SAP Report Confirms Decoupling of Emissions and Revenue

SAP appears to be succeeding at something many companies aspire to do: reducing its greenhouse gas emissions while increasing its revenue.

In its latest sustainability report, the business software company details how its efforts to reduce its carbon footprint are paying off, including boosting green power to nearly half of its electricity use, nudging its employees toward low-carbon commuting and investing in videoconferencing technologies. At the same time, business is booming.

"What is noteworthy is that 2010 is an amazing year because we have for the first time really decoupled emissions from revenue," said Peter Graf, SAP's chief sustainability officer. "In other words, we had a record year in terms of revenue and revenue growth, while at the same time reduced carbon significantly. In the past, it was more like revenues goes down, carbon goes down, revenues goes up, carbon goes up."

The company's 2010 Sustainability Report confirmed the trend that emerged when SAP reported its quarterly emissions in January. SAP began experimenting with quarterly reporting last year, in large part the result of using its Carbon Impact OnDemand software to measure and track performance.

During a preview of the company's 2010 Sustainability Report Wednesday, Graf explained how SAP is moving toward its 2020 goal of lowering emissions to 2000 levels. The company estimates it will need to reduce emissions 5 percent annually to meet its 2020 goal (see inverted graph above). SAP outperformed this annual target in 2010, with a 6 percent drop in absolute emissions. Revenues increased 17 percent.

In 2010, SAP shaved energy consumption by 9 percent. The company also made gains with getting employees to choose more efficient commuting modes, such as mass transit or carpooling, leading emissions in this area to drop by 14 percent. The company's most impactful effort to reduce emissions involved buying more renewable energy. Green power accounts for 48 percent of SAP's electricity use, with about 35 percent coming from hydro sources, 10 percent from wind, and the rest coming from nuclear and other renewable sources. Its Palo Alto offices are completely powered by renewable energy, including an on-site solar installation.

Moving forward, the company will try to scale the energy efficiency gains achieved in some locations, in addition to increasing investment in green power and videoconferencing. SAP also has 28 Cisco Telepresence systems, which have gained popularity in the U.S. in particular. The videoconferencing component will play a key role in curbing business travel, one of the company's top opportunities to reduce emissions.

"Business flights, for example, remain the single largest contributor to our footprint, and went up in 2010, from 111 kilotons to 148," the report said. "This increase undoubtedly reflects the rebound in the global economy; as our overall emissions decrease shows, however, we believe it is possible to reduce our footprint while enjoying significant business growth. In fact, while our emissions from business flights went up in 2010, they were still lower than they were during their peak in 2007."

For the first time, SAP released its Sustainability Report as part of a larger integrated report linked to its financials. The report itself was also redesigned to be easily read on tablets in a nod to the rise of mobile computing. The content can also be shared on several social media platforms, including Facebook and Twitter.

Interaction is a key theme of the new report aimed at sparking a dialogue with readers and stakeholders. The report includes a materiality matrix that allows readers to choose topics that are most important to them. Readers can leave comments on best practices and share how they are driving cultural change in their own workplaces.

"(There's) a lot of interactivity for us to gain structured feedback on what people think is important," Graf said, "so that we get a better handle on where we are going with our strategy in the future."