Beyond Socially Conscious Investing: How Integrated Reporting is Helping Sustainability Go Mainstream
Dr. Peter Graf, Chief Sustainability Officer and Executive Vice President, SAP AG and Dr. Christoph Huetten, Chief Accounting Officer and Sr. Vice President, SAP AG
Original article on Green Money
When SAP first began talking about the importance of sustainability to our business, some people – even inside our own company – were confused. What does SAP, one of the world’s leaders in enterprise software, have to do with sustainability? We are not a manufacturer, so we are not a big polluter and have a small carbon footprint compared to other large companies. We do not consume large amounts of natural resources such as timber or water. In fact, we operate in an industry that – for these reasons – has ignored sustainability challenges for a long time.
We decided that our approach had to include consideration not only of short-term but also long-term success. As a result, some of the non-financial indicators we focused on were not what many expected. They included employee engagement and customer satisfaction – measurements that seemed far removed from the usual environmental definition of sustainability.
But for SAP, our long-term success depends on our ability to innovate. Indicators such as employee engagement are more strongly connected to our core value creation as a software company than our own energy consumption and related carbon footprint. Engaged employees create better software. This is why our executive compensation takes into account how effectively leaders engage their teams. Our sustainability as a company depends on their ability to do so.
Such an approach – which led to the creation of our first Integrated Report (www.sapintegratedreport.com/2012/en ) this year – speaks to a maturing of the sustainability field that is highly relevant both to companies and the investors who bet on their prospects for success. As its name suggests, an integrated report merges financial and non-financial results – everything from revenue and margin to carbon reduction and social investments – into one cohesive document. More important, a truly integrated report looks at the connections and interdependencies between the two categories of performance measurement.
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