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The Social & Environmental Case for Carbon Offsetting: In Conversation with Barclays

09 Wednesday Jul 2014

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This is Part 1 of a series examining how leading companies are leveraging carbon offsetting and REDD+  to sustain their environmental footprint and target climate change.

“Our vision is about having a proportionate social impact on society.”

That’s how Jillian Fransen, Barclays’ director of Citizenship describes the bank’s elevated – and recently refreshed – sustainability agenda. Among the new elements: a three-year CSR strategy released last year, new stretch environmental targets, supporting growth among the SME sector, and a new Balance Scorecard, which benchmarks remuneration for the bank’s top 125 executives according to four Cs – one of which is Citizenship.

Fransen’s team is also on the cusp of launching an industry-leading Code of Conduct, besides managing and maintaining a 60 million-pound Community Investment Fund and a 20 million-pound Social Innovation Fund, created specifically to seed projects and partnerships that really push the needle on sustainability.

But, of all the things Barclays is doing, what piqued my interest was a core concentration on reducing its unavoidable emissions through carbon offsetting in the company’s climate program.

Carbon Offsetting: Need vs. Efficacy

Now while carbon offsetting has suffered from its share of misconceptions – and remains a relatively new idea in the U.S. – there is a critical need today to get past the debate and begin addressing unavoidable emissions.

Because despite the most robust plans in place that curb air travel and other activities, commerce requires both energy and fuel. And with the growth, availability – not to mention supporting infrastructure – of renewables relatively slow, it becomes a question of operating with what’s available. That is the reality for businesses. And Barclays is no exception.

Calling them “unavoidable emissions,” Fransen explained:

“We buy offsets for the footprint we incur outside our minimization program. We are doing everything we can to minimize emissions but there are those unavoidable emissions that we just cannot remove – like air travel. So to minimize their impact, offsetting fits quite well in our Climate Program.”

The Program focuses on three areas: climate change, developing products for low carbon economies and risk management services for clients with low carbon opportunities.

The firm, which wants to minimize its environmental footprint by 10 percent by 2015, works with Wildlife Works and Reducing Emissions from Deforestation and Forest Degradation [REDD+] projects for its offsets strategy. According to the United Nations website, REDD+ “is an effort to create a financial value for the carbon stored in forests, offering incentives for developing countries to reduce emissions from forested lands and invest in low-carbon paths to sustainable development.”

As Sibilia decoded in his article, the intended impact of the offsetting (emission reductions) leads to not only forest conservation but also a parallel movement to create self-sustaining social enterprises that recuperate the local economies and build social independence. Therein lies the true impact of UN REDD Programmeoffsetting, he concluded.

For Fransen, similarly, the appeal of working with REDD+ lay in Wildlife Works’ expertise and experience in protecting threatened forests  – and its track record with local communities. “Twenty percent of emissions come from deforestation so it made sense for us to partner with organizations that could help us find areas where forests were being destroyed. That way we can have direct impact where it is most needed,” she said.

Then there is the added advantage of targeting local communities in key markets where Barclays operates. “We wanted to take accountability for our footprint. Additionally, Wildlife Works operates in Kenya, which is a key market for us. We are in 13 African countries – the oldest bank across eastern Africa — so having an on-the-ground partner there was key for us. ”

The real impact of implementing a carbon offsetting strategy then for Barclays?

“Create accountability for a footprint that the firm is otherwise unable to get rid of. That wakes people up. When we can have localized impact, it’s a win for us,” she responded.

Climate Change: Decoding the Impact of a Bank

Besides what seems to be the main area – air travel – what is Barclays most challenging source of carbon emissions?

“We have a network of hundreds of small branches. Our biggest challenge is availability and collection of relevant data about our water and paper use as well as waste. Not all our operations have the same level of management and facility support. Especially in Africa, it is very hard to ensure commitment to some of the improvements that are required in this year,” she said.

Another challenging area is the bank’s indirect impacts through its lending practices. “Where we choose to lend and what impact that has on the environment is critical. We need to hit this on a macro level. When you go to lend to an oil and gas company, we need to stand up to our commitment. They work with a minimum of 16 banks – we’re one piece of a large network,” she explained.

The Need For “Some Serious Leadership”

While our conversation mostly focused on Barclays’ carbon reduction strategy, it was hard to contextualize that without questioning what role Fransen’s contemporaries in the financial sector needed to play to sensibly address climate change.

Could Barclays continue to make progress without reciprocation from a sector busy repairing tarnished reputations from the financial crisis?

“There is a major shift going on toward a realistic understanding of what we need to do to adapt to climate change. In my opinion, none of this is happening quickly enough though. We need some serious leadership within our industry in the next five years to change gears on climate change,” she emphasized.

“Our biggest challenge is making it real for everyone in the organization. We have 142,000 employees that manage a matrix of clients and customers. The [impact they can have] is profound. I’d like to see us capitalize on this matrix much more. There’s a feeling, not limited to banking, that we’re doing our bit and everyone else will do theirs – and we’ll be okay.”

“Fact is, the issues are way more pressing for us to rest on that assumption.”

Originally written for and published on CSRwire’s Commentary section Talkback on August  28, 2013.

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Life Technologies: When the Search for Sustainability Becomes a Radical Overhaul

09 Wednesday Jul 2014

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For Cristina Amorim, sustainability has been an evolutionary journey.

Having spent almost a decade with Life Technologies – a life sciences company that produces a wide range of medical and research science products – which quadrupled in size through a series of mergers and acquisitions in that time, the company’s chief sustainability officer has seen multiple renditions of sustainability evolving to the next level.

“I’ve spent a decade looking at opportunities and getting sustainability initiatives off the ground that engage every employee, from the copy room to the board room,” she says. On the heels of the announcement that Thermo Fisher Scientific, a giant in life sciences research, is acquiring Life Technologies, I caught up with Amorim on what the past decade has taught her – and her employer – about setting a sustainability strategy that is evolutionary—moving from being good to being smart business.

Evaluating Sustainability: Asking the Right Question

From 2008 to 2012, the company cut energy use by 22 percent, water use by 52 percent, hazardous waste by 13 percent and CO2 emissions by 21 percent, according to its latest sustainability report. With greater growth on the horizon, can Life Technologies continue its sustainability march?

According to Amorim, that’s the wrong question.

“We’re well positioned to harvest the smart business prophecies of sustainability. There is a lot to do to reach a closed loop system and position ourselves in the circular economy. The question is: when do you know you’ve gotten there?”

“I think this is a continuous spiral with no particular end point, but constantly looking for the new frontier that the sustainability lens brings. This is not about creeping incrementalism; it’s about radical change. It’s about turning a moment into a movement, and fostering multiple movements to effect real change”

“Five years ago, no one was talking about zero waste. The economy has changed, allowing zero waste to be a financially viable undertaking. We now have five certified zero waste sites, and the movement goes on. And what would come next?” she continued. “After zero waste, we would envision a zero emissions site—one that has no emissions to air, water, or landfill.”

Now in her fifth year of sustainability reporting, Amorim has spent the better part of the last decade in an environment, health and safety role and understands the complex dynamics of Life Technologies’ Cristina Amorimmainstream products. Acknowledging that her journey has been more about challenging the status quo, she explains:

“We constantly ask questions to challenge what we have been doing. For example, can we source raw materials that are less toxic? That would create a less permitted and safer operational environment with less waste to dispose of. This in turn leads to products that are simpler and cheaper to ship, as they require less packaging, less regulated storage and fewer transportation fees. As a result, our customers will have less packaging and hazardous waste to deal with, reducing their total cost of ownership.”

When Complex Challenges of the 21st Century Meet Genetic Sequencing

So how did Amorim, who was recognized by Ethical Corporation in 2012 as Sustainability Executive of the Year and is Life Technologies’ first CSO, initiate a sustainability strategy that leverages the company’s technology in the markets it serves?

“As I see it, the entire company is the epitome of sustainability. Our genetic sequencing technology has the potential to address some of the world’s most pressing challenges. Just like in the 20th century, computing science turned a mainframe computer into an iPhone, in this century, life sciences is increasingly putting more DNA sequencing power into smaller devices at a lower cost – making it accessible to every scientist in the world. As sequencing is becoming democratized, scientists increasingly have the tools to transform life as we know it.”

In a world where 70 percent of available freshwater is used for agricultural irrigation, Life Technologies products have the potential to transform food economics. By re-engineering seeds, scientists can create higher-yield and drought-resistant crops.

Amorim continues, “As scientists leverage DNA sequencing technology to harvest oil from algae, biofuels will free us from extracting petroleum from the earth and tackle climate change
simultaneously. The significantly decreasing cost of sequencing the genome hastens theLifeTech_2012 development of more effective medicines, vaccines and clinical solutions that alleviate the health and economic burdens on society.”

Embedding a Cultural Shift: A Decade in the Making

As a biotechnology company, Life Technologies manufactures temperature-sensitive products requiring storage and shipment conditions ranging from -80° Celsius to ambient. Cold shipping requires expanded polystyrene (EPS) coolers and refrigerants like dry ice and gel packs, to maintain specific conditions during transport.

As the U.S.’ largest shipper of dry ice with FedEx, each year we ship 800,000 EPS coolers (equivalent to 105 truckloads) and consume 4500 metric tons of dry ice, costing $15 million in packing, refrigerant and freight. Given the poor recyclability of EPS, energy intensity of refrigerants and package weight, this represents our largest environmental impact and opportunity.

How is Life Technologies turning this challenge into an opportunity? Amorim explains, “Our strategy includes eliminating the need for coolers by converting products from cold to ambient shipping, piloting cooler reuse options, and investigating alternative materials to expanded polystyrene.”

Through a robust stability testing program, we have proven that some of our products can safely withstand ambient transport conditions. Just like transporting ice cream from the supermarket to your home freezer– we don’t carry a cooler or dry ice in our trunk.

“So far we’ve converted genetic analysis, sequencing, cell culture and molecular biology reagents, top-selling capillary electrophoresis and transfection reagents. The impact has been significant—each year, we now ship 250,000 fewer EPS coolers (33 fewer truckloads), use 2400 fewer metric tons of refrigerant, and save $4 million in operational costs globally. Most importantly, we know our packaging becomes our customers’ waste. These product conversions help us leave less branded garbage in their hallways.

Of course, the effort requires engagement across multiple functions. “From R&D to distribution and sales & marketing, everyone has a part to play. We tapped into natural leaders across these functions to become ambassadors for these initiatives. It provided them with visibility and career growth opportunities. They are delivering cost savings, protecting the environment and feeling good about it,” she added.

The Externalities: Collaborating with Suppliers

While these examples prove a significant point about how sustainability thinking can shift mindsets on profit, purpose and business value across organizations, what about Life Technologies’ external supply chain? With over 50,000 products and complex transportation cycles, how is the company addressing sustainability in its supply chain?

“I have a hard time understanding the traditional concept of ‘greening the supply chain.’ Asking hundreds of suppliers to fill out forms and check boxes provides no tangible value. We could never understand how to take action on that supplier data,” Amorim explained. “Instead, we find more value in partnering with key suppliers.”

One example is Kimberly-Clark. On the path to zero waste, Amorim and her team went dumpster diving one morning to understand their waste streams. What they found was a sea of blue and
purple  latex gloves.

We approached the glove supplier, Kimberly-Clark, who partnered with us to implement a glove take-back program. It started in one location and has today expanded to five. We segregate the gloves at the point of use and Kimberly-Clark sends them to TerraCycle, who turn them into purple park benches. This partnership provides true value—glove take-back helped us achieve our zero waste goal and helped Kimberly-Clark increase their revenue by becoming our sole glove supplier globally.

Take Back: Turning Obligation into Opportunity

The circular economy has arrived. That is what excites Amorim, one of very few female CSOs in the private sector. “The regulatory environment is also helping us close the loop. The WEEE [Waste Electric Electronic Equipment] legislation in Europe is one example,” says Amorim.

WEEE institutionalizes the cradle-to-cradle concept as a means of keeping electronic equipment containing heavy metals out of landfills. “Wouldn’t you like it if Maytag removed your dishwasher at the end of its life? I can’t move it and it doesn’t fit in my trashcan. In Europe, we now have to set up a take-back scheme for all of our instruments. How can this be done profitably?”

“We realized that by taking instruments back only to recycle the parts was a cost burden. Instead we bring them back to refurbish certain product lines for resale, harvest high-value parts to be used on service calls, and responsibly recycle what’s left.”

For Life Technologies and other companies, refurbished instruments open up an entire new market. At a lower price point, instruments such as DNA sequencers are more accessible to more scientists. And with increased revenue, the WEEE obligation becomes an opportunity.

While issues like cold chain shipment, waste, and regulatory compliance present thorns on the way to the gilded goal of a closed-loop model for Life Technologies, triangular connections in its supply chain and their appetite for cutting-edge innovation leads one to believe the opportunities are endless for Amorim and her team.

As the exuberant sustainability chief concludes, “We’re aiming for radical.”

Originally written for and published on CSRwire’s Commentary section Talkback on July 22, 2013.

Shared Success at Verizon: No Silver Bullet for Sustainability, Say CSR & Sustainability Chiefs

09 Wednesday Jul 2014

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Verizon recently released its second Integrated Report, combining the company’s financial and non-financial data and metrics into one clean look at its overall performance.

While the technology giant has been publishing its environmental, social and governance results for almost a decade, integration with the firm’s financial performance is relatively new. And Verizon saw several significant changes in 2012 to its approach to sustainability and shared value – which Verizon calls “shared success” – including a reformat of its Foundation’s model.

In a recent webinar, I had the opportunity to discuss the report, Verizon’s goals, challenges and a whole host of issues with Verizon’s CSR and sustainability chiefs Kathy Brown and Jim Gowen, along with an engaged audience.

Here are excerpts – and a link to the webinar recording.

Whether you’re eager to learn more about Verizon’s approach to sustainability or what the future holds for integrated reporting and sustainability standards, the webinar will provide you with exemplary context, insights into one company’s efforts to reduce its impact, and how a multinational must pick a strategy that is holistic, focused and measurable.

Shared Success:

Kathy Brown: “When Lowell McAdam became our CEO a year and a half ago, he brought with him a set of principles by which he inspired us to live. It is a value-based approach to our work in the market. We deliver outstanding communication and technology for our communities and country. And we are to share our success with the community. While Michael Porter gets a deep bow for creating Shared Value, these pillars – solutions, service and sustainability – state our mission and our version of shared success.”

Verizon's Shared Success Innovation Process

“We want to achieve measurable social impact. We can do a number of things at one time because our technology is powerful enough for us to find a way to do well for our shareowners and stakeholders, communities and countries in tackling the world’s problems…Specifically, we are focusing on how technology can bring transformational change in education, healthcare and energy management. The platform is our fiber network [and] our wireless network. Through these [networks] we are able to reach millions of users and applications that can literally change the world.”

Setting Aggressive Targets:

Jim Gowen: “Our sustainability program includes aggressive targets, follow-up and our people [who] really do make the difference. In September 2009, when we created the Office of Sustainability, one of the challenges was how were we going to make an impact on a business that [in many areas] is growing exponentially. So we set the Carbon Intensity Metric as the way to grow most efficiently. We set an objective by 2020 to improve our carbon efficiency by 50 percent. Since 2009, we have driven our carbon efficiency 37 percent.”Verizon_networks

“But as I often tell my employees, that was the easy part. Now comes the tougher part. We’ve taken care of all the low hanging fruit. How do you keep that momentum going? For example, e-waste is one of our biggest impacts. We’ve set a goal of collecting more than 2 million pounds of e-waste by 2015. That’s no small feat.
We’re doing that internally as well as externally with our Recycling Rallies.In the last two years, we’ve held 36 of these [across the country]. That objective is very important to Verizon and our customers.”

Environmental Footprint: Setting the Stage

Jim: “Our environmental footprint is quite large. Supporting hundreds of millions of customers takes a lot of work. We operate 42,000 cell towers, 31,000 facilities globally, and [a] 38,000 private fleet of trucks and vans, etc. We had to concentrate on our own resources and see how to become sustainable.”

“We focus on four key areas: making our networks more efficient; expand[ing] our renewable sources of energy; run[ning] our fleets more efficiently; and reduc[ing] the lifecycle cost of ownership of how we operate.  From purchasing to logistics and sustainability – they all match up nicely.”

Highlights from 2012: From Packaging to the “Magic Bus”

Jim: “How do we make our packaging more environmentally-friendly? How do we handle the end of life for that? We asked our OEMs to make their equipment more energy efficient – 30 percent more than legacy equipment. Then we looked at our consumer stores: 131 stores have been LEED certified so far with the U.S. Green Building council, and a pilot is underway to increase that number across our markets.”

“We recently launched our Magic Bus program. The idea was generated by one of our line managers in New York who suggested that, instead of driving our own vans around very congested areas of New York, why couldn’t we drop off our employees with their equipment to provide service to our customers?”

“From that originated a three-month pilot where we used vans that could host eight to 10 technicians with their equipment and inventory on board, and we started driving them around areas of Manhattan. We would pick [up] and drop them [off] and provide service to them throughout the day when they needed it. The benefit was significant – for our customers and our employees. We’ve now started 25 of those Magic Buses in New York and removed 250 of our vans off the roads of New York City.”

No Silver Bullet for Sustainability

Jim: “There is no silver bullet and no magic button. It’s going to take a lot of trial and error and a lot of commitment. While we think and look at our lifecycle approach, we’re still in our immaturity stage,  and the Verizon_reportopportunities ahead of us are so powerful that we can have a significant impact”

From Sustainability to Integrated:

Kathy: “Our Shared Success Council is made up of senior executives across the company – including marketing officers, product managers, general counsel, etc. – who are clearing the strategy for growth and in the process, sharing the idea of Shared Success. The report recognizes these efforts.”

“The process involves a lot of collaboration between executives and the folks on the ground. We focus a lot on our data, and we don’t see this journey as involving any one data point. It’s a journey of doing business, and the report reflects that. We’ve shown enormous efforts and growth, and the information is easy to read and use for our stakeholders across the board.”

Jim: “The report also helps us tell our story concisely. Our customers are asking, as are our investors. They are asking how we’re measuring ourselves? What are our goals – people want to invest in sustainable companies – and how are we incrementally achieving those?”

Technology and Health Care: Powerful Answers

Kathy: “We need to work on reducing costs on factory delivery systems and improv[ing] patient outcomes. Think about what you have on your iPad or phone today. We believe we can, in a more systematic way, think of security and identity issues for patients, fast connections, and [the] ability for patients and doctors to talk to each other in a secure environment through our technology, etc. We call this Powerful Answers.”

Who’s Reading the Report?

Kathy: “Internally, the audience is our employees who can have sense of our values as a company. Externally, people want to do business with companies with a heart but also have the technology and wherewithal to solve their problems. Beyond individuals, this includes communities [and]  governments who take on big ideas about congestion, smarter cars, health care, etc. This report does a good job [of] painting the bigger picture for this audience.”Verizon_Powerful_Answers

Jim: “[The] hip market that will change the world [is] using our technology, and this report helps them see first-hand the choices they have. Sustainability at Verizon is driven by our employees and our communities, not just one executive.”

Supplier Responsibility:

Jim: “Over the last couple of years, we have queried our top 200 suppliers, which represent 80 percent of our total spend, to ask them how they manage their CO2 and greenhouse gas impact. What goes into the products they supply to Verizon? And we were very surprised at the answers we got back and tallied them up and graded them.”

“Whether they’re early adopters or much more mature with their sustainability strategies, we’ve set ourselves a 2015 goal: to operate with over 40 percent of our suppliers that have targets and greenhouse gas emission goals. That impact is significant, and we’ve already seen that through the innovation they’re bringing to us about how they can become more sustainable and continue working with us.”

Evaluating Success:

Kathy: “We get all sorts of consumer indicators of how we’re doing in our community. We know how they use our network, what they think of it, etc. Once we start asking consumers how we’re doing in terms of impact, the responses have been very good. But it has been a challenge to do that in a broad way across many segments.”

For more insights from Verizon, listen to the webcast.

Originally written for and published on CSRwire’s Commentary section Talkback on April 18, 2013.

SAP’s 1st Integrated Report: From Sustainability to Integrated Thinking

09 Wednesday Jul 2014

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Using Integrated Reporting as a catalyst for integrated thinking.

That’s how Peter Graf, SAP’s Chief Sustainability Officer expressed the firm’s decision to replace two reports – the annual report mandated by the law and submitted to the SEC indicating the company’s financial performance and the sustainability report , voluntary in nature and showing its non-financial performance– by one Integrated Report for 2012.

While Integrated Reporting is a fairly new trend – The International Integrated Reporting Committee [IIRC] website hosts a total of 41 Integrated Reports since 2011 – it’s not surprising.

As the trend of CSR and sustainability reporting grows – due to multiple factors including a recessionary economy, dwindling resources, emerging conflicts in supply chains and a better connected world – logically, Integrated Reporting is the next step for any organization truly attempting to be as transparent as possible about its financial and non-financial challenges and performance.

Shift in Engagement: From Sustainability to Integrated

At SAP, the impetus for the shift was the realization that “we needed to engage within our organization on a different level” according to Graf. “We have been reporting on our sustainability performance since 2008. The report has grown in sophistication over the years and we even won several awards in the last two years for our report’s interactive nature, etc. So technically, we could have continued on that road,” he added.

Last year, CSRwire collaborated with Graf and his team on a webinar to launch SAP’s new interactive report. Complete with social media buttons, comment sections and multimedia options, the report could be customized and perused in multiple ways depending on your agenda. The report was well received – and in a span of an hour SAP_Integrated_Reportwe received over 30 questions from a very engaged audience.  [Join us for a webinar with Peter Graf, IIRC CEO Paul Druckman and others today at 11am ET]

SAP set a trend last year, so why the shift again?

 

Connecting the Dots: The Bigger Picture

“We have been measuring key performance indicators [KPI] on the financial and non-financial side for quite a while. But one day, we started to put them all on a white board trying to draw connection lines between them. Before we knew it, the chart was pretty full. We started to do research both internally and externally , to better understand and compute those relationships. Suddenly it became clear, just how interconnected non-financial and financial performance indicators really are,” he explained.

“When I heard about Integrated Reporting for the first time, I got excited. But then I thought: It’s going to be a very long process to achieve the integrated thinking that must be portrayed in the report. I viewed the Integrated Report as an outcome. However, over time our team reached the conclusion that instead of waiting for the right engagement at SAP to happen, we should use the process of producing an integrated report as the forcing function to drive the necessary engagement,” Graf added.

“In its integrated report, SAP lays out the interdependencies between financial and non-financial indicators,” said Graf. Proof points like: an increase or decrease of one percentage of SAP’s retention employee retention at SAPrate saves/costs the company 62 million euros. And since 2007, a peak year for energy consumption at the company, SAP has avoided 220 million euros ($285 million) through energy conservation efforts.

“When these kinds of relations appear between financial and non-financial indicators, they do more than make the business case for sustainability. They serve as the catalysts for an integrated corporate strategy.” said Graf.

While the entire report is available online, a parsed version – “we kept out customer stories but retained all other ESG data and metrics” – is submitted to the Securities & Exchange Commission.

SAP’s 2012 Performance: Key Highlights

So what will you find in the integrated Report this year?

For one, retention was up [94 percent in 2012] as was diversity, i.e., the number of women in management [an increase of one percent from 2011 to 19.4 percent].

The goal: to reach 25 percent by 2017.

Total energy consumed stayed stable at 2011 numbers while revenue increased by 17 percent and emissions per Euro in revenue and per employee were reduced for the sixth year in a row. Overall emissions were slightly reduced, in spite of the company  adding 9,000 new employees in 2012. Finally, the use of renewable energy increased from 47 percent in 2011 to 60 percent in 2012.

Also intriguing to me was a section, which detailed SAP’s People Strategy.

I asked Graf what the strategy involved – and how did they measure the outcomes besides retention and diversity?

“Having a sound strategy around people is essential in a company that solely relies on its employees to create value. Thus our ability to compete is highly dependent on our human resources and it’s impossible to separate that from our financial performance,” he said.

“First, we want to hire more diverse people. We believe more diverse groups innovate better. Second, we want to nurture our talent through clear development plans, challenging assignments, social media, e-learnings, etc. And finally, we want to leverage employee engagement as a decisive factor. So we measure retention and diversity but also engagement, which is a core and central KPI in driving our overall performance in the future,” Graf added.

Measuring Employee Engagement: Critical to Business Performance

So what contributed to a drop in employee engagement in 2006-2009?

“I believe there are various reasons that led to a decrease in engagement during that time. Most important, however, is how we made it back to the high engagement scores of today: When economic growth came back after the recession, the leadership of the company changed, a compelling innovation strategy for growth was established, the company was given the purpose of helping the  world run better to improve people’s lives and Energy_consumption_SAP_2012overall we enjoyed strong and continuous revenue growth as a result. So, a combination of issues got us into low engagement scores and a combination of things got us back on track.”

SAP also measures a Business Health Culture Index. Does that measure the company’s engagement quotient and connect it with business performance?

“We use this index to measure the health of our employees. There are four times as many stress-related illnesses in the intellectual property industry as compared to other industries. So we use data from eight questions [purpose, leadership, recognition, empowerment, rewards, stress levels, compared to people my age I feel more/less healthy] to understand where we stand and what we need to do to take care of our employees.”

In 2012, SAP’s Health Index stood at 66 percent, a one percent increase since 2011 and significant growth since 2008-2009.

Integrated Reporting: Check. What’s Next for SAP?

With all the data and metrics dancing around in my brain, the only question left to ask was, what’s next?

“On the one side, we recognize that integrated reporting is an early trend and that we certainly have to continue to improve and learn. On the other side, we have the ambition to lead, even if this means that we may make a mistake that followers might be able to avoid,” said Graf.

“The next steps clearly are to continue to move away from just having a sustainability strategy to making our corporate strategy more sustainable. This requires an engagement with leaders across SAP that we have not achieved before moving to integrated reporting,” he added.

His recommendations for companies who might be complacent with limited voluntary disclosure or perhaps hesitant to mix the voluntary with the mandatory?

“As soon as people recognize that  integrated reporting helps companies understand and grow the way how they create value at their core, , it will pick up. More and more people know this intuitively today but when someone connects all the financial and non-financial numbers with each other, then the big picture emerges,” he said.

SAP’s Integrated Report 2012 is available at www.SAPIntegratedReport.com.

Originally written for and published on CSRwire’s Commentary section Talkback on March 25, 2013.