Johannesburg — The secret to establishing a sustainable business over the long-term lies in having clear and auditable access to the status of the supply chain’s performance on key environmental measures. This is the view of Sven Denecken, Vice-President Sustainability Co-Innovation at SAP, during his keynote address at the inaugural SAP Sustainability Summit, in South Africa, held in Johannesburg recently.
SAP has embarked on an aggressive ‘green’ drive, choosing to lead by example and setting itself the ambitious target of reducing its CO2 emissions by the year 2020 to 2000 levels. The business software vendor’s credentials in the field of environmental awareness and practices was reaffirmed again in January this year when it was named to the Corporate Knights Global 100 Most Sustainable Corporations list for the sixth consecutive year.
“We believe there is only one option if you want to excel in sustainability and that is if you tackle the supply chain,” asserted Denecken. “Where and how you procure makes you reliant on other companies and how they are dealing with sustainability. So we see a lot of push down the supply chain to see how to get data and transparency from where you procure.
“At the end of the day you are taking over a lot of liability, so this data should be very secure and very clear. It’s also about exchanging that data because you will be judged on that information by companies you sell to. They will start to ask the nasty questions, like what is the footprint of your company? What is the footprint of your supply chain? Because they will need to take it into their equation.”
Denecken illustrated this point by relating how US discount retailer Wal-Mart determined that 92% of its carbon footprint lies in the supply chain.
SAP has developed a host of reporting and optimisation tools to help customers achieve a better view of their organisation and supply chain, while also generating reports and dashboards that provide an organisation-wide view of performance according to set criteria.
Denecken advises that the key measures companies should have a clear hold on – internally and externally – include the cost of energy, transportation, and the overall product or service life cycle, specifically with a view at the design stage of what the costs and implications are going to be on recycling, for example. Existing and proposed legislation is another key area that companies need to be aware of, with Denecken saying that leading companies are already calculating the impact of upcoming legislation on their operations.
He adds that the issue of sustainability can no longer be seen in isolation and it has to be linked to the profitability of an organisation.
“You can only do that if you holistically tackle environmental, social and economic trends and if you not only look at the risks, but also the opportunities that can be derived from that. As an organisation that touches 65% of the worldwide GDP, SAP has taken it upon itself to use that position to influence thinking on sustainability and how to achieve that profitably,” he says.
SAP is the world’s leading provider of business software(*), offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 95 000 customers in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol “SAP”. For more information, visit http://www.sap.com.