May 24, 2015
05.02.2011 - 11:10AM
Corporate Social Responsibility
By CSRwire Contributing Writer Jayne Flannery
Leading up to the Ceres Conference 2011, Peter Graf, chief sustainability officer and executive vice president of SAP, creates a compelling case to embed sustainability within existing economic power structures. Jayne Flannery reports.
Peter Graf is weary of pessimism. He does not believe the recent economic collapse or society's continuing failure to rein in carbon pollution demonstrate a systemic failure of capitalism, but rather an inability to grasp its inherent potential.
"We are not on the eve of an ideological revolution. But I believe the outstanding businesses of tomorrow are poised to undergo a profound transformation of perception that will embed sustainability within existing economic structures and institutions because a compelling business case can be created for it," he states.
He highlights the synergy between sustainability and a new modus operandi for capitalism. "People talk endlessly about risk, climate change and diminishing resources. To reverse the argument, let's talk about opportunity. To connect sustainability to capitalism, we should not be talking about climate change, but about energy cost and the myriad of new approaches to energy efficiency. Businesses should not be focusing on regulatory compliance, but on more effective ways to compete and win customer loyalty. Why opt for supply chain risk when supply chain collaboration offers the opportunity to build products that are not only better quality and more sustainably produced, but also cheaper?" he continues.
Graf believes a classic response pattern is emerging to the sustainability challenge. "The first stage is compliance, which offers no competitive advantage. Then we see a move to optimize resource consumption, which leads to internal waste reduction and savings. After this step we typically see companies attempting to translate their environmental credentials into brand value. The omnipresence of the Twitter generation and the Web 2.0 community may be doing a great job monitoring corporate behaviour, but there is still a need to inform and empower consumers more effectively."
"The last stage, which is perhaps the most difficult of all, is the adoption of an over-arching corporate strategy that has sustainability at its core, rather than as a discrete entity standing alongside other discrete strategies such as human resources, procurement and so forth."
He is keen to see sustainability reporting evolve into sustainable performance management within a forward-looking, holistic framework that incorporates social and environmental dimensions. "All businesses are different and there is no set formula. My task is to distil a pattern and translate it into software that can track, report, optimise and improve performance across all business areas," he says.
SAP is the market leader in business enterprise applications - research conducted by McKinsey points to SAP influencing one-sixth of the planet's collective carbon footprint. "We automate and increase the efficiency of thousands of processes that have a negative impact on the environment. It means we have a massive impact on how the world is run and how resources are managed. If we want to continue to be the market leader in a world that is demonstrating a demand for consumption that is simply not viable, it is incumbent upon us to come up with new solutions," he declares.
SAP has systematically increased revenue over the past three difficult years, but has slashed its carbon footprint by 25 per cent. In 2009 alone, €90 million was cut from the energy bill. "It is natural to us to extend our own approach to resource husbandry to forestry, minerals, utilities or any other sector. For example, our energy efficiency solutions have already saved 3.5 billion kilowatt hours and 800 million consumers across the planet benefit from product safety solutions supported by SAP software," he says.
"In a better managed world, IT companies can be leaders in sustainable practices and drive economic opportunity. But it is only possible to achieve change within the confinement of existing structures and institutions. We need to use the language and mechanisms that capitalism itself has generated to explain why sustainability is valid from a business perspective. Our mission is therefore to make a contribution towards greater sustainability, but also towards greater profitability," he concludes.
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device - SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 109,000 customers to operate profitably, adapt continuously and grow sustainably. For more information, visit www.sap.com.
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