Sustainability LIVE London – Daniel Schmid, SAP Keynote

November 19, 2024

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Daniel Schmid, Chief Sustainability Officer at SAP advocates for sustainable business strategies and sustainable innovation

Sustainability is not just a strategic imperative—it’s a cornerstone of modern business.

At Sustainability LIVE London Global Summit, Daniel Schmid, Chief Sustainability Officer of SAP, captivated attendees with his insights on embedding sustainability into core business practices and leveraging innovation to drive impactful change.

Why sustainability is a strategic priority

Daniel begins by highlighting the growing significance of sustainability as a core business issue. Referencing data from the London Stock Exchange, he notes that nearly half of the top 100 listed companies have had to adjust their reports due to sustainability demands, particularly with scope three emissions.

He emphasises the importance of accurate and trustworthy data, stating, "It's about building trust in data because that enables you to fulfil the reporting."

Explaining how sustainability influences SAP’s approach, Daniel identifies key stakeholders – employees, customers, and investors – who expect sustainability to be integral to the company’s operations.

SAP employees, for example, have expressed a 93% preference for serious sustainability initiatives. Similarly, customers rely on SAP's digital solutions to manage sustainability metrics, enabling connected decision-making in real time.

Investors, too, have increased their focus on sustainability. Daniel shares that the proportion of socially responsible investments in SAP rose from 5.6% a decade ago to 40% today.

Daniel Schmid, Chief Sustainability Officer of SAP

Transitioning to a sustainable business strategy

“I am proud not to have a sustainability strategy but a sustainable business strategy,” Daniel celebrates.

This approach integrates environmental goals with SAP's overarching business strategy, ensuring sustainability is not siloed but fundamental.

He recounts pivotal moments in SAP’s sustainability journey, including setting an ambitious greenhouse gas reduction target in 2009, despite initial scepticism.

By 2017, SAP had achieved this goal three years ahead of schedule, underscoring the power of ambitious thinking.

One significant milestone was SAP’s move to 100% renewable energy in its data centres and offices worldwide, a decision that Daniel secured with CEO support. He explains how internal pricing mechanisms on carbon helped fund sustainable investments, describing them as simple yet effective tools.

Further reflecting on SAP’s integrated reporting approach, Daniel discusses moving beyond standalone sustainability reports. Integrating sustainability metrics into the company’s overall business performance report has enabled SAP to link environmental goals with financial results, creating a unified narrative.

Innovation as a sustainability enabler

Innovation – a central theme in Daniel's presentation. He highlights the need for businesses to challenge existing models, rethink product portfolios, and embrace technologies that drive sustainable outcomes.

One notable innovation is SAP’s ‘Green Ledger’, a tool designed to integrate sustainability data directly into business processes.

By embedding this data, companies can make informed decisions that align with their environmental objectives.

Daniel remarks, “Embedding sustainability data in the data models leads to better business decisions and ensures the long-term success of your company.”

AI also plays a pivotal role. SAP uses AI to enhance accuracy in carbon footprint assessments and streamline compliance with evolving reporting standards. For example, their AI-powered reporting generator simplifies regulatory compliance, significantly reducing manual effort.

Daniel describes these tools as essential for addressing contemporary challenges, such as transitioning from average data to real-time metrics, which enable more precise decision-making.

Daniel Schmid, Chief Sustainability Officer of SAP

Governance: Aligning leadership and execution

Responding to audience questions, Daniel outlines SAP’s sustainability governance framework. From annual supervisory board reviews to executive board oversight and cross-functional committees, SAP’s governance ensures accountability and alignment across the organisation.

He highlights the establishment of various steering committees—covering areas like net-zero targets, AI ethics, and human rights—as examples of SAP’s structured approach to achieving sustainability goals.

In closing, Daniel encourages businesses to view sustainability not as a compliance exercise but as a catalyst for innovation and competitive advantage.

"There is either sustainable business or no business," he declares. His message to attendees is clear: accelerating sustainability efforts is not optional; it is essential for long-term success.

Daniel Schmid, Chief Sustainability Officer of SAP