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You've Chosen Sustainability — Now What?

by Neil Krefsky and John Garrish | SAPinsider

April 1, 2010

Our new series of sustainability columns opens with a pressing question: How do you manage the seemingly circuitous path to sustainability? SAP executives offer a three-pronged strategy for managing your sustainability initiative — and improving your business — using SAP BusinessObjects Sustainability Performance Management.
 

The focus of corporate sustainability has changed dramatically in the past few years. Companies no longer need to be convinced that sustainability is a worthy endeavor — they made that discovery years ago. The emphasis now is on how to implement and manage initiatives that move your company toward its goals of realizing social and environmental sustainability while increasing profitability. But many companies are finding it harder than anticipated to manage their sustainability initiatives and successfully acheive their strategic objectives.

Your Sustainability Path: Where to Begin?

Unlike established processes such as purchasing or sales, sustainability initiatives are not as mature.  Many companies do not have processes in place for aligning their sustainability initiatives with how they do business, for tracking their progress against their objectives, or for capturing, collecting, analyzing, and disclosing data related to their sustainability strategies. 

Say that you’re an executive at a manufacturing company that ships potentially hazardous materials globally. You may need to collect anywhere from 70 to 300 metrics — including resources consumed, incidents and accidents incurred, and waste generated — from each of hundreds of operating sites to ensure that you’re meeting your corporate or local compliance goals and tracking your achievement relative to corporate-sponsored ini tiatives. Without a central management application, your sustainability or environment, health, and safety (EH&S) team may spend as much as 70% of its time, or more, wading through data that is captured across various systems, spreadsheets, and filing cabinets, struggling to consolidate the data in a way that’s relevant to sustainability KPIs.

This labor-intensive process must be repeated every time your company has to report on its sustainability efforts, taking the sustainability or EH&S office even farther afield from its core mission. It also exposes you to errors in reported information, thus increasing the risk and decreasing the reliability of what’s disclosed to stakeholders. Even worse, you’re unable to align your sustainability initiatives with your company’s strategic goals. For these reasons, the path to sustainability often feels more like a meandering circle than a straight line.

To help customers straighten this path, the SAP BusinessObjects Sustainability Performance Management application (see sidebar) enables companies to achieve their strategic objectives, curb risk, and reduce the cost and complexity of their efforts with a three-pronged approach to effective sustainability performance management (see Figure 1).

Figure 1

Three outcomes of an effective sustainability performance management solution

1. Align Sustainability with the Business

Managing a sustainable business requires more than funding a central team to execute one-off initiatives. It requires continuously cooperating with all core functions and ensuring that sustainability goals align with overall business objectives. After all, material or process savings only get captured if the VP of Manufacturing knows where to implement them. Likewise, employee and societal benefits are only realized if the HR or line-of-business manager ascribes to them.

Combining performance analytics with the master data and business processes that the rest of the business runs on allows you to align sustainability performance with financial, HR, manu­facturing, procurement, and other operational areas. To do that, you’ll need to draw on a central repository of integrated dat a and drill down quickly into that data to put it in a business-relevant context. 

Ease of use is another requirement for analytics tools, since sustainability professionals are typically high-level managers with little technical background. SAP BusinessObjects Sustainability Performance Management provides an interface that is entirely drag-and-drop; most users will require no training.

2. Make Disclosures Reliable and Repeatable

Imagine you’re an executive at a chemicals company. You’ve just spent the better part of 10 months tracking down all the data points you need to prove to shareholders and the public that your commitment to environmental sustainability is more than just good PR or regulatory compliance. You create a detailed report on your findings and release it publicly. Your CEO’s signature is front and center on the report, creating the expectation that it has been highly scrutinized. And next year, you have to do it all over again — and this time produce not one, but 10 separate reports to satisfy customer and shareholder requests. 

As the proliferation of sustainability reports increases, you need a system to help you manage multiple reporting frameworks, schedules, and ever-changing KPIs. SAP BusinessObjects Sustainability Performance Management includes the tools you need to create flexible, repeatable disclosures — including a central KPI library based on the Global Reporting Initiative (GRI) standard — plus the capability to concurrently manage other standards, frameworks, reporting deadlines, and requirements.

3. Get the Right Data (and Get the Data Right)

For any sustainability initiative to succeed, the collection of data related to that initiative must be automated. You must establish a guided, repeatable, auditable process for data collection (and a central repository to store it in), eliminating the need for random emails, phone calls, and spreadsheets.

It is also important to integrate sustainability data with business data from other areas, such as financials, HR, manufacturing, and procurement. Integration is key to aligning your sustainability initiatives with business goals. For example, a customer may already use the SAP Environment, Health, and Safety Management (SAP EHS Management) application to track workplace safety, incidents, and accidents. With effective sustainability performance management, the customer can combine data from SAP EHS Management and SAP ERP Human Capital Management (SAP ERP HCM), enabling one source for all workplace safety-related data.

To capture all necessary data, you may need to draw from sources outside of SAP or create data that has never been tracked previously — the amount of water your plant draws from a lake, for example. SAP BusinessObjects Sustainability Performance Management allows you to establish roles, workflow, and approval processes that help capture that data, regardless of its source, in a repeatable, measurable way.

If you’re finding that you can’t use all of this sustainability data to improve your business, you definitely need a management system.

Next Steps: How to Assess Your Need

Start tallying all of the sustainability metrics you manage today. Count the disclosures you are required to produce. Add up all the time spent gathering, analyzing, reporting on, and managing sustainability data. If the result is a monetary figure you’re not happy with, you’ll need to implement an effective sustainability performance management solution.

More importantly, if you find that you can’t use all of this sustainability data to improve your business, you definitely need a management system. SAP provides a management system that can not only lower reporting costs, but enable companies to turn data into actionable insight that can be cascaded and executed on throughout the enterprise. With all of your operations in a single repository, you’ll have constant access to the information you need to live up to your sustainability promises. 

Neil Krefsky (neil.krefsky@sap.com) is the marketing director for SAP BusinessObjects Sustainability Performance Management. Neil joined SAP in 1998 and has worked in several roles in business development, pre-sales, and marketing. During his tenure at SAP, he has gained deep product expertise and helped SAP customers with performance management, risk and compliance, and financial applications.

John Garrish (john.garrish@sap.com) is the Vice President of Solution Management for SAP BusinessObjects Sustainability Performance Management. John joined SAP from Oracle and previously led product management and marketing teams for enterprise solutions in customer relationship management (CRM) and the public sector. John has an undergraduate degree in political science from the University of California at Berkeley and an MBA from the University of Michigan.

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