In this episode of Good Equals Progress, our webcast focusing on all things sustainability and beyond, I’m joined by Jeff Harvey, Senior Vice President and Chief Revenue Officer, Industry Cloud/SAP Customer Success at SAP, for a fascinating and timely conversation about carbon emissions reduction.
Organizations of all sizes have felt increasing pressure from consumers and regulatory bodies to slash carbon emissions. Many have made pledges to get to net zero carbon by 2050, which is great. The challenge here is that it’s not at all clear — for most organizations, anyway — as to exactly how to go about about achieving those goals. One of the biggest challenges is around data: what data does it take to accurately define carbon emissions and what technology solutions can help? That’s just what Jeff and I discussed, so if this is something that’s on your mind, this is a conversation you’ll want to tune in to.
Our conversation covered:
- The current state of the carbon emissions, including how much carbon organizations are emitting each year and what the long-term impact that we will likely see as a result. We explored data from the UN Emissions Gap Report that found that organizations need to reduce emissions by 55 percent by 2030 to stay within the target of a 1.5°C global temperature increase. The unfortunate part? Organizations haven’t done enough yet and temperatures are expected to climb 2.7°C.
- We explored the goals organizations have set for 2050 and why we still haven’t seen much action.
- We discussed the many moving parts of carbon emissions reduction and reporting and highlighted the key areas businesses should be focusing on.
- We also discussed what SAP is doing to help customers measure and report their carbon emissions. Jeff provided insights on what his team is doing to ensure SAP meets its own sustainability goals as well.
Jeff shared details about how some of SAP’s Partners are addressing sustainability needs and some of the innovative solutions that are available in the SAP store, including the following:
- Carbon.AIs by VASPP
- Digital Shoe Size Consultant by Footprint Technologies
- EcoVadis Supplier Sustainability Ratings
- Carbon Footprint Data for Chemicals and Plastics by Carbon Minds
You can find more information on SAP’s wide range of sustainability related offerings at the SAP store, and I hope you’ll pop over and explore. You’ll be amazed at what’s available to help your organization achieve your sustainability and carbon emissions reductions goals.
Watch the full episode of my conversation with SAP’s Jeff Harvey here (and hit the subscribe button while you’re at it)
Or stream the audio here (oh hey, you can subscribe here, too):
Or find the entire transcript below.
Good Equals Progress provides industry research and analysis on the topics of Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI). These columns are for educational purposes only and should not be considered in any way investment advice.
Other insights from Good Equals Progress:
Shelly Kramer: Hello, and welcome to Good Equals Progress, a webcast series that’s part of our Futurum Tech family of webcast focusing on all things sustainability. I’m Shelly Kramer, your host, and a principal analyst here at Futurum Research. On today’s episode, I’m joined by SAP’s Jeff Harvey who’s the senior vice president and CRO, Industry Cloud. And we are going to be talking about all things related to carbon emissions reduction. Hello, Jeff, it’s great to have you.
Jeff Harvey: Hi, Shelly. It’s great to be with you.
Shelly Kramer: The reality of today is that organizations large and small are feeling increasing pressure from customers, regulatory bodies, employees to slash carbon emissions. And our team here at Futurum is very focused on all things sustainability. In fact, we believe that sustainability is joining digital transformation as a primary area of focus for corporate leaders. That said, that comes with its own set of challenges for organizations and leaders. Many have set pledges to get to net zero carbon by 2050, we’ve heard that everywhere, but some of the challenges here is that organizations have planted a flag in this goal and they’re not quite sure how to go about getting there and achieving these goals and the flags that they’ve planted, what data does it take to accurately define carbon emissions and what technology solutions can help.
That’s one of the reasons we are so focused on sustainability here at Futurum today because we believe we know from talking with our clients that those are the things that are on their mind. We’ve planted a flag in the sand, now we have to figure out how we’re going to get there, how are we going to put the right strategies in place, what technology solutions do we need to help us get there, and that’s what we’re going to be discussing today. So, Jeff, I cannot wait to dive into this conversation. Before we do that, I’d love to hear a little bit more about you, your career background and how you ended up where you are.
Jeff Harvey: Absolutely. I’m in my 21st year with SAP, as you mentioned, currently serving as chief revenue officer for Industry Cloud, which is a new area for us, a new portfolio of innovative solutions that help our customers extend business processes and capabilities with advanced technologies, ML, AI, things that help them run better, run smarter and be more intelligent enterprises. I’ve spent my early years in consulting, implementing enterprise software back in the day, and a former CIO, so I’ve been all around this ecosystem and it’s an honor to be with here today and talk about this because sustainability is such a critical topic in all things we do, emissions just being one measure, but just there’s so many areas that it affects the enterprise and ultimately the globe.
Shelly Kramer: Absolutely. Let’s start our conversation by talking about some facts and figures, the current state of carbon emissions. How much carbon are organizations emitting each year and what’s the long term impact that we’ll see as a result? And actually why is this such a hot topic right now? I know the answer and I know you know the answer, but let’s start with why is this such a hot topic right now?
Jeff Harvey: And it is a hot topic, no pun intended I’m sure by you there. And the answer is it’s too much. It is contributing to global warming and the amount of emissions that are being produced by organizations around the globe it’s too high and something we need to address. Scientists warn that if the planet warms by one and a half degrees centigrade above pre-industrial levels by 2100, that bad things will happen. This includes severe climate disruptions, which will exacerbate hunger, conflict and drought worldwide. These are things that are discussed every day and people should be readily aware of.
Shelly Kramer: … happening around us.
Jeff Harvey: It’s all around us every day and it shouldn’t be a surprise to anyone when they hear those statements. In order to achieve this, like you said, scientists are looking at, by 2050, achieving a state of net zero carbon emissions and by 2030 to reduce the current level of carbon emissions by 55%. That’s why these two years you keep hearing, 2050 and 2030, net zero by 2050, 55% reduction by 2030. And there’s multiple ways to calculate it. There’s maybe even differences of opinion of what gets included in the calculation or not. The important thing to note is that roughly 60 gigatons or CO2 equivalent is coming from businesses which is a significant producer and contributor to the greenhouse gas emissions and part of the problem. So it’s something that’s real, it’s something that is measurable. It’s hard for all companies to probably get a pulse on where they’re at in their contribution to that number, but it’s something that we need to get to so that we can ultimately get after the solution.
Shelly Kramer: Absolutely. We had a brief respite there served up by a global COVID-19 pandemic. And it’s interesting because of course I think everybody remembers… Do you remember seeing those images of India or other countries where pollution is big, air quality is problematic, and things like that? It was like, “Oh my gosh, the things that we can see when…” And not that I’m lobbying for another global shutdown, because of course that isn’t sustainable, but in any case there were a lot of changes. I think you have some data points on that.
Jeff Harvey: Yeah. I think the only timeframe recent certainly that we saw a reduction was with the COVID lockdown. And in that case, we actually saw a reduction in that timeframe where we had a drop in emissions in 2020 by 5% when people were in a lockdown and they were stationary and not traveling or driving or even out and about. In 2021, we went right back to those prior levels, rising 5%, giving it back. And before the pandemic, CO2 emissions had increased 20% over those last 10 years. So the trend was growing, 2020 was the only year we saw a pause, and we went right back to that level as soon as we were returning to normal life.
Shelly Kramer: We charged back.
Jeff Harvey: And it’s something you see, I remember landing in China once on a flight and I said, “Boy, the cloud cover is really low today.” It’s actually almost at the top of the buildings as we were driving to the hotel and they said, “That’s not cloud cover. It’s pollution. It’s smog.” And it almost felt like you could touch it. And the AQI was 570 that day. So it was don’t go outside, don’t exercise outside for sure and avoid it as much as possible. And that’s not a normal way of life nor a sustainable one either.
Shelly Kramer: And it is one that doesn’t affect any change. It just keeps getting worse. Actually we see lots of claims as it relates to this is what we want to have happen from an organizational standpoint by 2030. I will tell you that we’ve done some research that we haven’t yet published that has indicated that people feel good about the progress they’ve made over the last year, but COVID, we saw things reduced, they don’t feel positive, they don’t feel that they’re on track to meet their longer term goals. That doesn’t surprise you in any way I’m sure. It certainly doesn’t surprise us. But when we say 2050 goals, and we collectively have some big goals set around 2050 and that’s great, but it’s also a problem, why is it a problem?
Jeff Harvey: It’s a problem because inherently it’s just so far away, so there’s no sense of urgency of what do I need to do today or what can I do today to affect this outcome that is a target we’re shooting for even in 2030, let alone 2050. And I don’t know about you, but I don’t know if you’re contemplating what you’re going to be doing in 2050. How many times have you heard somebody say, “Oh, I’m going to start my diet tomorrow. My New Years resolution is I’m going to do these things differently,” and 30 days later, you’re back to old habits? And it requires us to take action now and to set a goal, interim goals. If you think about recently just last week, we could go today, there was JFK’s anniversary, the 60th anniversary of his speech talking about landing men on the moon, and at the time that was a pretty audacious goal. And he didn’t say, though, “We’re going to do this in 1992, 30 years from now.” He said, “We’re going to do it in eight years.”
Eight years within is within the decade, it required some immediate action and we achieved that goal. And it was a matter of also collective execution to do so across both sides of the aisle and maybe even all around the globe, across countries to contribute to that objective. There are markers out there like that to make that real. Just last week or week before you heard that California said, “We’re going to ban the sale of gas cars, new gas cars by 2035.” That’s not that far away, 13 years, but then just last week they’re talking about, “Hey, don’t cool your house. Don’t charge your phone. Don’t charge your EV because of brownouts.” The grid can’t handle the current drain, but we want to put more on it. So that just, again, is a note that we need to make sustainable changes to fuel sustainability to enable that to be real because otherwise the grid’s not going to be able to handle the additional throughput that it gets hit with .the same goes for companies.
Shelly Kramer: It’s true. And I think about it I had this conversation with my 16 year old twin daughters today, and I’m the tree hugger in our family, but I’m constantly telling them all these little things that I do, they came home from Target today with plastic containers, full of things and I said, “You know what, guys? I know that you buy these once a month and I understand why you buy them, but you need to start thinking about what I can do to eliminate single use plastics, and you need to think about, oh, can I use a bar of soap instead of this shave gel in a plastic can?” But my point here is that it’s thinking about those incremental steps, those little things, and you can do those same little things as an organization, which of course are bigger things generally speaking.
But it really is thinking about, I think, what are all these small things that we can do together add up? And I think they make a big difference because just going down the path of, 2050, it’s so far away, I’ll be dead, I think that’s what it feels like sometimes I know to younger people that’s what the mindset is, but the reality of it is we don’t have a lot of time. We have serious things that are happening every day. We have the storm in Japan. We have what’s happening in Pakistan. We have flooding in the United States. We have very serious climate change things happening and all of these things are going to require all of us working together and businesses really understanding how they need to think about, how they need to implement, how they need to evaluate those 30 year plans of theirs.
Jeff Harvey: You’re absolutely right. And I think our 26 and 24 year old kids the same way don’t know what a bar of soap is I don’t think and I just keep telling them the same thing, “You don’t need to buy more shower gel, just here’s a bar soap and it’s fine.”
Shelly Kramer: That’s such a generational thing. It truly is. And I will say, so I have two crops of children, I have daughters who are in their early 40s and then because I’m trying to do my part to procreate, I guess, I have 16 year old twins, but their generations collectively they don’t use bars of soap. They use bottles of body gel and things like that. And I do really find myself on a regular basis talking with them about this is why your crazy mom does the things that she does, please don’t buy water bottles from vending machines. Please put that out of your lives. Just those little things, they make a big difference. So let’s talk a little bit about businesses and are they being evaluated on their 30 year plans? I know we’re seeing a lot of corporate sustainability reports, we’re seeing more and more corporate sustainability officers being appointed in positions or hired in positions within organizations, but how are businesses being evaluated on those 30 year plans?
Jeff Harvey: It’s becoming more and more mainstream, like you said, with a CSO, a sustainability officer being named, and that’s step one, getting accountability within the organization for it, and then maybe step two is setting the goals and objectives for your company. Where do you stand today in terms of your overall… Companies know and they report on their top line, their bottom line, their earnings per share, but what about their green line? What is your contribution? Is it net positive? Is it a negative? What’s your plan to get to net zero by 2050, or ideally sooner, so that you can contribute to this cause? And I think as we start to talk more and more about the green line, it also brings up the topic of your ability as an enterprise to be able to measure the CO2 that you produce not just within your four walls, but beyond and across your entire value chain.
All of the stakeholders, the suppliers, customers, transportation providers, logistics companies, whatever it is across your supply chain, the parties that you engage with, how are they doing and how can perhaps you help them to get better so that collectively your value chain is a beacon for change and is actually improving the situation overall? There are a number of enterprises that can help you calculate this. There are methodologies and initiatives like the SBTi, Science Based Targets initiative, where they help companies to understand where they’re at today and then to set targets that will support and align to their sustainability strategies. And as Drucker famously said, you can’t manage what you don’t measure, so it starts with that, having a sense of urgency by getting after today, setting targets secondly to help drive execution, and then three, ultimately measuring against those targets to close the loop.
Shelly Kramer: That’s what I want to talk about a little bit. As a career marketing brand strategist, I’ve been saying, “If you don’t measure, you’re not doing anything really.” So setting targets are great. We find that one of the biggest challenges that organizations don’t know what they don’t know, that’s my favorite deadline that I use all the time, but thinking about where to start, how to develop a target, how to measure progress, and the reality is that sustainability tracking measurement and the ability to meet goals all revolves around that one thing, data. There’s so many moving parts. So let’s talk a little bit about what are some of the key areas that businesses need to be thinking about when it comes to tracking and reporting?
Jeff Harvey: The three big metrics, there are so many in the equation, but the three big ones are CO2 emissions, water use, and waste. And in the case of CO2 emissions, there’s really four scopes that it breaks down to. Scope one covers emissions within the four walls of your business, of your enterprise. Scope two is energy. Scope three is the upstream supply chain. And then scope four is your downstream value chain or supply chain. That’s basically your ecosystem that you operate in day in and day out as an enterprise and all the stakeholders that you collaborate with. So once you get your arms around that and get a benchmark maybe starting data where are we, so we can then chart a path to improve and we can help all of those value chain partners we have upstream and downstream to get better with us together. And I think that’s a key factor there and looking at things like, okay, how do we design?
We have a solution called Responsible Design and Production. It’s about taking plastics out. It’s about creating a more sustainable packaging for your products that’s ultimately even better for your consumer and certainly better for the environment. So things like that to actually start to look at proactively thinking how are we going to do things differently and get a better result in doing so.
Shelly Kramer: I was on site this last week for a couple days at a client’s R&D facility and one of the gentleman who runs this organization for a very, very large company, he was welcoming the group to the tour that we were doing and just sharing a little bit of the company’s passion and mission, and one of the things that he said is that I know this is so cheesy, but when I go home and my kids want to know, dad, tell me a little bit more about what you do, he said, “I get up every day and I come to work and everything I’m focused on is about making things better for the planet and the products that we make, and a lot of different products, a lot of products that go into both businesses, buildings, and personal property and personal care items and all these sort of things.”
And it was a really cheesy thing, but it’s like me saying to my kids, “I’m not just a crazy tree hugger, I’m going to be gone, but I’m trying to make sure that you have a sustainable planet moving forward.” But I thought that was really cool about just sharing his passion. And this is somebody who’s been with the company, like you, for a very, very long time, and he’s had many jobs within the company, but this particular job is just so firing him up because he does really feel like everything that he does from a work standpoint is focusing on doing good, and I think that’s a lot about your role within SAP and it feels good, doesn’t it?
Jeff Harvey: It does feel good. Our vision is to help the world run better and improve people’s lives. It’s a big goal. I remember when we set, it was set that way intentionally so that we thought beyond just the products and the portfolio and the things we do on a day to day basis, but our role, our job, our responsibility on the planet to help it run better and improve people’s lives in doing so.
And that actually helps us keep everything in perspective on what we need to be doing and to help our customers be running at their best with a set of solutions and assets that actually help them in the area of sustainability to get better like the SAP Cloud for Sustainable Enterprises, that’s a collection of solutions to help them do what we’ve been talking about, measure where they’re at today and define a future state they want to get to and to drive and measure their progress between now and then so that we’re working off that just like they want to do in terms of market share growth, EPS growth, margin growth, those are clear objectives and KPIs for many executives today, let’s give sustainability the same footing and the same standing so that we can do this together.
Shelly Kramer: Well, I think those are great goals. And another thing that I think is really important is it’s one thing to talk the talk, but I think walking the walk is equally as important, especially with so much visibility into sustainability initiatives. And so you can’t say you’re championing sustainability and all those things without actually doing it. And I know that SAP has strengthened their own commitments to ESG, announcing that they’ll accelerate the company’s goal to achieve net zero emissions across the company’s value chain by 2030, that’s 20 years earlier than originally expected. So tell us a little bit about that if you would.
Jeff Harvey: That’s 20 years earlier than the stated objective that they wanted, the scientist, by 2050 to be net zero. So it’s something that we think about and how we’re executing and what we’re doing, and it’s everything from travel, transportation. We don’t have factories per se, so most of what we produce is through office facilities, it’s through travel, it’s through being in the field, and that’s necessary to be with customers and to support them. But there’s also other ways we can offset that, planting trees, giving back, doing things responsibly in the communities that we live and work. And so that’s a conscious effort by SAP, reduce the travel footprint, reduce our contribution air, and then offset that by other green ways that we can to plant more trees that you can hug in the future as well.
Shelly Kramer: I think that sounds great. And I do think I’m one of those eternal optimist and one of the things that I feel like was a silver lining that came, many silver linings came as a result of collectively weathering and navigating a global pandemic, is that we learned that we can do things differently and it’s okay. We learned that we don’t have to get on a plane or a train or in an automobile every single time we want to meet with one another, and we learn that we can have events and we can attend events that are virtual. There’s so many things we learned that shifting to the cloud, oh, guess what? It’s not as tricky as we thought it would be. And so all of those accelerants of digital transformation that happened in the course of a pandemic I think were good for us in many ways. We learned a lot about ourselves. We learned things that we thought we couldn’t do that we actually can do.
Jeff Harvey: You’re absolutely right. I could not agree more.
Shelly Kramer: One of the things I’d like to talk about now, and I have had an amazing opportunity to be introduced to work alongside many of the amazing partners in SAP’s partner network. And I know there are some fantastic sustainable solutions, sustainable partner solutions that can be found in the SAP store. I will include a link, by the way, to the SAP store in the show notes here. But I’d love for you to tell us about just a few of those partner solutions that are particularly exciting.
Jeff Harvey: There are so many, and we are so lucky to have the partner ecosystem that we do and that they are as committed as they are, and they’re building innovation for our customers to adopt. We’ve got almost a half a million customers today globally and an even larger partner ecosystem that they’re building solutions on the platform that extend the value of the SAP portfolio and help drive more value for customers in doing. On the SAP store, like you mentioned, there are dozens you can find. Let’s talk about three of them here, CARBON.AI by VASPP Value Added Software Products and People is the name of the company. It’s Carbon AI Dashboard. It gives visibility into carbon emissions across the entire value chain. So it’s exactly what we were talking about, how do I know where I’m at unless I can measure not just my contribution as company, my four walls, but across my value chain, including manufacturing, raw materials, energy usage, and transportation, that’s incredibly powerful and it’s part of the footprint to start to get a handle on what you’re doing and where you want to go.
EcoVadis is another one, supplier sustainability rating so that you can look at your supplier network and see how they’re doing and measure the performance of those large global supply chains end to end. And a last one, maybe the highlight, which is a fun one, I’m sure most people have bought shoes online. I know I have and you always wonder how’s the size going to be? Is it the right fit or not? It’s a brand I haven’t bought before. There’s a digital shoe size consultant by Footprint Technologies, which will hopefully help minimize size related returns in your online shopping experience. Rather than buying two, knowing you’re going to try one and definitely return one, maybe both, hopefully you’ll buy one, keep one, and cut down on the carbon emission. So those are just a few. And there’s a new sustainability filter in the store as well to make it even easier for you to find those solutions that are specifically targeted on sustainability and that can help you in your industry and your enterprises.
Shelly Kramer: By the way, I’m so excited about the digital shoe size consultant, because when you work with a retailer, anything that they offer up that takes the questions out of it, that makes the purchases easier, and again, I’m the person who cringes when I have to order things in multiple sizes and then I have to ship them back, and I actually think about what that footprint is, what that impact is, me times thousands of people doing the same thing. So that’s really very exciting. But I think that one of the things as we wrap this show that I want to share, we feel very strongly about this here at Futurum Research, and I think a lot of times organizations go down the path of trying to solve problems and trying to solve problems from a strategy standpoint and also from a technology standpoint and they feel overwhelmed and it’s like, “I don’t know where to start. I don’t know what to use. I don’t know, whatever.”
And I think that it’s really important. I think that success today depends on the strength of your partner ecosystem and understanding that when it comes to sustainability and other things, but sustainability is what we’re talking about right now, is that you don’t have to build it yourself. You don’t have to reinvent the wheel. You don’t have to even figure it all out yourself. There are amazing partner companies that are available that can help. And when you work with strategic partners, what they bring to you in your organization is they bring all of the insights and all of the learnings that they have in executing for other clients and they bring all of that knowledge and expertise into helping solve your problems and helping you develop your strategy.
So I think that’s really important when it comes to, again, 2050 can seem overwhelming, back it up, don’t think in terms of 30 years from now, think of it in terms of what can I do today and tomorrow and the next three to five years and that sort of thing. But I think really understanding this vast network of partners that exist certainly in the SAP ecosystem, so much expertise, so many different solutions, and I think that that’s really important is you don’t have to go it alone.
Jeff Harvey: Absolutely. It’s a big topic and like any big topic you need some partners with you to get after it as quickly as you possibly can. So we’re here, our partner ecosystem is here and we’re here to help. It’s ultimately about the business outcome that we want to help our customers achieve. It’s not about the technology that you use to do it, but it’s more about the outcome and helping you get after that outcome as quickly as possible, and the sooner you do the better you are for it, and we can get off onto the next problem that we want to help you solve, so all good.
Shelly Kramer: All right. Well, Jeff Harvey, SAP, thank you so much for joining me today. I knew it was going to be a fantastic conversation. It was. In our show notes, I will include a number of things. I’ll include a link to Jeff’s LinkedIn profile in case you want to reach out and connect with him. I am sure he’s happy to answer any questions or point you in a direction that you might need to be. I will include links to cool things like the new sustainability filter that Jeff mentioned. I’ll include some links to specific partners within the SAP partner system, you can find those in the SAP store, and there’s also some data sources here that I’ll include some links to, some different things that we talked about. So the show notes here will be filled with lots of different resources for you. But with that, Jeff Harvey, thank you so much for joining me. I appreciate it. And I look forward to our next conversation.
Jeff Harvey: Thank you, Shelly. It’s been a pleasure and I do as well. Have a great rest of your day.