Hi everyone, welcome to GreenMonk TV. My guest on the show today is Peter Graf. Peter is SAP's Chief Sustainability Officer. Peter, welcome back to the show. My guest on the show is Peter Graf again. Peter, thanks for coming back. We want to talk about the second part of your announcement last week, the reduction of carbon. Why did SAP decide to target carbon specifically in your announcement? That has to do with the industry in which we are in. We don't run big production plants, we're not consuming a lot of water, we're not using a lot of land or other things. So for us, really, it's the carbon footprint that carries most of the weight and that's where SAP sees a responsibility to improve itself to a large degree. We set out a carbon target, which is to reduce our own footprint by 51% until the year 2020, and that brings us back to the level of the year 2000 of our emissions. Okay, and how are you measuring that? Well, obviously, the first round is a lot of handwork and calling people up, you know, what does your meter say and, you know, compare that to the beginning of the year. We're now deploying our sustainability performance management solution to actually start measuring that and we'll show that at Sapphire to customers as well, so it's going to be interesting to see. Many people ask me, is this an aggressive target? You're talking about cutting it in half compared to 2000. We hear other companies talk about going back to 1990 levels, and why is that? And the answer is relatively simple. SAP has seen incredible growth between the year 2000 and 2008. In the year 2000, we were around about 20,000 employees. Today, we're around about 50,000, so there's an incredible increase in people. And bringing and driving that back down is an aggressive target, and that's why we think it's an ambitious goal to achieve.
2:02Okay, and how are you going about reducing the carbon footprint? First of all, by analyzing the carbon footprint throughout the three scopes. Scope one is carbon footprint caused by our own assets. We have a big fleet of company cars in Germany, for example, or heating cars, where we burn fuel to heat up buildings. That's scope one, and we are not going to offset any of that, so we're not going to buy ourselves out of the responsibility to reduce these numbers. This is purely through changing behavior of our employees and changing our internal operations. The second scope is electricity, which is energy we buy to actually drive our data center and so forth. That's about 21% of our footprint. And again, we're here cranking up the percentage of renewable energy we use. Again, we're not allowing any offsets here. This is only abatement. On the third scope, which is carbon created by service providers that deliver a service to SAP, for example, an airline, that's where we also have aggressive abatement targets, but then actually go about offsetting the rest. So we want to be carbon neutral in scope three. We've done some amazing work to achieve that. It's a lot about behavioral change within our employee base, and we're not just going there about just cutting travel budgets, for example. We're offering alternative solutions. So we are heavily investing in telepresence. So we really have built a lot of telepresence capacity within SAP, and this investment is still ongoing. We've also invested in an event platform that allows us to run events on the Internet, like a real conference with a keynote theater and an exhibition hall and breakout sessions. And we have avoided 22,000 people getting on the plane in the last half year by using that platform. So we're driving alternative technologies to actually go and reduce carbon. And that's the three scopes and, you know, where we actually try to abate and how.
4:03Okay. And is this kind of a top-down effort, or do you have grassroots efforts coming up from beneath as well? Is this something that your employees are feeling strongly about? Employees feel strongly about it. I've run a lot of projects within SAP, and this one also started as a project some months ago. And it certainly is easy to recruit people because they have a higher sense of purpose. It's not just being the world's leader in enterprise software. It's really about doing good while we're doing well as a business. And so for me, the way how we're driving this is twofold. Some of it comes from the top. So if we make a central decision, like we just did in Germany, to significantly ramp up the amount of renewable electricity that we buy, that's a decision that one man needs to make, which is the CFO. Because it's slightly more expensive, but we believe it's important to make this investment. On the other side, a lot of it is behavioral change that we drive internally. So for example, I talked about the company cars that we have in Germany, where thousands of cars are actually owned by SAP, and employees get a gas car, and they can actually drive as much as they like. So for us to commit that in 2009, we're going to reduce the fuel consumption by 2.5% relies on our ability not to order anyone to drive less, but to drive behavioral change. The way to do that is to create role models that are respected and willing to speak up, to create processes so that people can actually validate how much have I been driving, and see that, not just use a credit card and it just disappears somewhere. Then also giving people information, how do you drive more effectively. And then also giving people rewards and KPIs included in the way how their performance is actually valued. And all of these things together, if you do them consistently, we hope to really achieve some behavioral change. Okay. Do you have grassroots efforts as well? We do have grassroots efforts, and they've been around for a long time.
6:04They usually are regionally focused. So in Palo Alto, we have a grassroots effort that's called Worldview, where employees come up with the idea to use an online service to find people to commute with, so that they would use their fuel consumption. They had the idea of throwing away all the paper and the plastic bottles of water and have refill stations for metal bottles that we gave to employees. In Germany, we have a team called Saplings that drive similar things. We have green teams in Asia who have been driving the idea of doing something about social and environmental issues. So it's great that these are all coming together. We're not killing them. We're helping them to align and to see how can we collectively, for example, drive carbon, while some of them will be focused more on water as well, like in California. Specifically, people also look at water, and in other areas, they look at other dimensions of sustainability in addition to the global drive. Okay. And are you deploying Web2O technologies to enable people to communicate amongst each other about these initiatives? Yes. We have internal surveys, internal discussion groups, you know, how far are people willing to go, and you'd be surprised what kind of ideas they come up with, pretty radical stuff in there. But for us, it's very important to tap into those 50,000 brains because they have just phenomenal ideas and gives you a great indication also how far people are willing to go and how quickly they're willing to go there. Do you see the idea of socializing people's carbon footprint as a way of driving down the footprint? Yes. Externally, we always talk about 51% as the total number of carbon getting us back from, you know, 500,000 tons of carbon to an annual emission of about 250,000 tons of carbon. So that's the external story. Internally, the story looks different.
8:05We're treating this almost like a campaign where we make it very tangible for people what we want from them. So internally, we talk not about our absolute carbon reduction. We talk about per employee, we need to come from 10-point something to 9-point something in 2009, and here are the things you can do. At the same time, we launched a call and request for sustainability champions on March 2 inside the business, and we wanted to get to 100 at the end of March. Within two days, we were at 200. So people who volunteer to spread the news within the business, to be the ones that can be asked if there is any question, to bring back all the experience and discuss best practices in a group of champions, and then, you know, take it back out into this global operation of 50,000 people. Great. Super. Peter, thanks a million for coming on the show. Thank you.