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SAP Argues Business Case of Integrated Reporting

Software firm SAP is using its combined sustainability and annual report to promote more deeply embedded sustainability in its business operations, according to Dr. Peter Graf, the company’s chief sustainability officer and executive vice president sustainability.

The core of the company’s integrated report is how SAP’s non-financial performance, including its carbon footprint and energy consumption, affects its financial performance, Graf told SiliconAngle. For example SAP‘s report shows how much money has been spent on each energy unit or how much has been saved by each percentage reduction in energy use.

Highlighting such connections makes “sustainability relevant for the business,” Graf says. It also allows a company such as SAP — which sells products that other businesses use — to pass those business advantages on to its customers, Graf told the website.

Keeping an eye on sustainability can also keep consumers buying your products, Graf says. He uses examples of exploding oil rigs or companies using child labor, and their subsequent abandonment by customers, to show how “punishment from the consumers is real.” This phenomenon shows why so many companies that are close to their customers are paragons of sustainability, according to Graf.

“Sustainability is not so much about doing the right thing for society or the planet, it’s about understanding where economic interests and environmental and social interests overlap…it’s about business at the end of the day,” Graf says.

SAP launched its first Integrated Annual Report in March.

Just seven companies in the S&P 500 — just 1.4 percent of the total — have fully integrated annual financial and sustainability reports, according to a study from the IRRC Institute and the Sustainable Investments Institute released in April. American Electric Power, Clorox, Dow Chemical, Eaton, Ingersoll Rand, Pfizer and Southwest Airlines all use the Global Reporting Initiative guidelines as a reference or otherwise complied with one of GRI’s most recent reporting frameworks, according to the report.

Do you use integrated reporting at your firm? Or do you plan to introduce a combined sustainability and financial report in the near future? Please tell us you opinions on the reporting approach in the comments section below.

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One thought on “SAP Argues Business Case of Integrated Reporting

  1. We need more of this kind of pragmatic thinking and language in our profession and discipline of Sustainability. Kudos to Dr. Graf. If we’re going to accomplish the environmental,social, economic and governance objectives we share in this space, it’s pretty clear by now that will come through the commercial/industrial sector. And to engage, persuade, and motivate leaders of corporations we have to talk the language of business, not morals. What is “right” to most business leaders, agree or not, is to create wealth for owners/shareholders. So those of us practicing Sustainability need to align on our language and communication to address that reality. The first thing we need to do is establish that our discipline and practice is called “Sustainability”… not CR,not CSR, not EHS, not Restorative Enterprise, and all the other titles and references we see in almost every piece written and words spoken these days. No wonder those of us not in the choir, particularly C-levels, are confused about what we do. We can’t even agree on what to call ourselves. Literally, there’s a reason why business has aligned on names for decades old functions. Finance doesn’t go by names other than Finance. Same for Accounting, Marketing, Sales, Operations, etc. The first thing our profession should do is work to establish Sustainability as every bit as legitimate as those functions in business practice and business language. We are Sustainability professionals practicing sustainable development through economic, environmental, social and governance platforms, as Dr. Graf’slanguage captured so succinctly. Language IS important. We need to move beyond the moralistic and value-subjective language of “the right thing to do” and “responsiblity” and simply draw the line in the sand on “Sustainability” and build our language around that fundamental foundation. It’s long overdue and will benefit our work tremendously.

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