How to Address the Global Challenge of Climate Change

From what I understand, the cause of global warming is not that new. More than 100 years ago a Swedish researcher found that there is a link between CO₂ and carbon emissions and global warming.

Yes, in fact it’s 124 years ago, in 1896 when Svante August Arrhenius discovered that carbon dioxide causes increased temperatures.

So the obvious question is: Why has it taken us so long to take it seriously? 

It's an excellent question. This is what I also say – how long has the scientific community known that global warming is caused by greenhouse gases? The business world is only just catching up to the dramatic realities of climate change. Let’s take the example of cars. Over a 100 years ago, automotive industry was started with electric cars – and then in the early 20th century we began mass production of combustion engine cars as we know them today. Fast-forward to now, and we are returning to electric cars again. We have come around in a full circle! Of course, the automotive industry is just one representative example. So why has it taken so long? If we look at so many innovations in the last 200 years which started with industrial revolution, many have contributed to global warming. In fact, the responsibility lies with humans and the society at large which have created consumptions patterns which are unsustainable.

Due to the current COVID-19 crisis, this will perhaps change the perspective on this a bit faster and we might see the big tasks ahead a little more clearly. At SAP you already take this into account with the Climate 21 program. Please explain a little, how it started and where you’re standing right now.

Last December, Thomas Saueressig, Board Member and head of Product Engineering which is the development wing of SAP, has given us the mandate to go ahead with product definition to address climate change in the enterprise world. What we did to start with, was launch an analytics solution to analyze carbon footprint of a product. The vision of Climate 21 is doing product footprints to scale. I’m the lead in product management and have a team of experts and product managers who are creating persona-based, user stories and customer journey, working alongside our co-innovation customers. We are using the latest product definition tools, methodologies and frameworks to do that. And we work together with our engineering teams to code the requirements in sprints. The end result will be a cloud application in combination with SAP S/4HANA, our ERP application. In 2020 we began rolling out a multi-year product journey of our vision.

The responsibility lies with humans and the society at large which have created consumptions patterns which are unsustainable

It’s interesting that SAP is taking on this task because your enterprise applications have so much data. So, in some ways, it might seem pretty obvious to implement something like this.

Yes, SAP’s portfolio of products can cover all the business processes of our customers, from procurement to sales to production to supply chain and finance. And to be very honest, it is not that this has not been thought of before by us. SAP already has a portfolio of products on Sustainability for a long time. But there was no trigger or a compelling event like regulations that could have made a climate action and risk solution successful. But there is no denying the triggers now. The climate change has accelerated a lot, it is even being called as a climate emergency, and of course people are feeling and experiencing it. As we look back even just ten years, we have seen the hottest summers, biggest wildfires, milder winters globally. This is exactly why consumers, companies and governments want to take action now to address climate risks and companies are asking us to help them with corporate wide solutions, across their entire value chains – from cradle to grave. So yes, some eight or ten years ago, only a very few sustainability conscious frontrunners would ask for business solutions, now everyone wants to do something about it.

Is the definition of business success beginning to change? Previously it was only limited to ROI or TCO. Now there is also the concept of ecology and sustainability which are important metrics, right?

Yes, it's beginning to change. That is also what our mission for Climate 21 is – to embed sustainability as a new dimension of success into our business applications. It is really becoming a very strategic and C-level topic.

And still it’s also an issue for all of us in our private lives. There's a misconception that only the big industries are polluting the air. Yet 80 % of direct and indirect emissions are attributed to household.

Here, quoting Sir David Attenborough in 'Climate Change – The Facts’, that ‘We are facing a manmade disaster on a global scale’. We as humans have a big responsibility to solve the problem. The consequence of the pandemic has shown just how frail the human life is, so also is our planet. That said, just focusing on the big industries alone will not fix it. All individuals, like you and me, have to learn to live sustainably and buy and consume responsibly. My hope is that from the lessons learnt and reflections from the pandemic, will emerge the sense of purpose that climate action is indeed urgently needed.

That is what our mission for Climate 21 is – to embed sustainability as a new dimension of success into our business applications

I would agree. But at the same time, you're not going to get a handle on the problem through behavioral change alone. We also need tech solutions.

Yes, technology has a major role to play here. Again, taking the pandemic as an example. The sheer scale of suffering, the injustices and dangers it has revealed is unparalleled in our lifetimes. And the parallels and the consequences of what could happen are scarily similar between the pandemic and climate change, both being disasters on a global scale! The world’s response—where 2020 will be remembered as a time when everything changed. The pandemic has served as an engine of innovation, proved the resilience of the people, and especially the value of science and technology. To bring out a vaccine in less than a year in itself was unthinkable until we had to do it! It showed us once again, that when we as humans put our minds to solving problems, we can do incredible things. It has unleashed technology and digital innovations! We adapted and took our lives online this year, from teaching kids to working from home. The bottom line is, when we as humans apply our minds and imagine the possibilities, we can solve the toughest problem. That’s why I feel happy that SAP can contribute with our new Climate 21 solution offering, which is of course also technology based.

How does this link in with the shifting culture around work and collaboration? Do we need to change the perspective?

Good point and this change will have a deep impact on businesses, especially making their supply chains more resilient to future disruptions. There is a definite need for companies to collaborate within and between themselves to share and exchange relevant information to get the actual and appropriate product carbon footprints. Another aspect of collaboration is working with our co-innovation customers to define the product together to address their climate risks. My team with other units in SAP are working with companies in North America, Europe and Asia to identify their unmet needs. As it's a global problem, it is important to work across all geographies. Together we do product definition and requirement engineering of key concepts and validate and iterate them with customers again. SAP has deep industry experience with solutions for 25 industries and over 400.000 customers globally. Another important collaboration happens with our partners. We have a global ecosystem of over 22.000 partners with different core competencies and we work with them too.

What remains the biggest challenge in implementing the application?

We have experiences launching many new products, it is not so much a question of risk and also it’s why we validate the requirements up front with co-innovation customers. Then again, it's a new innovative product. And just like the launch of a new model of BMW or Mercedes – you just don't know till it is shipped. I have introduced many new products but this time, I see a big difference. Customers themselves are asking for solutions from SAP and are signing up to co-innovate and we see a lot of interest in our ecosystem of customers and partners. Another challenge is: will customers find value? Will they use it? The beauty of this new product is that it is a cloud application, developed in short sprints and fast releases. We can observe the usage of what features and functions customers are actually using, or which services are they consuming. The feedback loops are much shorter, and it is easier to course correct.

There is a definite need for companies to collaborate within and between themselves to share and exchange relevant information to get the appropriate product carbon footprints

How long have you been in this job?

I have been with SAP for over nineteen years. I started in Palo Alto, California, in SAP Labs. I was there for seven years and then transferred to the headquarters in Walldorf 12 years ago. I have always been in solution or product management role, and I find my work very fascinating and fulfilling. It has allowed me to experience technology, especially software industry in a very up, close and personal way. And see how innovations and exponential changes have influenced our lives deeply.

How do you find Germany is tackling things at the moment?

I’d say climate change is taken seriously and in a science-based approach in Europe generally. Issues are tackled taking a long term and holistic view across the EU. Germany has taken some dramatic decisions towards renewable energy like solar and wind in the past through the ‘Energiewende’ or energy transition policies. As painful as they may have seemed at that time, it has also shown the world how governments can change behaviors and shape societal thinking towards a more sustainable way. In fact, Europe and with Germany as strong active contributor, will lead the way even in the future to address climate change, as we are seeing with the European Green Deal.

Yes, for sure we have very high ecological, social and data standards. But on the other hand, I think we must open up more to innovation. We have to be quicker. What is your take on this?

I have a bit of a different perspective: Given my multi-country background, having lived and worked in 3 countries in 3 continents – India, America and Germany. One can always argue compared to Silicon Valley Germany is not quicker. But basically, each place has a certain culture. Let’s take Milan’s example in fashion. So why can’t we have a fashion hub in Frankfurt or Munich? It's because Milan has been the Fashion Capital over generations, since the 16th century, so to say, fashion is in their blood! So also, Silicon Valley has had this kind of comparative advantage and influence on technology and entrepreneurial spirit, since the start of this industry. And it's not as though Germany doesn't innovate. An excellent example is Germany’s manufacturing competencies rooted in its ‘Mittelstand’ – small and medium size companies. It is a global powerhouse in manufacturing by continuously innovating and reinventing in areas like Industry 4.0, robotics, process control and automation. These are deeply technical, technological and engineering innovations, which has allowed Germany to stay on top of the manufacturing game for so long in spite of global competition. And this translates to global brands which symbolize high quality products – from cars to precision machines. And not to forget: In IT we have SAP, which is a very unique global leader, and the only one of this scale in Europe, playing in the Big Tech league. Can you imagine the power of innovative thinking combined with global openness that happened here in Walldorf starting in the 70'ies? And now with the same rigor and innovative thinking, we’ve started to address the global challenge of climate change with the Climate21 initiative. It's my privilege to work for it and I believe it will have a huge impact in the corporate world, as all corporations get ready to engage on this topic. I’ll finish by quoting SAP’s own tagline and our purpose statement which is ‘helping the world run better and improving people’s lives.’ It completely fits!