainable Tools. An interactive collaboration with its suppliers, clients and partners will be therefore even more important. SAP will need to develop its understanding about Sustainable Development, a holistic view of the roles that enterprises play in the new context of cooperating companies and individuals, in different roles: as a supplier, customer and partner.
The definitions of sustainable behaviour on a societal level and enterprise level need to become more clear. Entreprises need to develop a good understanding of contribution they make to the Sustainable Development of the society and local context (Source Institute for Okologischen Wirtschaft Forschung). And define their own role.
Key to a successful sustainable business will be to maintain the relationships within between enterprises and organizations like municipalities and NGOs. As well, new business model development within the company and with its stakeholders will be essentiel. SAP in-corporates this all as a matter of fact.
Sources: 1. www.sap.com; 2.www.sapsustainabilityreport.com; 3. http://www.sap.com/solutions/executiveview/sustainability/sustainability-map/index.epx., vers un pilotage solidaire des risques et de la conformitéIt-expert
Leave a Comment so far
Leave a comment