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New SAP App Targets Sustainability as Strategic Advantage

Module captures and discloses data on environmental, economic and social impacts. Goal is improving performance as well as meeting compliance demands.
What are our greenhouse gas emission levels? What percentage of virgin materials do we use versus recycled materials? And what are our investments in the local community? Most companies don't encounter such questions as a matter of legal or regulatory requirements -- at least not yet, anyway. But the answers to such questions are already of keen interest to customers, business partners and investors.

"Notable companies like Wal-Mart, Tesco and Dell have sustainability indexes, and if you want to be part of a stock market index like the NASDAQ Sustainability Index or the Dow Jones Sustainability Index, you'll face another set of disclosures," says Charles Zedlewski, SAP's senior director of sustainability solution management.

To help companies meet myrian disclosure requirements with accuracy, efficiency and confidence, SAP last week released a sustainability application designed to capture and report data on environmental, economic and social impacts. It's no coincidence that the SAP BusinessObjects Sustainability Performance Management Application is being released just as United Nations talks on climate change are underway in Copenhagen. Greenhouse gas emissions are just one of the myriad data points captured in the application's central library of key performance indicators. Others include VOC emissions and liquid effluence data, use of water and raw materials, and spills and waste data. On the human resources front the application reports on safety, work time lost due to accidents, hours invested in training, turnover and pay equity. The app also catalogs economic impacts such as local community investment and purchasing of local content.

The application's depth and breadth of reporting have helped make it one of the first tools to be certified by the Global Reporting Initiative (GRI), which publishes a widely used sustainability reporting framework. But a key premise of the module is that it creates a single data resource and system that can help automate and streamline a range of reporting tasks rather than satisfying just one set of requirements.

"Customers don't have a lot of this data today and there are few systems of record for sustainability information," Zedlewski says. "The backbone of this application is a data-collection-and-calculation engine that captures data from people and systems and then runs it on a master schedule. The engine continuously updates the schedule and runs all the jobs necessary to capture required data and satisfy various disclosure requirements."

The application is said to be as much about improving performance as it is about meeting governance and compliance requirements.

"Whether you are talking about consumption of virgin materials or water or energy, these tend to be significant components of the operating cost of a business," Zelewski says. "If you can find ways to reduce consumption of these scare resources, then you're not only helping the environment, you're helping the company's margins."

Performance benefits are raising the profile of sustainability initiatives, according to Dr. Stephen Stokes, vice president of Sustainability and Green Technologies, AMR Research. "Sustainability is becoming a key element of business strategy, with the potential to deliver new levels of efficiency and operational performance, innovation and organizational transformation," Stokes says.

SAP's new application is designed to integrate with existing SAP products, including SAP ERP and SAP Business Suite Software; the SAP Environment, Health, and Safety Management Application; and the SAP Carbon Impact on-demand application. It's also said to be suitable for stand-alone deployment and integration with non-SAP systems. The application started shipping last week and is said to have been deployed by four companies, including SAP itself and by printer manufacturer Lexmark, which served as a partner on the software's development.

"The application will help us streamline how we monitor and manage our sustainability performance and reduce the cost and complexity of our many sustainability disclosure obligations," states John Gagel, manager, sustainable practices at Lexmark. "Most importantly, it will enable us to move beyond measuring and reporting to incorporating sustainability in a more strategic way within our business."

The cost of the software was not disclosed.