How SAP's sustainability program got built

Less than three miles south of Stanford University, just below a slope crowned by Coast Live Oaks, sits the American office of the world's largest business software company. From here, Chief Sustainability Officer Peter Graf directs the sustainability and corporate social responsibility efforts of SAP, which makes sustainability software used by about 1,700 customers worldwide.

He explained to GreenBiz how, after a long career in marketing, he became a sustainability expert, overseeing multiple teams that not only run internal programs at the Waldorf, Germany-based company, but also develop software for other major corporations to track everything from internal energy efficiency programs to sustainability in supply chains. SAP's software has helped customers reduce carbon emissions by 5.7 million tons, saving $550 million in energy costs.

We browsed the SAP sustainability report, and Graf demonstrated how -- thanks to the hundreds of key performance indicators (KPIs) SAP tracks -- the data can be sliced and diced in multiple ways. For instance, SAP can see what its greenhouse gas footprint looks like per employee, or by revenue, and review how much corporate cars, business travel, data centers, buildings, and other factors have contributed to that footprint each year.

"Many people ask me, is sustainability only about efficiency?" said Graf. "And the answer is no, it’s partly about efficiency, about doing things right, but it’s also transformational, about doing the right things, and that means doing things fundamentally differently from the past."

Below is an edited excerpt of our conversation.

GreenBiz:      You started the sustainability program here. How did that come about?

Peter Graf:    I woke up one morning and I had a hard time motivating myself to do another year of marketing. [I had] two small kids, and I thought, “What would be more exciting, more meaningful to me where I am in life right now?” And the sustainability discussion just kind of took shape.

Sustainability in the most critical way is the ability to make things relevant to the people that are listening to you. Customers need to make a business decision: "Am I going to invest money into software that will help me run more sustainably?"

It’s a purely financially driven conversation. And yes, it includes environmental and social aspects, absolutely, because you can’t ignore them anymore, they’re overlapping.

So that’s one type of conversation. But frankly, when you talk to your own employees, they don’t care how much money SAP saved by becoming more sustainable. We saved $250 million over four years by becoming more sustainable in our own practices, but our employees say, “Yeah, but that’s not why we do this. We do it to protect the environment, to re-energize our communities, to be an example to the world.”

So you see the contradiction. And navigating through that at the beginning of the sustainability journey, that was pretty intense, ‘cause we’ve made a lot of mistakes communicating the wrong things to the wrong people.

GB:     It sounds like it’s one message down and one message up.

Graf:   And then there’s the message on the side, which is even harder. Now you’re talking to middle management; they’ve got their hands full, they’re under stress and have limited resources, and you come and you want to give them another KPI or you want to ask them to do something that they see is in contradiction to what they’re trying to do and what they’re paid for.

So it’s a job where you’re in a continuous state of unhappiness because you know all the things that should be done in addition to the things that have already been achieved, and it’s a lot about engaging people on different levels.

Photo of Peter Graf courtesy of SAP.

Next page: Getting upper management on board