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Daniel Schmid
Chief Sustainability Officer
SAP

25 August 2022

What goals has SAP set for itself in terms of sustainability?

We do not have a sustainability strategy, but rather a sustainable business strategy - this is what I am most proud of, that SAP recognized early on that sustainability had to be part of our core, our identity. This way of thinking dates back to 2009, when we made the difficult decision to return to the carbon emission levels we had in 2000, despite the fact that our company had grown four times larger in the interim. As intangible as this may sound, we met our target three years ahead of schedule. The next logical step was to become carbon neutral in our own operations by 2025, but the pandemic allowed us to push this deadline forward by two years (2023) - working from home reduced emissions from commuting and business travel, which accounted for a significant portion of our emissions.

In January of this year, we also pushed our target for net-zero emissions from 2050 to 2030; this includes the entire value chain, from our own operations to purchased products and services, as well as all downstream emissions (which account for approximately 80% of our total emissions).

What were the most significant changes you made that allowed you to meet your goals ahead of schedule?

On the one hand, we are shifting our business from on-premise to cloud, and all of our data centers have been powered by clean energy since 2014, the "green cloud". Internally, we have implemented a number of mechanisms. The first step is always trying to avoid or reduce emissions wherever possible, e.g. to avoid business travel by conducting meetings virtually whenever possible. Emissions that we cannot avoid or reduce, will be compensated. For example, whenever a colleague has to board a plane for business, the sustainability department receives money, which is then used to purchase offsets to compensate for the emissions caused by the flight. Another significant milestone was that we now report on this quarterly, just as we do on our financials.

This does not even begin to address the most significant impact we have through our own solutions, which enable our customers to carry out their own strategies.

What solutions did you come up with to support other companies in their plans?

Companies have made their commitments, but now we are in a decade of action. Reliable data and transparency are must-haves and this is where we have a distinct advantage - our software systems have been used to manage financial and material flows for over five decades. Many decisions are made at a corporate level, and we cover that through our solution SAP Sustainability Control Tower that enables companies to monitor and control sustainability and governance as well as financial metrics. The SAP Environment, Health and Safety can track and monitor scope one and scope two emissions. But companies need to also focus on scope three emissions and make decisions at a product level - for this precise purpose we have the SAP Product Footprint Management.

Reporting on sustainability is not yet a well-aligned process. How can we tell if a company is truly sustainable? 

There are certain standards that can be checked, which I see as only the beginning of the conversation. A truly mature company will have sustainability embedded in its core business strategy, as well as an understanding that sustainability is actually an innovation drive; challenging companies about their business-as-usual scenarios – how they design and develop projects, and so on.

 

Compensation is important, but it is only credible if it is built on a three pillar approach: avoidance of emissions, reduction, and only afterwards compensation through offsets.

 

We are all trained in business to make decisions on financials, which makes sense, but now we need to consider the impact on our people and our planet. This will lead to even better business outcomes and the long term success of a company. 

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