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Intelligent Enterprises:

Putting Purpose and Sustainability at the Core of Business

The coronavirus crisis has exposed the many social and economic issues that the world urgently needs to address. Businesses must embrace sustainability and purpose if they’re to help tackle these problems

By Thomas Saueressig, member of the Executive Board of SAP SE, SAP Product Engineering | Tuesday, July 21st, 2020

The COVID-19 pandemic has laid bare some of the most serious issues we face today. The prevalence of racial injustice has been brought to the world’s attention and, at the same time, economic hardship looks likely to widen inequality in countries around the globe. Meanwhile, with governments focused on stemming the spread of COVID-19, one of the biggest challenges of our times – climate change – has faded into the background.

No single entity can solve these issues alone. Businesses, consumers and governments, as well as local and international non-government organisations, must all work together to create solutions. But this will only succeed if businesses play their part by putting sustainability and purpose at the heart of what they do.

This article is the first in a series by SAP exploring opportunities for today’s business executives, technology leaders, entrepreneurs, policymakers, researchers, non-profits and activists to accelerate solutions for a sustainable economy, environment and society. To start, we will examine why tomorrow’s leading organisations must become a generation of intelligent enterprises, whose purpose is not just to be resilient and profitable, but also to be sustainable.

 

A seismic shift

In August 2019, the Business Roundtable, a public policy group composed of 181 US CEOs, took a major step to redefine business purpose. It announced that a company’s purpose should no longer mean delivering profits for shareholders; rather, an organisation’s purpose should bring value to all its stakeholders – from customers to employees to communities – by improving society and promoting economic benefits for all.

This is evidence that we are living through a fundamental shift in consumers’ perception of what businesses can and should do for the world. With over 440,000 customers across more than 180 countries, SAP has a unique insight into that shifting perception. Because of this, we’ve been able to identify two key areas where our customers want to see businesses driving change.

Firstly, customers and other stakeholders want companies to address the immediate needs of the current crisis. This requires not just taking responsibility for their workforce’s safety and wellbeing, but also building resilience across the business and supply chains.

Secondly, stakeholders expect businesses to commit to sustainability. To achieve this, businesses must minimise their environmental impact, enabling responsible production and consumption and helping to create a circular economy. But sustainability isn’t just about climate action. As well as this, businesses must increase diversity and inclusion across their organisation and communities and equip the next generation of workers with the skills needed to take on a more technologically advanced world. These sustainable business practices will help foster an open and fair society with equal opportunities for everyone.

In this new world, profitability and resilience will continue to be core drivers of business growth, but social purpose will come to play an equally important role. The best-run companies of the future will be those that can embody all three principles.

 

Leading by example

At SAP, we see the current crisis as an opportunity to drive meaningful action. This requires tackling the myriad issues that the coronavirus crisis and Black Lives Matter movement have made clear.

For example, in response to the Black Lives Matter, we are increasing our investments in social justice reform. As part of this, we have launched a new programme, “Spotlight Black Businesses,” which provides support to small, Black-owned businesses whose operations have been negatively affected by the pandemic. We have also joined the “Stop Hate for Profit” effort, suspending all paid advertisements across Facebook and Instagram until the company takes sufficient action to confront hate speech on its platforms.

Those are some of the ways we’re helping communities. Driving change inside SAP requires a separate approach, and establishing targets is critical. That’s why we have set a new goal to double our representation of African-American talent in the US over the next three years. We are also determined to advance opportunities for women in management, with the goal of increasing the number of women in leadership roles to 28 percent in 2020 and 30 percent in 2022. As the sponsor for both our Business Women’s Network at SAP and for the Women in Tech initiative, I’m excited for us to involve more women in tech, since it is still – unfortunately – too much a man’s world.

On top of this, we’re boosting our efforts to mitigate climate change. We aim to make all of our operations carbon-neutral by 2025 and are part of the CEO Carbon Neutral Challenge. We have also joined the World Economic Forum’s Global Plastic Action Partnership, which is determined to create a cleaner ocean by 2030, and in 2020 we joined the Ellen MacArthur Foundation network to accelerate the adoption of circular economy practices and processes.

 

Enabling change

With 77 percent of all business transactions revenue worldwide touching an SAP system, we have the scale to make a difference. We must strive, therefore, to become enablers of change across the business ecosystem. We are uniquely positioned to help companies improve industry-specific and supply chain processes, connect through a global network and embed sustainability as a critical measure of business success.

That’s why we’re working across borders and industries to help the world respond to and heal from the consequences of the pandemic. Early in the crisis, SAP offered several of its products to customers for free, enabling companies to empower teams, build a resilient business and transform customer experiences.

To help make our economy more inclusive and regenerative, we have also introduced SAP Product Carbon Footprint Analytics. This tracks the carbon emissions of a product across the entire value chain, including production, raw materials, energy use and transport. In addition, to drive towards a circular economy, we have launched the SAP Plastics Cloud, creating a new global marketplace for suppliers of recycled plastics and plastic alternatives.

By nurturing a network of intelligent enterprises, SAP can help companies digitise multi-enterprise processes for better transparency, traceability and collaboration across the supply chain ecosystem. In this way, we see an opportunity for a fundamental reimagining of enterprise software applications. Ethical principles must guide digital transformation, innovation with purpose and adoption of sustainable business practices.

In future articles in this series, we will explore what companies of the future need to succeed: advancing diversity and inclusion, transforming to circular processes, addressing climate action and promoting social and inclusive entrepreneurship.

These topics are all united under one core theme: the need for global cooperation to tackle today’s most pressing issues. Only when we come together can we create solutions to these multi-faceted and interconnected challenges.

 

Learn more at www.sap.com/purpose