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:
- More sustainable operations have saved SAP ?170 million (!) between 2008 and today,
- SAP are updating their Sustainability report quarterly and are embedding it more and more closely with their financial reporting and,
- 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.