SAP Argues Business Case of Integrated Reporting

by | May 16, 2013

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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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