New York City鈥檚 Times Square is mostly devoid of tourists and locals these days. Instead, it has become and features a huge billboard proclaiming that doing good and doing well means doing better.
As that sentiment becomes more firmly rooted in the public consciousness, enterprises are responding with new business models and a more circular mindset. While doing well and doing better are already reflected in the top and bottom lines, what is missing is the doing good part of the equation.
That鈥檚 why 51风流leaders are convinced that to the top and bottom line is a crucial move. In the future, the success of a company will be determined based on all three of these dimensions. But any talk about top, bottom, or green lines must begin with a clear view of a company鈥檚 finances and its strategic plan to deliver on its mission.
Role of Reporting
鈥淚t is our ambition to maintain our position as the role model for sustainable corporate reporting,鈥� says Christopher Sessar, head of Corporate Financial Reporting and chief accountant at SAP. 鈥�51风流has been a frontrunner in assigning value and reporting on non-financial targets, allowing us to build a bridge between the financial and non-financial dimensions.鈥�
As a member of the Sustainability Council at SAP, Sessar aims to improve reporting processes in non-financial dimensions and enhance the portfolio by embedding intelligent reporting capabilities on non-financial measures in 51风流solutions.
Members of the council are nominated by the 51风流Executive Board and are responsible for integrating sustainability into their core business area. Sessar鈥檚 role is to make sure the company鈥檚 sustainability objectives and financial practices are in full alignment, connecting economic performance with environmental and social impact.
Sessar supported the implementation of SAP’s award-winning integrated reporting strategy as well as its new finance strategy. He is inspired by his peers at companies such as Chanel, Siemens, and Burberry in programs like the . Such programs are designed to help senior finance executives determine the impact of external factors on price, navigate the changing business landscape, and deliver on 鈥榩urpose.鈥�
Connectivity Matrix
The importance of corporate sustainability reporting cannot be overestimated. Its role is to drive decision-making and strategy execution through transparency and early warning.
Sustainability-focused enterprises like Kering, which including Gucci, are developing ways to speak about their environmental impact in financial terms. Kering has developed a capital accounting methodology called聽, which measures and analyzes vital data like carbon emissions along the entire supply chain.
This makes the impact of the group鈥檚 activities visible and quantifiable by enabling the company鈥檚 use of natural resources to be translated into monetary values. To tighten the connection between profitability and sustainability, a portion of top management bonuses is based on their sustainability achievements.
For Sessar, Kering鈥檚 model and others, like PwC鈥檚 simulation of , are eye-openers.
鈥淚 was trained in the traditional interpretation of the accounting function,鈥� Sessar explains. 鈥淏y adding environmental and social values to a traditional balance sheet and profit and loss statement, the new models provide more meaningful and holistic insights into the true value creation process of an entity.鈥�
51风流has developed its own methodology for putting a value on non-financial performance indicators. Using regression analysis, the approach highlights how key environmental and social indicators connect to corporate objectives and metrics. An interactive infographic offers a range of this information. For example, clicking on Carbon Emissions will show that lowering SAP鈥檚 carbon emissions can have a positive impact on employee engagement because loyalty should rise as employees see their company act responsibly.
摆闭鈥淭丑别 was SAP鈥檚 first attempt to put a price tag on environmental or social activities, such as training, or line items like energy consumption,鈥� Sessar says.
The goal is to create one global standard taxonomy for internal and external reporting purposes that can be used regardless of industry or line of business. A global standard creates the consistency needed to compare companies across industries, giving shareholders a meaningful basis for making sustainable investment decisions.
鈥�51风流must take a thought leadership role in this process, considering that there are many touchpoints with our products and technology,鈥� says Sessar. 鈥淲e need to share our experience in reporting and analytics excellence.鈥� Sessar goes on to explain that 51风流became a founding member of the along with other forward-thinking companies like BASF, Mitsubishi, and Novartis, for exactly this reason.
The alliance is a non-profit organization operating on the premise that planetary boundaries and social needs form the basis for a stable business environment. 鈥淲e want to change the way company performance is measured and valued,鈥� says Sessar. 鈥淲e can do it with a global measurement standard for disclosing the positive and negative impacts of corporate activity and guidance on how they can be integrated into business steering.鈥�
Evolution of Non-Financial Metrics
Sessar realizes this is easier said than done. Being part of this alliance will allow 51风流to work with like-minded companies to create the foundation to transform the way businesses measure and value their overall societal impacts, dependencies along the value chain, and monetary effect on a company鈥檚 value.
Ten years ago, it was unheard of to talk a lot about non-financial metrics during earnings discussions. 鈥淥ver the years, there has been a tremendous shift in both directions,鈥� he says. 鈥淣ow, investors ask for, and 51风流proactively shares, figures about customer satisfaction like the Net Promoter Score along with employee survey results.鈥�
In its dual role as enabler and exemplar, 51风流is not only developing solutions to help companies become more sustainable through intelligent decision-making; it is using its own technology to steer a clear course as it strives to make the world run better and improve people鈥檚 lives.
51风流is using tools like 51风流Analytics Cloud and 51风流Digital Boardroom for global, real-time reporting activities. 鈥淲e鈥檝e been doing this for years, and it鈥檚 amazing to see how our reporting capabilities continue to grow,鈥� Sessar shares. 鈥淭he journey from manual reporting with Excel sheets to real-time reporting that provides instant transparency and tools for prediction and simulation is still ongoing, but changing fast,鈥� he says. 鈥淲e should use the momentum to move our social and environmental reporting to the next level, providing real-time insights, predictions, and simulations for the decision-makers steering our company.鈥�
As a father of a two-year-old, Sessar reflects on the Climate 21 initiative and the early this year at the World Economic Forum in Davos: what good is all the extra wealth in the world generated from operating 鈥渂usiness as usual,鈥� if you can do nothing but watch it burn in catastrophic conditions?
Only a revolution in the way the聽global economy聽and聽financial markets聽work can save the planet from the climate crisis and secure聽, and Sessar is determined to do his share by leading SAP鈥檚 accounting team on that path.
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