SANTA CLARA, CA — When companies first begin thinking about sustainability and what it means for their business, they'll often start by creating a sustainability strategy.
It's a good first step, but they will soon face a common dilemma, according to Peter Graf, chief sustainability officer at business software firm SAP.
"Once you're active, you will find yourself pretty quickly in a spot where it's not enough to have a sustainability strategy," Graf said this week at an SAP conference for industry analysts. "It's really about taking the strategy of the company and making it more sustainable."
That's the position in which the company now finds itself: It has recognized sustainability to be part of its purpose and a way to deliver value to its customers. Simultaneously, SAP sees a clear link to its own business performance as it works to reduce its environmental impacts and engage its global workforce.
As a result, the lessons it is learning are informing the development of its products. At the same time, its customers are also pushing SAP faster down this path as demand grows for solutions to help them to manage their own sustainability programs.
At the company's 2010 Influencer Summit held Dec. 7-8, Graf and a string of SAP executives described how the company is designing products to help customers achieve a return on their sustainability investments. The company has sold sustainability-related offerings into 21 of the 24 primary industries. SAP makes the business for sustainability in five key areas: reporting and analytics; supply chain and products; workforce; reducing operational risk management; and energy and resource management.
Understanding energy consumption and acting on the data is what Graf called the "big money." SAP products allow companies to continuously monitor energy use in real-time on an operational dashboard, giving them the opportunity to make course corrections and reduce consumption immediately.
"We have put together a rapid deployment solution, which you can (eventually) buy online that uses these kinds of capabilities," Graf said. "The best, and many times quoted case is Valero, who in the first year of deployment saved $120 million, and is targeting and saving more than $200 million this year."
The company has shipped this year Sustainability Performance Management 2.0, Carbon Impact 4.2 and 5.2, and Environmental Compliance 3.0. SAP also offers enhanced REACH capability as part of SAP EHS Management, designed to help companies manage and track chemicals and substances that are restricted in products by an EU directive.
For the SAP Business Suite, a collection of applications aimed at mid-size to large companies, SAP has invested in new incident management features to make it easier to report safety incidents, as well as enhanced sourcing capability to allow sourcing managers to create questionnaires for supplier sustainability scorecards. For the future, the company is working on new global batch traceability, sustainable supply chain and operational risk management features.
Graf said one of SAP's biggest challenges is finding a way to assign a number to the impact its products can have on the marketplace. Its 2009 carbon footprint was about 425,000 tons of greenhouse gas emissions.
"The impact in carbon emissions of our collective customer base is about 10,000 times bigger than our own," Graf said. "What's going to be interesting to see is what kind of impact we have through our solutions."