The trouble is, we think we have time.
I’m sure American scholar and author Jack Kornfield won’t mind me paraphrasing him slightly. Because here’s the thing: in spite of talking about climate change and global warming for as long as I’ve been working in technology, we’re at a tipping point. In less than seven years, global warming will be irreversible.
As businesses, we’re starting to feel the heat – literally and figuratively. Studies show that future years are going to be hotter than ever. At the same time, there’s growing pressure from all sides for companies to go beyond beautifully designed sustainability reports and actually demonstrate the carbon footprint of their products, and lay out clear plans to reduce them.
Consumers and customers don’t just value sustainability, they’re prepared to pay for it. More than two-thirds are willing to pay a premium for brands that are sustainable and environmentally responsible. A recent Qualtrics study commissioned by SAP found that the vast majority of Italian and Spanish consumers choose their utility company based on their environmental and social policies. And investors are actively bypassing companies that fall short on their ‘green’ credentials: Assets in dedicated sustainable investment strategies have more than doubled in the last five years, reaching $1.3 trillion in June 2020.
At SAP, we don’t see this as a threat. On the contrary, we see sustainability offering incredible opportunities.
Right now, we have the chance to reshape the way we make business decisions by embedding economic, social and environmental impacts within our daily operations and supply chain planning; to embed sustainability as a new dimension of success into our analytical and transactional applications; to measure our success not only on traditional financial KPIs, but also sustainability metrics like CO2e footprint, energy and water consumption, and land usage.
For many companies, this represents a sea-change in the way they do business. Thankfully, digital technologies make it easier than ever to make the changes necessary to manage their organisations not only by top line and bottom-line financial measures, but also their green line. Of course, it helps that we have a convenient measurable performance unit, in the form of CO2, to drive and track performance at a global, national, and industrial levels.
A report by GeSi, the Global eSustainability Initiative, suggests that technology has the potential to reduce global carbon emissions by 20% by 2030, hold emissions at 2015 levels and effectively decouple economic growth from emissions growth. In other words: you don’t have to pollute to thrive financially.
As a result, growing numbers of our customers are using software and actual data to embed sustainability impact directly into their raw material procurement, production execution and transportation planning processes. Where sustainability reporting used to be the job of a separate sustainability team, carbon emission planning and sustainable resource planning are rapidly becoming the responsibility of purchasers and supply chain planners.
The movement is gathering momentum. In Ghana, a ground-breaking pilot project between the World Economic Forum (WEF), the Global Plastic Action Partnership (GPAP) and SAP is increasing visibility within the plastics supply chain with the hope of benefiting people, companies and the environment. Ghana generates an estimated 1.1 million tons of plastic waste every year, with only 5% collected for recycling. The project, which involves more than 2 000 Ghanaian waste pickers, allows civic-minded companies to pay a premium for socially responsible plastics and provides waste pickers with the opportunity to earn fairer wages. Policy-makers can also use the data to determine optimal locations for recycling facilities.
At SAP, we recently announced our intention to become carbon-neutral in our own operations by the end of 2023 – two years earlier than previously stated. Covid-19 certainly helped, dramatically reducing our greenhouse gas emissions by changing the way our 100,000 employees work and travel during the pandemic. With employees working predominantly from home, carbon emissions caused by the daily commute and the operation of office buildings fell. As a result, SAP was able to overachieve by 43% on its target for reducing net carbon emissions in 2020, generating 135 kilotons (kt) instead of the anticipated 238 kt.
While our zero-carbon goal applies chiefly to our own operations, SAP’s science-based climate target also encompasses the upstream and downstream value chain. We’ve been using 100% renewable energy to power all our data centres since 2014, and thanks to our green cloud, we offer customers cloud solutions that are carbon-neutral.
But perhaps our greatest strength lies in our ability to help our more than 400,000 customers worldwide implement climate protection measures through offerings such as the Climate 21 program. Together with our customers and partners, we will provide more information on solutions in this context as well as on the circular economy, holistic steering and reporting at the virtual SAP Sustainability Summit on April 28-29, 2021.
When it comes to environmental responsibility, we’re in the decade of delivery. The time to act is now.
This article is the second of a three-part series exploring the economic, environmental and societal responsibilities of sustainable businesses in a post-pandemic economy.