Startups Are Key to SAP’s Sustainable Enterprise Vision

SAP has a corporate goal to drive toward Zero Emissions, Zero Waste, and Zero Inequality. It’s nurturing 75 sustainability-oriented startups through its SAP.iO Foundries accelerator, focusing on everything from food to fashion.

Food giant Dole Sunshine Company has a goal of zero fruit loss by 2025, as its products move from farms to supermarkets. That will help reduce food waste that contributes to climate change and greenhouse gas emissions. So recently Dole started using artificial intelligence-powered computer vision software to help automate visual inspection of pineapples. The software, which came from a startup called Clarifruit, helped Dole reduce spoilage and double its productivity in inspecting fruit. But it only happened because enterprise powerhouse SAP, whose own software the inspection data flows into, is itself so deeply committed to sustainability and climate action.

Clarifruit is one of 75 sustainability-oriented startups that have been nurtured as part of SAP.iO Foundries, the German software company’s global network of external startup accelerators. As part of the program, SAP first integrated Clarifruit’s inspection tool with its SAP S/4HANAsolution that sits at the heart of Dole’s production system. Then SAP introduced Clarifruit to Dole.

SAP has a corporate goal to drive toward Zero Emissions, Zero Waste, and Zero Inequality—three critical aspects of sustainable business. And the enterprise software company’s footprint in global business and manufacturing software is unparalleled, especially in corporate finance, production systems and supply chain management. About 450,000 companies use SAP, with it playing a role in 87% of the world’s total global commerce. The software company came to climate consciousness early, partly because it was founded and is headquartered in Germany, where green issues have long been of huge concern. A full decade ago, for example, SAP moved responsibility for tracking its own sustainability data to the chief financial officer, to be reported alongside financial metrics. It was one of the world’s first large companies to do so.

“When you partner with SAP you get the scale to help make the world sustainable,” says Kange Kaneene, who oversees SAP.iO’s 3 accelerators in North and Latin America. The global program has helped a total of over 400 startups in 11 locations scale their businesses. SAP.iO Foundries provide technical and go-to-market support to help startups integrate with SAP and become part of a curated ecosystem where their offerings are easily accessible to SAP customers.

For many reasons, companies are finally taking climate and sustainability seriously as part of their core business processes. For one thing, data increasingly shows that consumers want sustainable and climate-friendly products. “ And we’re seeing higher margin for sustainable products,” says Jim Sullivan, Global Head of Product Management for SAP Sustainability. He adds: “And then the best and the brightest want to work for companies that share their values.” In fact, working for a sustainable business is the number one career priority among millennial and Gen Z job seekers, according to Sustainable Brands.

Its integration with almost all the world’s supply chains makes SAP uniquely able to productively partner with climate-conscious companies. Sullivan, a former EPA staffer who talks more like a climate activist than a corporate executive, says “If we look at solving the climate crisis as a society, it’s about 55% an energy transition problem…but almost half is a material flow problem.” And material flow is, of course, managed via business value networks. Sullivan, for all his knowledge and passion, is no outlier at SAP when he explains, “Business operates within the bounds that society sets, and society operates within the bounds of our planet.”

Vivek Bapat, another top company leader with an impressive passion for climate action, explains why SAP is so well positioned. “Most climate-related changes now are the result of human activity, and a lot of that relates to the way we’ve been running industrial businesses for the last 50 to 100 years,” says Bapat, senior vice president for SAP Purpose and Sustainability Marketing and Solutions. “So if business truly is the vanguard of where the problem-solving can occur, what is SAP’s role in solving the problem?” His answer: “We need to provide the transparency into the kinds of emissions that companies and their value chains are responsible for.” He goes on: “Both financial and non-financial data is required, and all that understanding of where you may be today is either sitting in an SAP system or can be accessed through an SAP system. That gives us an advantage to help companies assemble and combine non-financial and financial data, put it in a form they can understand, and then operationalize directly into their business processes.” Most importantly, he concludes, this data can take customers beyond spreadsheets and CO2 averages–where even most earnest companies still find themselves today. “We can help them gain insights into granular, authenticated data required for regulations but also enable them to execute business process improvements across their supply chain or even their business networks,” Bapat says. Helping with this is urgent. A recent SAP-supported research study found that only 16% of companies have well-established policies for working with vendors and suppliers around emissions management.

Which brings us back to SAP.iO Foundries and all those startups. “We’ve specifically scouted for startups that are offering solutions in climate that affect our customers,” says Max Kahn, who leads strategy, ecosystem development, and marketing for SAP.iO Foundries. SAP.iO Foundries brings in cohorts of startups based around themes. The most recent one in New York, at SAP’s impressive offices overlooking the river in Hudson Yards, was focused on sustainability for consumers and retailers. “First we go out and source startups,” says SAP.iO’s Kaneene. “We have a pretty big funnel, looking at about 700 or so. But by the final round we end up with just between 6 and 10.” For the final “selection day,” Kaneene brings in executives from SAP’s customers to help ensure the startups that win are relevant. For this round, leaders sat in from Unilever, Home Depot, Red Bull, and Levi’s, among others.

The majority of those 75 sustainability-focused startups that have gone through SAP.iO are now integrated into SAP’s flagship S/4HANA ERP software. One example is Queen of Raw, a New York-based company focused on one of SAP’s top priorities–the circular economy. Queen of Raw helps fashion companies reuse excess fabric stock instead of discarding it. A fashion brand that tracks its inventory inside SAP can now audit its leftover fabric and list it on Queen of Raw’s marketplace, where niche labels or students, for example, can find and purchase it. Queen of Raw’s founder, Stephanie Benedetto, grew up in a fashion industry family and knew painfully well how much fabric has historically been wasted, and the consequences of that in unnecessary water use and other inefficiencies. “I’ve seen a lot of founders with similar stories,” says Kahn, “where an experience in their personal or professional life drives them to want to build something new.”

Another SAP.iO graduate helping customers save energy and emissions is Ivaldi. It creates libraries of digital designs and works with a global network of 3D printing facilities, so an airline or heavy equipment company can get replacement parts made locally, avoiding the emissions that come with shipping as well as often speeding up the availability of the part. Other SAP.iO companies do things like help companies optimize routes for delivery and service vehicle fleets.

“SAP is uniquely qualified to actually offer an ecosystem of sustainable solutions in a real way,” says Kaneene, “We’re trying to help our customers really become sustainable companies.” In building its growing ecosystem of vetted and integrated startups, it’s adding quickly to that capability.

For more on SAP’s sustainability solutions and software, visit their portfolio here.

Learn more about SAP.iO Foundries here

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