Source: IPCC, Climateworks, Press Clippings

Climate change is a top priority. Companies are required to act due to:

• Regulation. In several countries, specific industries must disclose greenhouse gas (GHG) emissions due to new regional cap-and-trade systems. Under the European Union Emission Trading Scheme several industries are already making transparent their emissions. Regulations will likely expand to new industries and will become increasingly rigid and comprehensive.
• Cost Pressure. After nearly two decades, companies now realize that “eco-efficiency” (a term coined by the World Business Council for Sustainable Development in 1992) brings savings. Businesses will focus on reducing GHG and on improving highly correlated energy management with the aim of reducing current costs and avoiding anticipated future costs, including the impact of cap-and-trade systems.
• Sustainability as a Business Opportunity. “For us, sustainability is first and foremost a business opportunity” was the statement of a leading global high-tech vendor in a 2008 SAP survey. The view is consistent with companies that now see “green”–especially low carbon–products as an opportunity to create competitive differentiation.
• Business Model at Stake. For many industries, reducing greenhouse gasses will not only be a matter of regulation or cost, but is also critical to the survival of the business model. For example, the logistics sector accounts for 14 percent of global GHG emissions. The industry will likely fall under regulation in the short-term, and customers will soon ask specifically for “carbon neutral” services.
• Reputation and Anticipated Pressure from Customers. Customers are increasingly interested in the environmental performance of companies and are leveraging greater connectivity to put pressure on the retail and consumer goods industries. Some companies are already creating transparency on product-related emissions and engaging suppliers to improve their carbon posture.

Source: Netherlands Environmental Assessment Agency

At SAP, we believe that software can directly and dramatically impact climate change.

While the information and communication technology (ICT) industry can provide some important answers to the climate challenge, undoubtedly the industry is also part of the problem. In fact, according to a study by McKinsey and Company, the ICT industry accounts for approximately 2 percent of the global carbon footprint, an amount equivalent to the footprint of the entire airline industry. The ICT industry’s carbon emissions are anticipated to accelerate to over 3 percent of the global carbon footprint by 2020. SAP is working with customers and partners to both systematically reduce its own carbon emissions and to lower the energy required to operate SAP systems in data centers.

SAP also recognizes that its products and services can help achieve significant efficiencies for the remaining 98 percent of the global carbon footprint–emissions produced by all other industries combined. For SAP, this represents not only an opportunity but a business responsibility. One recent study estimated that the information and communications technology industry can help reduce total global emissions by 15 percent by 2020. ¹SAP will co-innovate with its customer base to develop solutions leading to lower carbon emissions.

¹The Climate Group’s SMART 2020 report, researched by McKinsey and Company.

SAP’s goal is to reduce total greenhouse gas emissions to year-2000 levels by 2020. This equates to lowering emissions by more than 250 kilotons from 2007 levels of 504 kilotons. In 2000, SAP was a much smaller company (with approximately 24,500 employees compared to approximately 50,000 today), so this is an ambitious goal.

Our reduction plans are based on aggressive abatement targets. In 2009, we are engaging in several actions to meet our goals:

• 5 percent reduction in business flights, made possible by increased use of online meeting platforms and investing in high-quality video conferencing, reducing carbon emissions by about 8,300 tons
• 5 percent less electricity consumption in office buildings, reducing carbon emissions by about 3,500 tons
• 2.5 percent fuel reduction in company cars, achieved by adjusting the corporate car policy, reducing carbon emissions by about 2,100 tons
• 3 percent reduction of data center carbon emissions, enabled by a 60 percent virtualization rate of all new servers, reducing carbon emissions by about 1,300 tons
• 20 percent reduction in paper, achieved by leveraging double-sided printing and through other measures such as decreasing overall paper usage by employees and for packaging and marketing, reducing carbon emissions by about 530 tons

We welcome your input on our carbon emissions targets and initiatives. Please join the carbon conversation.

SAP provides environmental performance solutions that help us, and our customers, to:

• Collect, analyze, monitor, and report emissions and pollutants data to create a complete accounting of corporate environmental impact
• Implement and manage corporate environmental control policies, management systems, and compliance procedures
• Develop a complete accounting of direct and indirect corporate carbon emissions not only for the firm but throughout the supply and distribution networks

Find more information about SAP sustainability solutions: http://www.sap.com/solutions/sustainability/offerings/index.epx