SAP Highlights Connections Between Financial and Non-Financial Performance Indicators; Reaches its Next Milestone on the Journey to a More Sustainable Strategy
SAP AG, a market leader in ERP software today announced its first integrated report, which brings together the information usually shared in an annual report with the information normally contained in a sustainability report. Combining these reports into a single online document allows SAP to highlight the connections between the company’s financial and non-financial performance. The integrated report is a milestone in the company’s journey from having a “sustainability strategy” to making its corporate strategy more sustainable.
The world is experiencing dramatic shifts in economy, technology, society and the environment. Organizations are struggling to fully understand the short and long-term business impact of those changes. To help its customers effectively do this, SAP has made a commitment to develop innovative technology solutions that help the world run better and improve people’s lives. In doing so, SAP helps companies take a more holistic approach to performance and customer success. SAP is working to reframe how it — and its customers — approach problems and create solutions that move beyond improving efficiency, and support transformational change.
As such, an integrated report both facilitates and reflects this new way of thinking about value creation. SAP assesses its performance through four company-wide objectives that balance financial and non-financial measures: revenue growth, margin expansion, customer satisfaction and employee engagement. Many of SAP’s non-financial performance indicators impact those objectives. The integrated approach to reporting allows the company to highlight the dependencies between financial and non-financial performance more easily.
One example of a holistic approach to value is the impact of a ride-sharing application that SAP developed to be used internally by employees. Within just one year, SAP employees in Germany generated more than 22,500 carpools, avoided more than 500,000 kilometers of driving, created an additional 1,400 days of networking and saved 47 tons of greenhouse gas emissions. SAP has estimated the value through cost savings in company fleet and travel, networking and emission reduction generated by the solution during the first year at EUR2.3 million.
“Our integrated approach shows that the business landscape has changed, and the information needed to evaluate performance must change with it,” said Werner Brandt, chief financial officer and member of the Executive Board of SAP AG. “Considering our past financial results and our financial outlook alone does not adequately capture our ability to respond to today’s challenges or demonstrate how we create value. Our future success depends on a holistic approach which helps us — and our customers — navigate the social, environmental and economic contexts in which we operate.”
“The lack of stability demonstrated by the financial crisis, allied to the need for more sustainable practices, has led to a crisis of confidence by investors of business,” said Paul Druckman, chief executive officer, International Integrated Reporting Council. “These events show we need a wider, more complete picture of corporate performance, rather than only the financials, focused on an organizations strategy, prospects, governance and value creation. SAP is one of the leading members of our Pilot Programme that has made substantial progress in their journey to drive truly integrated thinking in their decision-making process at the highest levels.”