At the SAP TechEd event in Madrid recently, JD-OD.com had an interview scheduled with SAP’s Scott Bolick. Scott is responsible for SAP’s Sustainability Solutions. Dennis Howlett, of JD-OD, knowing my interest in sustainability, asked if I’d like to conduct the conversation with Scott.

I was happy to oblige and so here’s a transcript of our chat:

Tom Raftery: Hi everyone. This is Tom Raftery of GreenMonk TV, doing interview for JD-OD. And with me I have Scott Bolick from SAP. Scott, would you like to introduce yourself?

Scott Bolick: Thanks Tom. My name is Scott Bolick as you said, and I’m responsible for SAP Sustainability Solutions and those solutions are across at four different areas and hopefully we can chat a little bit about those now.

Tom Raftery: Sure. So Scott, sustainability it’s a – the whole interest in sustainability is wearing off isn’t it, nobody is really into sustainability these days. Am I right?

Scott Bolick: Well I think you are wrong, I think there is a caveat. I think one of the things that we’ve seen in the market which I think is actually a good sign is that sustainability was a topic de joure in 2008, 2009. It’s still there, you still see more and more CSOs coming online but what you are seeing is instead of a centralization of power within those chief sustainability officers, what you are actually seeing is the sustainability officers setting the strategy for the company.

And then whenever you look at the actual execution, when we look at where people are actually purchasing IT that really is coming down into the LOB, so it’s R&D for sustainable products. It is the supply chain when you look at sustainable supply chain. It’s manufacturing whenever you look at sustainable operations. So I think to say that it’s not there, it is wrong, I think it’s there, it’s stronger than ever. I think what people are discovering is it’s sedimenting back into the underlying businesses and that’s where it should be fundamentally.

Tom Raftery: Okay, but I mean with the current state of the economy, are people really willing to get their –stick their hand in their pocket and spend money on sustainability solutions?

Scott Bolick: Yeah, absolutely. And I think when you take a look at why people buy for sustainability, I think there is three reasons people buy. First and foremost is compliance, and there are increasing regulations around the globe whether it be for product or whether it be not just for — whether it be safety and showing that you are increasing the safety within your operations. And so one of course whenever you take a look at that and you look at the complexity of business, it’s spread out on global operations, they need solutions that are IT solutions to be able to adhere to those regulations in a timely and in a low cost manner.

Second you continue to see people interested in those solutions that help them save money, energy management obviously being top of mind.

And third, there are those companies that are spending on aspirational, really trying to understand what is the product footprint of the products that they sell into the market and how they can lower that footprint whether it’d be carbon or whether it’d be other substances.

Tom Raftery: And where are you seeing most of the traction these days? What is the most – what is the area of the largest – well either spend or interest for SAP at the moment?

Scott Bolick: I think if you take a look at some areas that are really hitting for SAP, one of the areas is operational risk management. And if you would go back and you just look at the last couple of years, what you see are these big events that these events happen and then there is a tremendous impact on the brand reputation, there is a tremendous impact on the financial valuation of those companies. And so what you are seeing is companies on a trend, the first trend on operational risk was really about compliance, am I compliant to regulations, now you are seeing people increasingly looking at proactive prevention, how do I actually go out and report incidents before they happen, how do they then analyze those incidents, put them in a risk framework and then how do I actually execute management of change. So we are definitely seeing a tremendous amount of interest from across multiple industries.

And finally what we are beginning to see is some really interesting stuff where people are looking at the tremendous amount of data they have and trying to figure out how they can correlate that data and actually get into predictive analytics around risk. So that’s one of the areas we’re definitely seeing.

Tom Raftery: Okay and when you talk about data I mean a lot of – the various solutions have massive amounts of data associated with them, how is SAP going to handle that, the big data issue?

Scott Bolick: I think one of the things that we are fortunate is that unlike some players in the market, we within SAP have strong technology both for analytics and then when you look at big data obviously we have HANA. So some of the things that we are doing is working with customers and determining how we can leverage HANA to push them over limits that they might otherwise have. Limits in terms of their own operations and limits in terms of processes.

One of the ones I love is we have an embedded product compliance customer who is now looking at putting embedded product compliance on top of HANA. So this company has 100,000 different recipes, they produce 3000 to 4000 documents a day and obviously that’s on the backend, but on the front end they have got to really make sure during the design process that they understand whether or not the substances, whether or not the ingredients are going to be compliant to regulations. One of the things they are doing is by putting it on HANA is they can get the check back in a second rather than getting a check back in terms of minutes or hours. And obviously if you are in R&D, the last thing you want to do is your designing — is to sit in front of the computer and wait to determine whether or not it’s compliant with regulations and obviously those regulations are regulations that are country specific.

Tom Raftery: Sure. So sustainability is here to stay.

Scott Bolick: Absolutely.

Tom Raftery: Great. Scott, thanks a million.

Follow @TomRaftery

SAP invited me to attend their combined Sapphire/TechEd event in Madrid last week. While there I took the opportunity to have a chat with Jeremiah Stone to get an update on the state of play in sustainability solutions.

Here’s a transcript of our conversation:

Tom Raftery: Hi everyone welcome to GreenMonk TV. We are in Madrid for SAP’s SAPPHIRE event and with me I have Jeremiah Stone. Jeremiah, you are on the SAP sustainability team. What is your role there?

Jeremiah Stone: So, I’m a senior director for solutions management and what that means in SAP is that I’m responsible for the business cases for producing our products, so developing new products. And then I work with our key customers as well in making sure that our products continue to meet their needs and that we do quite a bit co-innovation with customers and that’s my team that tends to drive that as well with our strategic customers and so really managing the business case and then we build and execution, and rollout of products.

Tom Raftery: So there is a business case for sustainability?

Jeremiah Stone: Well, at SAP there sure is. It’s a interesting aspect I think of our sustainability case that people typically are surprised by is that every single one of our investments is actually a bottom up business case just like any other piece of software at SAP where you have to build the customer business case first. So really what is the customers tangible pain, how much are they spending to deal with that pain today, what are their alternatives, how much can we generate in terms of value for the customer with some development, and then is there a reasonable value capture for us, in other words can we charge the customer a reasonable amount of money to justify us investing in the software. And so we do that for every investment that we make and so that also helps the conversation of course from a business point of view because then we’ve done all that work upfront, we can go to the customer, we can explain the customer business case that we’ve developed and we can validate that and from them to make sure that there is a return on that investment and then they can treat it like any other IT investment. And the other thing, you know with sustainability at SAP is its embedded into our business and so when I’m competing for development resources I’m competing right next to the guys who are developing for HANA, the people that are developing for HR, people for financials, CRM et cetera. So we would, be really treated just as any line of business at SAP, we don’t get preferential treatment et cetera and then really is based upon business case for each investment that we make.

Tom Raftery: Cool. And what is the hot button topic for people right now in sustainability?

Jeremiah Stone: It’s a good question, I think right now we see you know phasing of a development of the market, it continues to be really around management of risk and compliance primarily in the safety of operations. So and that goes really there’s asset intensive and asset non-intensive industries, so I’ve customers in transportations and logistics, major airlines, looking at how they can be safe and that is a bottom line number for them. Obviously if they are damaging aircraft or whatever they are not going to be performing well and so that there is really a safety org from a compliance point of view, that is access to markets. So as public and governmental toleration of eco-toxicity of hazardous materials et cetera is declining, there is this more and more transparency around products and their constituent chemicals et cetera and substances.

The regulatory bounds and burden is going up and on companies to declare the substances in their products so that they can sell them in those markets. That’s primary driver skill, we definitely see energy management is the fastest growing area and that’s really energy and environmental resource management, so not just energy but you can think really sort of all of the inputs into the business whether that’s energy for other resources in other words very much you could think of it as a traditional SAP strength, you think around energy. Although, it is a different challenge as you know because there is the utility as well, involved in that and that’s somewhat complex, there is definitely demand for that, is one of the fastest grown, it’s not biggest business yet, but it is the fastest growing. And then we continue to see a smaller market, but still increasing around analytics, reporting strategy management, setting targets, managing to those and then reporting out to I don’t know the global reporting initiative et cetera on sustainability performance, but for the majority where we are making our money today with our product lines is really around that risk management and compliance activities.

Tom Raftery: Okay and the whole sustainability area is a relatively new business area, is it one that you see is going to be going big time, is it, I mean we’ve seen a jump in last couple of years just because companies started getting into it, but you know is it on a hockey stick or is it kind of plateaued or where about is it?

Jeremiah Stone: Well yeah, I mean it’s very rapidly growing market. We see the overall market size growing compound annual growth rate of around 18% to 20%, so it’s a pretty significant growth in the current spending environment. Lot of that’s because of loss control. So if you think of the current global environment, access to credit isn’t available, stability of financial market we’ve learned, interested in making capital investments if they can’t ensure that that capital investment will be safe.

Tom Raftery: Yeah.

Jeremiah Stone: So in ironic way you know really is that sort of resource constraint or fear of loss that’s driving sustainability as well from any investment. So it isn’t necessarily a, you know there is a joke even people when they spend money on software for you know greed, fear or aspiration, most people assume it’s aspirational in nature when people make sustainability investments, because you want a halo or improve your brand image which — there is some of that, but most of our customers it’s really around the loss management. And to a certain extent the — you know the ambition to grow your brand, grow your business. We do have customers like Solvay for example, I think you may have gotten to talk to them over here.

Tom Raftery: I’m going to see them this afternoon, yeah

Jeremiah Stone: Okay, so I mean they — you know, really say that they are more competitive as a result of the investments that they make in sustainability. So it is a growing, it is an evolution of some older lines of business in this case environment health and safety management that has been there for a very long time. And you know we invested and purchased data that’s strategic to us a couple of years ago but we are on a pretty furious trip to double the pre-acquisition revenue relatively soon. So it is a fast growing market, we are having a lot of success with it and you know we believe that it will continue to be a strategic fast growing market, so.

Tom Raftery: Fantastic. Thanks a million Jeremiah. That was great.

Jeremiah Stone: Thanks for having me Tom.

Disclaimer – SAP paid for most of my travel, food and accommodation expenses to attend this event.

Follow @TomRaftery

Utility companies face significant challenges in the coming years, not least of which is the the need to increase revenues while helping customers reduce their consumption.

One trump card they will have is the data from their smart meter rollouts. This will enable them to offer energy services around the data which would not previously have been possible.

Simple examples of this are the ability to alert people if their consumption is about to tip them into a higher tariff band or, for people with holiday homes, a notification if the lights turn on when their property is supposed to be unoccupied.

These would be quite basic offerings – but with a little bit of thought one can imagine other higher value options.

Consider that according to the US Census Bureau:

The world’s 65-and-older population is projected to triple by midcentury, from 516 million in 2009 to 1.53 billion in 2050.

Further, there are currently 30 million solo-single households in the United States (more than the number of households containing married couples with children) and about one-third of these solo singles are men and women 65 years of age and older. The percentage is even higher in Europe.

Now, if I have an elderly relative living alone, wouldn’t it be a very useful service if I could receive a timely message from their utility company if there are deviations from the normal patterns of energy usage (if the lights aren’t turned off at 11pm or the coffee machine/kettle isn’t powered up at 8am)?

This kind of service should be quite straightforward for electricity utilities to provide once they start receiving the detailed energy usage data which smart meters will deliver. This will enable utilities to transition to becoming suppliers of energy services and open up entirely new revenue streams for them.

Photo credit gagilas

Follow @TomRaftery

When I interviewed SAP’s Jeremiah Stone last May about SAP’s Sustainability story at SapphireNow, he mentioned that SAP was committed to an increasing focus on sustainability customer success stories

I’m excited to hear less about SAP being sustainable in our vision and a lot more about SAP’s customers embedding our technology to have more sustainable business and more sustainable products of their own.

At SapphireNow, according to Jeremiah, around 80% of the Sustainability events were customer-led.

SAP seems to have continued that momentum, having recently published a series of videos of customers talking to SAP about how SAP’s sustainability solutions boosted their Sustainability programs. There are interviews with Lexmark, CSC, Dow, Air Products, amongst others.

It is one thing to be reporting on your own sustainability initiatives, as SAP do in their online Sustainability Report, but quite another when you can roll out customers who are willing to go on record saying your products helped them become more sustainable. That definitely helps take the credibility up a notch.

Now, imagine if you could quantify the sustainability savings your customers have achieved as a result of deploying your software…

Photo credit skpy

Follow @TomRaftery

I had a great chat with SAP’s Jeremiah Stone (Senior Director, Sustainability Solution Management) while we were at Sapphire Now in May. Craig Cmehil was good enough to video it for us, so here we are talking about SAP’s Sustainability solutions and SAP’s move to letting its customers recount their sustainability success stories.

Here is the transcription of our conversation:

Tom Raftery: Hey everyone; we’re at SAPPHIRE NOW. I’m Tom Raftery, and, with me, I have Jeremiah Stone from SAP. Jeremiah, can you tell us, first of all, what’s your role at SAP?

Jeremiah Stone: Hi Tom! Thanks for having me, I’m glad to be here on GreenMonk. I’m part of the Solution Management Organization within SAP for Sustainability. So, we’re really responsible for the roadmap and investment in our products and working with our customers to understand what their needs are and making sure that we have the right products to meet those needs.

Tom Raftery: Okay. Just before we get in to the whole SAPPHIRE NOW thing and what’s been happening here, what are the, products that you guys have around sustainability?

Jeremiah Stone: We have a wide range and it’s a good question, because sustainability means all things to all people and, I think, Vinnie Mirchandani said, “Don’t talk about religion, don’t talk about politics, and now don’t talk about sustainability, because it’s such a hot topic.”

SAP defines sustainability as products that help our customers’ businesses succeed not only in the traditional sense of what we always do to the profitable business, but also how to stay in business for the long-run. So, in a world with changing resource situations with volatility around natural resources, needs to curb pollution, be able to grow a workforce, be able to have more sustainable products, we build products that help customers have better run businesses.

So very concretely, software that helps you have a safer business, identify risk and have improvements in people, not getting hurt, which is a nice way to have a longer-term business – you’re not hurting your employees, you make that a box.

So, we have product compliance solutions to help people design and take better products to the market that have less toxicity in them, for example. One of my favorite example there is Molex that makes little connectors in computers. They were able to remove halogens from those connectors so they have a less toxic product then.

In the long-run where you have an end of life because it has no use in your home and it is off gas or that sort of gas. We make products for energy and environmental resource management. So, really how to cut your energy use and emit less. We have solutions focused on sustainable workforce. How do you engage your employees that are on the top for sustainability? Then also in a long-term have the long-term workforce. That’s really the analytics layer and how do you make the decisions on the basis of your business data. So, we have products in each of these categories.

Tom Raftery: Awesome, and, I’ve been at a couple of Sapphires at this point. In the last couple of Sapphires there was a lot of talk from the CEO’s on downwards about sustainability. This year less so. There seems to be a shift in focus. Can you talk a bit about that?

Jeremiah Stone: Well, I think that reflects to a degree the maturity of the topic and I think it’s not necessarily a topic where they are excited about it in the sense that it is new and defining. It’s now, I think, reaching the point where and I’m excited about this, because when things get mundane and boring it usually means you make someone successful with them.

Now, it’s assumed that sustainability is going to be on the floor, it’s assumed that we’re going to be focusing on it, it’s assumed that its part of it. And you did hear about it in the keynotes, but it just blends in. Vishal Sikka talked about it today that one of our on-demand products in sustainability will be adopting in-memory technology.

So, a lot of the major technology investments that companies make around mobility, around in memory analytics, these sorts of things are part of our investment strategy and portfolio for sustainability. Now, it just becomes assumed with SAP products that we’re focusing on sustainability, which is what makes me excited as a solutions guide for that is that we don’t think if it is a separate category that we have to crow about; it now becomes part of our business.

SAP’s purpose is to help the world run better, to create enduring prosperity for people everywhere and that sustainability is just part of that purpose.

Tom Raftery: Sure and there seems to be a lot more customer sustainability events going on this month than ever before?

Jeremiah Stone: Absolutely, and that was great. I think something on the order 80% of the activities we’re doing – the forums, the customer roundtables, those are the things that were led by our customers using the products and it’s a great…

Tom Raftery: From what I was seeing, it seems to be a lot — this event, the whole SAPPHIRE NOW thing seemed to be a lot more on sustainability from the bottom-up rather than the top-down.

Jeremiah Stone: Absolutely! That’s a great way to put it and we were talking about this before. I’m excited to hear less about SAP being sustainable in our vision and a lot more about SAP’s customers embedding our technology to have more sustainable business and more sustainable products of their own.

That’s what we’re really starting to see in this you know there’s a lag when people buy the software and implement it and start to use it. I think we’re through that lag phase and it’s just great to see the momentum and the tipping point pass and people are starting to use this and then customers’ getting up and being really proud about the successes they’re having and how it’s helping their business.

Tom Raftery: Awesome. Jeremiah, that’s been fantastic, thanks again.

Jeremiah Stone: Alright, thanks Tom, I appreciate it.

Follow @TomRaftery

IBM turned 100 earlier this month – a significant achievement for any company, but for one in the constantly shifting sands that is the technology industry, it is particularly notable.

As part of the celebrations, they released the video above outlining 100 of their achievements during that time. The video is beautifully executed and it is a great IBM marketing tool. It is easy to see that the video has a strong sales message towards the end (which tbh, is a tad unnecessary) but the earlier content is definitely worthy of comment.

Some of the highlights for me were:

1. In 1914, 76 years before the US Disabilities Act, IBM hired its first disabled employee
2. In 1930 IBM receives its first patent for a traffic signal timing system
3. In 1932 IBM started education programs for employees and customers
4. In 1934 IBM introduces group life insurance (in the midst of the Great Depression)
5. In 1935 IBM opens the first professional training school for women
6. In 1941, IBM hired a legally blind employee, psychologist Dr. Michael Supa, to make its products more usable by the visually impaired and to assist in the hiring of 181 people with disabilities over the following two years
7. In 1942 IBM launches a disabled employee training program
8. In 1943 Ruth Leach Amonette is elected IBM’s first female Vice President
9. In 1946 IBM hires T.J. Laster, their first black sales representative, 18 years before the Civil Rights Act of 1964
10. In 1953 IBM chairman Thomas Watson issues the company’s first Equal Opportunity Policy letter
11. In 1967 IBM employee Benoit Mandelbrot ask’s How long is the Coast of Britain and a new branch of mathematics (fractal geometry) is born
12. In 1981 IBM introduces the first IBM PC
13. In 2004 IBM creates the World Community Grid – a public grid computing project to tackle scientific research projects that benefit humanity
14. And in 2008-9 IBM creates the Smarter Planet and Smarter Cities programs.

Other highlights include inventions of the ATM, the barcode, and DRAM; the fact that at least 3 IBM’ers have won Nobel Prizes; and IBM’s Deep Blue beating world champion chess player Gary Kasparov.

It is easy to criticise this video by saying it is nothing but a sales pitch – but the strong sales message is only really in the final two minutes of the video (from 11:14-13:15) – if you stop the video at that point, you miss nothing and get see for yourself the list of their achievements.

These are just my favourites, what are yours?

Follow @TomRaftery

The BP Oil Spill in the Gulf of Mexico was, unfortunately, far from being an isolated incident. Chevron in Ecuador, Shell in Nigeria, Exxon in Alaska – name me an oil company and I’ll name you an environmental disaster. And, it appears that some of them are responsible for funding, climate change denial.

And yet at a number of conferences I’ve been at recently, oil companies have been mentioned as customer references from the podium. From my position as an advocate of green measures, that irks.

At SAP’s Sapphire Now conference last week for example, during the keynotes given by Vishal Sikka, CTO, and Hasso Plattner, Chair and co-founder of SAP, three oil companies were featured. And this is a company which is going to great pains to establish a reputation for itself as being being Sustainable.

It is not like SAP were short of customer references – there were probably north of 30 customers shown between the two back-to-back keynotes. No-one would have complained if there were three less.

So, they had oil companies, ok, well to counter that how many of the other customer companies represented were renewable generators? Not one. Not a single one.

C’mon guys, it’s not like renewable generators have a shortage of big data – I remember on visiting Logica’s center of excellence in Lisbon seeing their windfarm management application. They told me that a typical turbine outputs around 250 data points per minute and that particular application was managing over 2,000 wind turbines.

Leaving Logica aside, there are plenty of other well known companies heavily involved in renewables who could have been showcased – think Siemens, Vestas, Samsung, Mitsubishi, Iberdrola, Hyundai, GE, Gamesa, and Alstom for wind energy; then there’s Bosch, Sharp, and Sanyo for solar, for example.

In fairness to SAP, one of their demos, from UK energy retailer Centrica, was a Smart Meter Analytics demo where Centrica was able to utilise the analytics to help consumers reduce their power consumption – more on which in another post.

And, I should not ignore that fact that oil companies such as BP have invested in renewables but is that where their focus really is? SAP is pushing the sustainability agenda and for that they should be given credit. But… show us the evidence in the real world of customers that SAP is supporting.

That’s how you gain credibility.

You should follow me on Twitter here

Photo credit NOAA’s National Ocean Service

I attended SAP’s SapphireNow conference this week. At previous Sapphire conferences SAP went strong on Sustainability – having guest speakers like Al Gore and Richard Branson and also having both Co-CEO’s address the topic strongly in their talks. This year however, they went a different route.

This year the main themes discussed by guests and Co-CEO’s were mobility and in-memory computing with sustainability merely referenced a couple of times in passing. On the other hand, a search of the online agenda shows that there were 60 sessions at the event which were Sustainability themed. What’s more, as SAP’S VP Marketing for Sustainability Solutions Marty Etzel pointed out to me, 80% of those sessions were customer or partner led.

I think it shows a certain maturity and confidence by SAP that they are willing to step back from the previous top-down approach to Sustainability that they have espoused and to allow their customers and partners to bottom-up tell the story on their behalf. It is always a far more convincing story when it is your partners and customers are talking up your solutions.

Due to meetings, I couldn’t get to as many of the sessions as I wanted to but fortunately many of them were recorded for replay on the SapphireNow so I’ll be able to catch up with them over the coming days.

It is a gutsy move by SAP to let their customers tell their Sustainability story – but it is one which is vital for the credibility of their solutions.

Disclosure – SAP paid my travel and expenses to attend this event

You should follow me on Twitter here

Photo credit Tom Raftery

I had a Skype chat recently with SAP’s Chief Sustainability Officer Peter Graf where he gave me a demo of their new 2010 Sustainability report.

With Peter’s permission, I recorded the demo for publication on YouTube. The video above is the result and the transcription is below.

Some highlights Peter mentioned include:

1. More sustainable operations have saved SAP €170 million (!) between 2008 and today,
2. SAP are updating their Sustainability report quarterly and are embedding it more and more closely with their financial reporting and,
3. SAP have deep social media embedding in their report

With this report, SAP have put clear blue water between themselves and any other sustainability report. SAP can still take it up another few notches (productising it, putting an api in front of it, publishing in xbrl, etc) but this is the kind of reporting everyone needs to be moving to, as a baseline. Kudos to SAP for once again setting the bar with this report.

Now here’s the transcription of the demo:

Tom Raftery: Hi, everyone. Welcome to GreekMonk TV. We are talking today to SAP’s Chief Sustainability Officer, Peter Graf, who is going to give us a quick demo of the new 2010 SAP Sustainability Report.

Peter Graf: So, this is SAP’s 2010 Sustainability Report, which people can find online at sapsustainabilityreport.com. The report lays out the three key areas of impact for SAP. In the first place, SAP wants to become a more sustainable company, so we are talking about our own sustainability performance. The second section of the report is about how SAP helps customers to run more profitably and sustainably, so that’s mostly a conversation about our applications and software solutions.

And then finally, there is a section on how people at SAP drive opportunity for others through IT. And then, certainly the last part, as always when we put our report on the line is that encouraging into action and dialog between us and those who come and visit the report. And we call that section Do Your Part and that describes how everyone can contribute.

Tom Raftery: Great. Can you show me some of the details of how SAP have done in the last year? How does it look onscreen, because it’s very different from any other sustainability report that’s out there?

Peter Graf: Exactly. So before we go there, the data that we talk about is all assured by KPMG, and there are two levels of assurance and yes, this report is A+ from GRI perspective. It’s got the best rating that you can get from GRI. It complies with a whole variety of standards, but most importantly, we have not only done limited assurance to our greenhouse gas numbers, we’ve actually gone for reasonable assurance, meaning the assurance company actually assures that this is really our footprint. And we do that because we believe in the future there will be much more scrutiny around how people are reporting greenhouse gas emissions.

And that’s what the greenhouse gas emissions look like. You can see the trend from 2000 to 2007; we’ve always increased our emissions. In 2007, we set ourselves the goal to reduce our emissions step-by-step back to the level of 2000 by the year 2020, so we have an absolute carbon target. That is pretty aggressive considering that in 2000, we had about 24,000 employees and already today in 2011, we have more than 50,000 employees and we want to obviously continue to grow as a company.

You can also see that we have kind of flipped the chart to kind of visually highlight that emissions are seen as a liability to SAP so they show below the line.

Tom Raftery: And clicking on any of those bars redraws the kind of pie chart on the right?

Peter Graf: Exactly, so you can go and drill into the different years and you can see how the emissions change. For example in 2008, we had 31% of our emissions from flights that also tells you that we include Scope 1, 2 and 3 emissions in our calculation.

That number dropped dramatically in 2009, given that in the times of economic crisis, we just don’t service as many customers, so you can see that here. And then in 2010, the number continues in absolute terms to be reduced, which is amazing given that we have actually increased our revenues by 17% in 2010 while reducing our emissions. You can see that very nicely when you look at the carbon emissions on a Euro basis. We are now at 33.9 grams per Euro revenue and in 2008, that number was 45.6 grams.

So, in terms of carbon efficiency we have dramatically accelerated and you can drill into different areas. For example, revenue in the Americas, you can actually go and look at different scopes and include or exclude them in the competition. So that’s the benefit of having this kind of interactivity.

Tom Raftery: The obvious question that comes to mind then is, if you are spending all this money on getting carbon out of your system, out of your organization, it must be costing the company a small fortune.

Peter Graf: Yeah, that’s the secret sauce I would say, because what we do at SAP is from the carbon perspective, we have a very, very good idea about where we need to kind of have activity in order to have a positive financial impact. So, here you see the SAP specific abatement cost curve that we have, which is produced with the help of SAP carbon impact and you can see, for example, for every ton of carbon that we avoid using video conferencing, the company saves €654 and there are 39,000 tons that we can abate that way. So, the width of every one of those rectangles describes how much carbon we can save, the height describes the financial impact.

We have done an analysis in terms of a business as usual case, so we extrapolated our carbon performance from the 2000 to 2009 further into the future in the business as usual case and in comparison to that business as usual case Tom, we saved €170 million. So, 170 — so it looks like this is expensive stuff, but in reality for us, we live the sustainability business case and we are bringing in savings by becoming more energy efficient.

Tom Raftery: So, you are also going beyond not just in terms of presentation and interactivity, but you are also going beyond what most of the companies are doing as well by reporting not just once a year or not just once every two years as some companies are doing, but once every quarter?

Peter Graf: That’s correct. And we’ve just announced our first quarter results. We have a 6% increase in carbon for the first quarter of 2011, which we can easily track to a 5% increase in employees and we have had a very, very good performance last year in terms of carbon, so we need to keep on our toes and do the right things.

I want to highlight one element which is our increasing renewable energy, which went from 16% to 48% last year globally. Again, you can see the type of charts we used. Below the line, we have fossil and nuclear sources for electricity; above the line, we have renewable sources like wind and hydro. So there is a big shift going on between 2009 and 2010, how we source our electricity and the beauty of this chart, below the chart we show how we do less bad and above the chart we show how we do more good and the change is pretty significant.

I mean, look in 2009, we had probably 16% total renewables and the number has grown so much. While in addition, the absolute number of gigawatt hours of electricity we consume has been reduced to 268 from 301. So, our strategy is to reduce the distance from this point to that point and at the same time shift the whole thing up.

Tom Raftery: Are you doing any — or have you plans to do any integration with your financial reporting?

Peter Graf: This report is actually launched in an integrated fashion with our financial report. So for example, if I go and look at the overall performance and I’m interested in revenues for example, if I click on that what is happening is that I’m branching out to SAP’s annual report. So, there is no redundancy and the way how these reports are designed you know, there is — from a layout perspective the same kind of branding and so, the two reports are interconnected, so we avoid redundancy.

We are not yet in one report, but we have taken a significant step, because we are launching these reports at the same time on the web and they are linked with each other. So, that’s an intermediate step, but the trend certainly goes to what one report is.

Tom Raftery: Last question, I’m a big user of Twitter and to a lesser extent Facebook as you know and I see a little Fs and Ts up there in the top right. I assume this means that I can take parts of the report and drop them into Twitter and Facebook and I see a LinkedIn link there as well?

Peter Graf: Yes, exactly. So first of all, it’s interesting to see that there are really conversations going on, on the right. People can rate these and you can look at things from a time perspective or most popular. You can always share comments and when you do, you are asked to use your credentials in one of those social websites to go and leave a comment.

So, for example, I can now login in Twitter and use my Twitter account here and sign in. At that point in time, I’m brought back into the application, now I’m logged in into the report and when I share something now, I’m actually putting something out there.

I don’t want to type in this is a test, but when I do, you are getting the question, if you want to tweet it at the same time as leave your comment on the report. And in this way, we get a lot of traffic, because these comments go out on Twitter and on the web into Facebook and people come back to the actual site.

The other beautiful element of the logging in is that you can really ensure that your voice is heard. So for example, this is our materiality matrix and it’s a way for us to have structured feedback from people that go to the report. You can see how over time materiality changed, so things became more important, things became less important and this is a real time feed.

So, I can actually go in, open this matrix and drag and drop points there according to what I think is important for me and for things that I think that are important for SAP. And when I go and save this, very interesting things happen, this data comes back to SAP and we can actually go and look at the navigated view and that’s what I can show you right now.

So, if I go to real time this is the aggregate of all the hundreds of people that went there and communicated to us what they deemed to be important and what not. And people are really making up their mind; there is a lot of “Yes or No.” It’s pretty clear what’s in and what’s not so important and we like that, they are better — that’s a great feedback for us.

There is one more thing Tom that I would like to highlight, which is the impact we have now taken, not just our own operational impact, but really the impact we have on a greater scale. And we have done some estimates in terms of what is the impact of SAP through its customers on the world.

So, for example, we believe that our sustainable supply chain solution help about 800 million consumers live safer and healthier. In other words, the product safety capabilities that SAP brings to the table combined with the large amount of customers in the consumer space of SAP have delivered significant value to everybody and that’s how we are describing that.

These are estimates and we want people to comment to how we get to the number, because we explain it in detail, this is how we get to this number and we really would like more feedback from everybody in terms of how we measure that and how that could be improved.

So, if anyone has a comment, please leave it up here.

Tom Raftery: Cool, Peter that’s been fantastic. Thanks a million for that, thanks for coming on the show.

So I wrote a post the other day entitled Have HP’s senior executives lost interest in Sustainability? after attending a HP event in San Francisco. It was a little unfair because I concentrated on the lack of mentions of Sustainability by senior management on the first day of the event while leaving out the fact that I had interesting discussions with people involved in sustainability initiatives within HP the following day.

One of those I talked to at the event, Deb Lyons, was concerned enough by my piece that she went to the trouble of emailing me some of HP’s more impressive Green initiatives:

1. HP published a fascinating paper [PDF] to quantify the carbon savings associated with switching from analog to digital printing and came up with a savings of somewhere between 114-251 MMtCO2 eq per annum (MMt CO2 is million metric tonnes of CO2) – similar to the savings which would be achieved by a broad implementation of lighting automation or extensive implementation of telecommuting!
2. When printing is absolutely necessary, HP have comprehensive paper conservation and sourcing policies which include “a goal that 40 percent or more of the HP branded paper sold will be Forest Stewardship Council (FSC) certified or have more than 30 percent post-consumer waste content by the end of 2011″, an Eco Printing Assessment for customers and a reduction of paper shipped “in the box”
3. While HP has yet to release its 2010 CSR report, its 2009 one is online and, in fairness, it is one of the better CSR reports produced by a tech co. (though it has a long way to go to catch-up to SAP’s 2010 Sustainability Report, which was released this morning!).
4. I referenced the fact in my previous post that HP is becoming a devices company (between desktops, laptops, and more recently tablets and smartphones) so it is heartening to see HP have comprehensive policies around sourcing conflict minerals in Africa
5. and finally, HP announced the other day that it had exceeded its target of reducing the energy footprint of its products by 40% by the end of 2011 and now HP products are 50% more energy efficient than they were five years ago. The release from HP went on to assert that “if all makes and models of printers, notebook and desktop PCs, displays and servers shipped in 2005 were recycled and replaced with new HP energy-efficient models, customers could save approximately $10.4 billion in energy costs, and avoid more than 40 million metric tons of CO2 emissions within a year” – a pretty impressive numbers!

Another release Deb pointed out to me was an announcement that HP are helping Shell extract oil and gas more efficiently from the ground – personally I believe that any technology which helps increase the amount of fossil fuels we burn should be criminalised, not praised, but that’s just me!

So, leaving aside the oil and gas announcement, HP’s green credentials do appear to be completely genuine, laudable even.

Kudos to HP for these and their other Green initiatives – however, I still believe it was a mistake for their executives not to have them as a theme running through their talks. I understand the HP thinking that “Sustainability is part of our DNA, so much so that we take it for granted that it is built-in to everything we do” – I’m paraphrasing liberally. But, the issue is that if your executives are not talking about sustainability, your stakeholders may not be as convinced about your commitment to sustainability. If Sustainability was left out of the talks because there was a lot of content to be worked in which had to be prioritised, just how far down the list of HP’s priorities does Sustainability lie? From talking to HP, I know it is not far down at all, but listening to their executives, you would not get that impression.

HP has a messaging problem around Sustainability. It isn’t that they don’t do Sustainability, it is just that they seem to be shy about talking about it. With the rise and rise of Ethical Consumerism, this shrinking wallflower attitude may not be Sustainable!

You should follow me on Twitter here

Photo credit Tom Raftery