Making 'sustainability profitable and profitability sustainable': SAP execs on the four dimensions of sustainable transformation

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SAP: 'Making sustainability profitable and profitability sustainable'

SAP: 'Making sustainability profitable and profitability sustainable'

SAP's sustainability executives on the company's approach to helping customers reach their goals

The need to reconcile the activities of the humans currently occupying our planet with our longer- term survival has become increasingly pressing of late. Few people, despite considerable efforts in some cases, are still managing to reject the evidence of their own eyes and ears. Climate change can no longer be filed under ‘future problems'.

Anita Varshney, Global Vice President of Strategy for Sustainability for SAP S/4HANA spoke with Computing to explain how SAP is acting as both an exemplar and enabler of greater sustainability and equality and of how they are working to change the perception that sustainability and profitability are mutually exclusive.

"Our goal is to make sustainability profitable and profitability sustainable," explains Varshney.

"To achieve this, enterprises must integrate sustainability into the heart of their strategy. This is the rationale behind the collaboration between SAP and Accenture on a series of guides with United Nations Global Compact which provide business leaders and their technology partners with a methodology to integrate and mainstream ambitious sustainability goals across business units by pioneering a performance integration approach that utilises enabling technologies."

The aim is to help SAP customers on their Sustainable Development Goals (SDG) Ambition transformation. This encourages organisations to set themselves more ambitious targets where their business can have the most impact.

At present, many businesses who signed up to the principle of SDGs are not on target to meet these goals by 2030. A lack of ambition and urgency has stymied progress. What SAP is trying to do is to elevate ambitions and then translate those ambitions into tangible actions and outcomes.

Promoting sustainability

SAP has set out to exemplify the approach that they encourage others to take, and a big part of its own approach is accountability for change. A big part is having representation at the highest level, said Varshney.

"We believe that our overall corporate strategy must itself be sustainable, and we therefore strive to promote sustainability across our entire business.

"Led by our chief sustainability officer, a dedicated team works to embed sustainability into our corporate strategy and drives new sustainability initiatives across the organisation.

"Our CFO is the sponsor for sustainability on the Executive Board, and we also have at least one dedicated senior executive in charge of sustainability in each Board area. These individuals form our Sustainability Council and are responsible for embedding sustainability in their business practices, such as by setting and reviewing relevant targets and implementing related programmes.

"Our external sustainability advisory panel consists of expert representatives from our customers, investors, partners, NGOs and academia. We have been leading the Dow Jones Sustainability World Index but we have to find ways to continuously improve and set higher standards."

Varshney is keen to communicate other ways that SAP is trying to exemplify the changes they want more enterprises to make. She mentions the use of an Environmental Management Systems (EMS) at more than 50 sites across 30 countries which is certified to ISO14001:2015 standards. As well as corporate offices, data centres are a significant source of carbon emissions.

"In 2014, SAP strengthened the integration of our environmental strategy into our business strategy by creating a ‘green cloud' powered by 100 per cent renewable electricity - one major step towards achieving carbon neutrality and upholding our commitment towards the RE100 initiative," Varshney said.

"We realise our green cloud with a dual approach. Firstly, we invest in very high-quality, EKOenergy-certified renewable energy certificates (RECs) to foster renewable energy generation; secondly, we produce renewable electricity in selective SAP locations worldwide through solar panels. This allows us to compensate all our facility and data centre emissions. Therefore, customers can significantly reduce their carbon emissions (Scope 3) by using our green cloud solutions and services."

This leads us nicely into the enablement aspect of SAP's program. Sustainability has moved up the corporate agenda, including those of SAP customers and prospects. A virtual sustainability summit held earlier this year was expected to attract around 500 registrations but attracted in excess of 4,000.

Customers can't wait, they want it now, Anita Varshney, SAP

"There is a huge demand from our customers on having sustainability embedded into their end-to-end business processes. They look to SAP because we understand how complex business processes can get, they look to us to help them with these challenges, not only within their enterprise, but also expanding towards the entire business network," explained Varshney.

"Customers can't wait, they want it now. They see EU regulations, potential mandatory disclosure on ESG, etcetera. They need to prepare right away because they can't change overnight. They want to do better and they're extremely motivated. We are proud that we are already delivering on our customers' asks, with a robust SAP S/4HANA product roadmap, embedded with sustainability innovations, beginning with SAP Product Footprint Management to be released in August."

Four dimensions of sustainable transformation

It was at this summit that SAP launched its four dimensions of sustainable transformation. The first of these centres on carbon and aims to enable SAP customers both to reduce carbon emissions, but also to share carbon data with their customers, supplier and partners, increasing transparency across Scope 1, 2 and 3 emissions. The second dimension is the circular economy, with the goal of plastic free oceans by 2030. The third involves ESG reporting with SAP enabling more transparency and granularity of reporting, and the fourth the building of socially responsible value networks.

Of course, in a year when very few business flights took place, and car journeys were drastically reduced, SAP, like most enterprises, experienced a significant drop in its own carbon emissions in 2020 and by the time their data was published, the firm was well ahead of both its original and revised targets. Rather than banking the rise, SAP has chosen to increase the scope of its ambitions and bring forward its target of being carbon neutral in its own operations by two years to 2023.

This willingness to take the stance of a role model and be more ambitious in their sustainability goals is an excellent way to convince others to do likewise and speed the pace of progress towards hitting SDGs across multiple industries.

Computing will run the Tech Impact Conference this year, exploring the relationship between tech and the climate - including case studies about the road to net zero, how to go green in your data centre and supply chain, and how to make small changes with a big impact. For those who are passionate about the planet - and those who are more wary - there has never been a better time to get involved.

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