As the global recovery recovers, industries like the enterprise software sector are experiencing renewed growth. Germany’s SAP, which had total revenues of $17.5 billion in 2010, continues to find success across the various software markets in which it is entrenched.
With SAP’s continued growth around the world comes a surging demand for energy. SAP has taken volatility in future energy supplies and prices seriously, and considers energy efficiency as crucial to its overall strategy. Previously SAP’s business performance was closely correlated to its energy consumption. Doing good years, profits, and energy costs, ticked upward; poor sales were linked closely to a reduced demand for energy to run its offices, data centers, and of course, resulted in its employees flying on fewer flights and commuting to offices less. SAP’s focus on energy efficiency has reaped impressive results: a decrease in energy usage and a rise in profits. With its overall energy consumption decreasing by 9% last year, SAP saved US$470 million in energy costs in 2010.
SAP has shifted from treating energy and emissions as a cost to a profit center. The company’s managers have taken a holistic view of its energy needs and identified areas of improvement. SAP set aggressive energy reduction targets, closely evaluated usage across its enterprise operations, and implemented systems that now proactively sends alerts when energy use suddenly spikes anywhere throughout SAP’s global operations.
While SAP scored impressive reductions in total greenhouse gas emissions, data center energy consumption, and total energy consumed between 2009 and 2010, one metric in particular stands out. Renewable energy now meets 48% SAP’s needs, up from 16% from a year earlier. Over a third of SAP’s electricity is from hydro; and about 10% is from wind, much of that from the purchase of renewable energy certificates (RECs). While solar for now provides SAP only a tiny sliver of the firm’s energy, its Waldorf, Germany headquarters and Palo Alto offices generate almost 2200 megawatts of electricity annually. Look for energy from renewables to increase in coming years, especially when considering the German public’s heightened aversion to nuclear energy.
With energy cost savings accounting for approximately 13% of SAP’s net profits, the company proves that an aggressive energy reduction plan is not only good for the planet, but pays handsome returns for the bottom line. Nevertheless SAP’s effects reach far beyond its operations, as it has worked with many high-profile clients, from Valero in Texas to Cemig in Brazil, to reduce their energy consumption and spending.
Overall SAP is a strong CSR model: the firm contributes to communities through several means, including volunteering, the donation of IT solutions, and social investment. Its adherence to Global Reporting Initiative’s guidelines reveals rigorous disclosure, only dismissing sections that are not the result of its core business. For companies determined to lower their energy consumption, however, SAP is a shining case study in corporate social responsibility, and has set the bar high for large multinational firms to follow.