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SAP sustainability report invites skepticism

by Scott Priest, Editorial Director

March 27, 2012

It hasn't been hard to find positive news about SAP over the last 12 months. Its financial performance continues to soar, its new products continue to impress, and, by comparison, its competitors often seem to be chasing them.

So I expected a bit more when, last week, SAP released its 2011 sustainability report. The press release in that link couches everything in a positive light, and many of the points are indeed positive, but it's a confusing announcement.

As points out, SAP's carbon emissions rose along with its revenues:

But unlike in 2010, the company was not able to continue decoupling revenue growth from its emissions during 2011, the company's latest sustainability report shows. SAP's absolute emissions rose 7.4 percent in 2011, which also saw a 25 percent increase in revenue, whereas emissions fell 5.7 percent in 2010 despite a 17 percent rise in revenue.

SAP initially passed off its growth in emissions as due to the acquisition of Sybase, though that same article notes t hat SAP later admitted that when numbers were adjusted, the rise couldn't be blamed on Sybase.

SAP has consistently been a leader in promoting sustainability over recent years, and this turn doesn't necessarily bother me, because they grew by leaps and bounds last year. What I find interesting, though, is the way the announcement includes elements that seems completely irrelevant toward the goals of sustainability:

Highlights how SAP increased employee engagement by nine percent in just one year.

Introduces a global target to increase the ratio of women in management positions to 25 percent by 2017.

Now, basically everyone approves of employee engagement and of a diverse workforce. There's no argument against either.

But what do they have to do with sustainability?

To me, sustainability is about one of two things (and ideally both): the sustainability of the company seen through better efficiency and steady, achieveable growth, and the green side of sustainability -- sustainability in relation to the Earth.

So these two points seem out of place to me in such a report. Even if you could measure employee engagement (and I'd argue that number is very difficult to attribute to anything tangible), it has little to do with the sustainability of the company. You'd have to do a pretty serious Six Degrees of Separation type of analysis whereby employee engagement leads to better productivity which then leads to better work which then leads to better performance. That's a stretch. You could just as easily make the argument that employee engagement leads to short-term rises in productivity and long-term rises in ability, which then allow the employee to m ove on to another job elsewhere.

The second point is merely a marketing and HR achievement -- setting a goal to hire or track a certain number of individuals toward certain positions by a certain date. It has no direct correlation to sustainability, and seems out of place. Just like employee engagement, it's a great thing to aim for, and it's something that should be promoted. Just not here.

SAP's sustainability track record is generally admirable, but by muddying it with unrelated accomplishments, the company invites skepticism. And it also risks making people lose track of the most basic, core elements of sustainability by including too broad a mix of achievements.

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