Lead by example: SAP sets sustainability pledge; enhances environmental software

By Roberto Michel, senior contributing editor March 2, 2009

Enterprise software vendor SAP made a two-pronged sustainability announcement March 2, announcing goals for its own operations; and enhancements for the environmental, health and safety (EHS) management solutions it sells to customers.

For internal goals, SAP announced it will reduce its greenhouse gas (GHG) emissions down to its year-2000 levels by the year 2020. According to SAP, this would entail a 51-percent reduction in its total GHG emissions from its year 2007-published baseline levels. SAP initiated its first global GHG inventory in 2008 and will report performance and progress toward the target in its annual sustainability report.

“SAP is in a unique, dual position when it comes to sustainability,” says Leo Apotheker, co-CEO, SAP AG. “We have a moral obligation to start with ourselves and ensure that our business operates in a transparent and accountable manner, leaves a minimal environmental footprint and reaches out to improve the social situation of others. As the leader in business software, we also deliver solutions that help other businesses achieve clarity across their operations and better manage their sustainability performance.”

On the software front, SAP and TechniData AG , a software firm SAP has partnered with since 1995 around EHS software, announced an agreement to expand their existing relationship. As a result, SAP will own and sell a full line of co-created EHS applications to be offered under a single name: SAP Environment, Health, and Safety Management (SAP EHS Management).

SAP Co-CEO Leo Apotheker says SAP has a moral obligation to lead by example on sustainability goals.

The application is aimed at ensuring that EHS requirements and corporate sustainability policies are met proactively across business operations. SAP EHS Management is open to work with non-SAP solutions, yet is integrated into SAP’s Business Suite.

In an interview with Manufacturing Business Technology , Marty Etzel, VP of process industries with SAP, said that TechniData will focus on working with SAP on developing EHS software and content, but that SAP will take the lead in customer interactions. “SAP is taking the lead on communication and working with customers,” says Etzel. “We wanted to get rid of some of grey areas on who is doing what.”

The EHS solution addresses health and safety issues, and in the last several years, more functionality has been added around environmental compliance, such as functionality that helps companies comply with European regulations on chemicals—specifically the Registration, Evaluation, Authorization, and Restriction of Chemicals ( REACH ) rule. Etzel said that in the U.S.—with the Obama Administration pushing for cap and trade regulations—there will be a greater need in industry to closely monitor GHG emissions, and ideally, put in place software for efficient compliance.

“The first thing you need to understand [to get ready for cap & trade] is: Where are you today? says Etzel. “Can you watch status against all your permits and forecast emissions? Can you link to alerts from plant-control systems to know when they are approaching permit limits? The environmental compliance capabilities within EHS Management allow you to

Etzel and Sami Muneer, a senior director of emerging solutions for SAP, said new capabilities in EHS Management will be part of the two annual “enhancement packs” that SAP releases to its business suite customers. Among the new EHS capabilities, says Muneer, is greater reporting flexibility, and more flexibility in configuring roles, permissions, and fields.

The enhancements, says Muneer, include a greater ability to use third-party business intelligence (BI) tools, as well as automatically generate reports in BI reporting tools such as Crystal or Xcelsius—two popular tools from SAP’s Business Objects acquisition. The added flexibility with user-defined fields, permissions, and roles will help companies comply with multiple regulations and compliance mandates that use the same environmental data. Some mandates, notes Muneer, may be tied to industry association goals, or mandates from supply chain partners, rather than regulations.

Etzel notes that under SAP’s EHS software, users get not only a means to collect and visualize environmental data centrally, but the type of workflow, alerting, and BI tools needed to optimize the processes involved in compliance. “A database is just data,” says Etzel. “What we support is a business process.”

SAP is using its own software to monitor and manage its sustainability targets, and will focus on abatement measures rather than offsets. The company also formed a new cross-functional sustainability organization to coordinate its sustainability efforts. It is led by Peter Graf, SAP’s first chief sustainability officer and executive VP of Sustainability Solutions, who will report directly to SAP Executive Board member Jim Hagemann Snabe.