The world faces increasing climate and social crises. Comprehensive assessments have given us a deeper understanding of the science and the role of industry. As a global technology company supporting the vast majority of the world’s business, SAP needs to lead from the front with our ambitions and actions. That is why SAP has committed to achieve net-zero emissions across our value chain by 2030.
Since 2009, SAP has been on a sustainability journey with the objective to create positive economic, environmental, and social impact within planetary boundaries. Along the way, we have learned a great deal about measuring economic, social, and environmental performance and integrating sustainability into our business strategy. Central to this effort has been a continuous effort to decarbonize our business. Setting ambitious targets and leveraging digital solutions have proven crucial.
Raising our ambition to achieve net-zero emissions is a key element of our approach to sustainability, which looks across the interconnected areas of holistic steering and reporting, climate action, the circular economy, and social responsibility.
What Does Net Zero Mean?
Net zero is a state where the greenhouse gases going into the atmosphere are balanced by removal out of the atmosphere. Corporate net-zero pledges have gained significant traction as half of the world’s largest companies, representing an annual aggregate revenue of US$27 trillion, are committed to net zero.
There are a number of definitions of net zero and how companies can achieve it. SAP follows the Science Based Targets initiative’s (SBTi) Net-Zero Standard , which provides a credible and independent assessment of corporate net-zero target setting in line with climate science. The continually improving standard enables companies to align their climate actions with limiting global warming to 1.5°C. SAP became a member of SBTi in 2017 and was the first German company with a science-based carbon reduction target for 2050. In 2019, SAP raised its commitment and adopted a 1.5°C science-based emissions reduction target. We announced our net zero by 2030 ambition in early 2022, bringing this commitment forward by 20 years.
Achieving net-zero emissions across our entire value chain means that all our emissions across all emission sources need to be either eliminated or, up to certain limits, compensated for. These emission areas, known as scopes, include those from our own operations, those generated by the energy we purchase to run operations, and finally, the largest area, external emissions such as those incurred by employee travel, items procured, and customer data center use.
Targeting Our Entire Value Chain
SAP’s net-zero plan is implemented through a comprehensive and integrated approach that involves all functions in the company, customers, suppliers, partners, and other stakeholders. We have established a cross-company program team involving experts from different lines of business to plan and implement our net-zero transformation. Reducing emissions from the use of SAP software will be the primary area for reductions, followed by purchased goods and services. The SAP net zero by 2030 approach includes:
- Accelerating the transformation of on-premise customers to the cloud through our market-leading RISE with SAP and GROW with SAP offerings
- Enhancing direct investments in renewable energy sources and operating our internal and external data centers on 100% renewable electricity
- Reducing emissions by improving the energy efficiency of best-in-class data centers – our own, our co-locations, and hyperscalers – with sustainable programming and a cloud carbon footprint calculator for all SAP cloud solutions
- Strengthening engagement with key suppliers to commit to net zero and deliver carbon-neutral products and services
- Electrifying the vehicle fleet, promoting green mobility, and enabling hybrid work situations
- Compensating for emissions by investing in high-quality, nature-based solutions, such as reforestation, renewable energy, and community development, that have verified environmental and social benefits
- Enabling our customers and partners by adding sustainability features and functions into our core offerings, such as SAP S/4HANA, SAP Ariba solutions, and SAP SuccessFactors solutions, and by giving them tools, guidance, and best practices to measure, manage, and reduce their emissions through our portfolio of dedicated sustainability solutions including SAP Sustainability Footprint Management, SAP Sustainability Data Exchange, SAP Sustainability Control Tower, and SAP Responsible Design and Production
- Accurately measuring and reporting emissions using the Greenhouse Gas Protocol and the Science Based Targets initiative and showing progress and performance through platforms such as CDP, EcoVadis, and the Dow Jones Sustainability Index
Capturing the Opportunities of Net Zero
We have many achievements to build on, but we also are charting new territory. 2030 is not far away. The challenges increase the farther we move upstream and downstream into our value chain. Despite the complexities, there are enormous opportunities ahead as we establish further success with our net-zero efforts.
From a business perspective, focusing on net zero means reducing risk, improving SAP’s operational efficiency, and delivering cost savings by reducing our energy consumption and waste and optimizing our processes and resources. Net-zero action helps increase our market competitiveness by creating new products and services that meet the growing expectations of customers, partners, and regulators for low-carbon and sustainable solutions. We’ll also be better at attracting and retaining top talent who are increasingly discerning about their employer’s sustainability actions. We’ll offer a compelling case to investors who used focused criteria to inform their holdings. Finally, we’ll continue to enhance our reputation with industry media and analysts as a leader and innovator in sustainability. And most importantly, we’ll reduce our overall carbon emissions to provide much-needed relief for the over-accumulation of greenhouse gases in the atmosphere.
With an increased sense of urgency, we recognize the responsibility, as well as the opportunity, to step up and drive a faster transformation toward a sustainable future. Not only must we accelerate our own net-zero transformation, but we must help other businesses and industries reinvent themselves as well. Only a fundamental transformation of our global economy will allow us to limit global warming to 1.5°C. It’s vital that we build sustainability into the very nature of how we do business.
Daniel Schmid is chief sustainability officer at SAP.