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Hi everyone, welcome to GreenMonk TV.

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My guest on the show today is Peter Graf.

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Peter is SAP's Chief Sustainability Officer.

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Peter, welcome back to the show.

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My guest on the show is Peter Graf again.

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Peter, thanks for coming back.

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We want to talk about the second part of your announcement last week,

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the reduction of carbon.

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Why did SAP decide to target carbon specifically in your announcement?

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That has to do with the industry in which we are in.

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We don't run big production plants, we're not consuming a lot of water,

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we're not using a lot of land or other things.

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So for us, really, it's the carbon footprint that carries most of the weight

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and that's where SAP sees a responsibility to improve itself to a large degree.

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We set out a carbon target, which is to reduce our own footprint by 51% until the year 2020,

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and that brings us back to the level of the year 2000 of our emissions.

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Okay, and how are you measuring that?

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Well, obviously, the first round is a lot of handwork and calling people up,

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you know, what does your meter say and, you know, compare that to the beginning of the year.

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We're now deploying our sustainability performance management solution to actually start measuring that

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and we'll show that at Sapphire to customers as well, so it's going to be interesting to see.

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Many people ask me, is this an aggressive target?

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You're talking about cutting it in half compared to 2000.

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We hear other companies talk about going back to 1990 levels, and why is that?

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And the answer is relatively simple.

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SAP has seen incredible growth between the year 2000 and 2008.

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In the year 2000, we were around about 20,000 employees.

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Today, we're around about 50,000, so there's an incredible increase in people.

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And bringing and driving that back down is an aggressive target,

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and that's why we think it's an ambitious goal to achieve.

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Okay, and how are you going about reducing the carbon footprint?

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First of all, by analyzing the carbon footprint throughout the three scopes.

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Scope one is carbon footprint caused by our own assets.

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We have a big fleet of company cars in Germany, for example, or heating cars,

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where we burn fuel to heat up buildings.

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That's scope one, and we are not going to offset any of that,

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so we're not going to buy ourselves out of the responsibility to reduce these numbers.

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This is purely through changing behavior of our employees

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and changing our internal operations.

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The second scope is electricity, which is energy we buy

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to actually drive our data center and so forth.

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That's about 21% of our footprint.

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And again, we're here cranking up the percentage of renewable energy we use.

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Again, we're not allowing any offsets here.

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This is only abatement.

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On the third scope, which is carbon created by service providers

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that deliver a service to SAP, for example, an airline,

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that's where we also have aggressive abatement targets,

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but then actually go about offsetting the rest.

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So we want to be carbon neutral in scope three.

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We've done some amazing work to achieve that.

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It's a lot about behavioral change within our employee base,

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and we're not just going there about just cutting travel budgets, for example.

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We're offering alternative solutions.

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So we are heavily investing in telepresence.

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So we really have built a lot of telepresence capacity within SAP,

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and this investment is still ongoing.

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We've also invested in an event platform that allows us to run events on the Internet,

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like a real conference with a keynote theater and an exhibition hall and breakout sessions.

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And we have avoided 22,000 people getting on the plane in the last half year by using that platform.

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So we're driving alternative technologies to actually go and reduce carbon.

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And that's the three scopes and, you know, where we actually try to abate and how.

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Okay.

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And is this kind of a top-down effort, or do you have grassroots efforts coming up from beneath as well?

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Is this something that your employees are feeling strongly about?

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Employees feel strongly about it.

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I've run a lot of projects within SAP, and this one also started as a project some months ago.

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And it certainly is easy to recruit people because they have a higher sense of purpose.

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It's not just being the world's leader in enterprise software.

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It's really about doing good while we're doing well as a business.

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And so for me, the way how we're driving this is twofold.

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Some of it comes from the top.

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So if we make a central decision, like we just did in Germany,

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to significantly ramp up the amount of renewable electricity that we buy,

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that's a decision that one man needs to make, which is the CFO.

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Because it's slightly more expensive,

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but we believe it's important to make this investment.

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On the other side, a lot of it is behavioral change that we drive internally.

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So for example, I talked about the company cars that we have in Germany,

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where thousands of cars are actually owned by SAP,

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and employees get a gas car, and they can actually drive as much as they like.

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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,

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but to drive behavioral change.

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The way to do that is to create role models that are respected and willing to speak up,

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to create processes so that people can actually validate how much have I been driving,

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and see that, not just use a credit card and it just disappears somewhere.

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Then also giving people information, how do you drive more effectively.

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And then also giving people rewards and KPIs included in the way how their performance is actually valued.

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And all of these things together, if you do them consistently, we hope to really achieve some behavioral change.

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Okay.

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Do you have grassroots efforts as well?

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We do have grassroots efforts, and they've been around for a long time.

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They usually are regionally focused.

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So in Palo Alto, we have a grassroots effort that's called Worldview,

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where employees come up with the idea to use an online service to find people to commute with,

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so that they would use their fuel consumption.

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They had the idea of throwing away all the paper and the plastic bottles of water

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and have refill stations for metal bottles that we gave to employees.

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In Germany, we have a team called Saplings that drive similar things.

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We have green teams in Asia who have been driving the idea of doing something about social and environmental issues.

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So it's great that these are all coming together.

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We're not killing them.

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We're helping them to align and to see how can we collectively, for example, drive carbon,

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while some of them will be focused more on water as well, like in California.

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Specifically, people also look at water, and in other areas,

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they look at other dimensions of sustainability in addition to the global drive.

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Okay.

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And are you deploying Web2O technologies to enable people to communicate amongst each other about these initiatives?

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Yes.

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We have internal surveys, internal discussion groups, you know, how far are people willing to go,

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and you'd be surprised what kind of ideas they come up with, pretty radical stuff in there.

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But for us, it's very important to tap into those 50,000 brains because they have just phenomenal ideas

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and gives you a great indication also how far people are willing to go and how quickly they're willing to go there.

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Do you see the idea of socializing people's carbon footprint as a way of driving down the footprint?

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Yes.

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Externally, we always talk about 51% as the total number of carbon getting us back from, you know,

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500,000 tons of carbon to an annual emission of about 250,000 tons of carbon.

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So that's the external story.

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Internally, the story looks different.

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We're treating this almost like a campaign where we make it very tangible for people what we want from them.

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So internally, we talk not about our absolute carbon reduction.

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We talk about per employee, we need to come from 10-point something to 9-point something in 2009,

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and here are the things you can do.

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At the same time, we launched a call and request for sustainability champions on March 2 inside the business,

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and we wanted to get to 100 at the end of March.

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Within two days, we were at 200.

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So people who volunteer to spread the news within the business,

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to be the ones that can be asked if there is any question,

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to bring back all the experience and discuss best practices in a group of champions,

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and then, you know, take it back out into this global operation of 50,000 people.

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Great. Super.

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Peter, thanks a million for coming on the show.

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Thank you.