Skip to Content

Sustainable Procurement

Making Our Supply Chain More Sustainable

A significant part of our social and environmental impact is delivered through our supply chain. That is why we work hard to find new ways to ensure that our procurement activities meet high sustainability standards.

This year, we have looked at the way we recruit our supplier base in order to increase opportunities for a wide range of businesses to compete for supply of products and services to SAP. We have also engaged with our suppliers to define higher standards of conduct, and to encourage new thinking when it comes to sustainability.

What We Buy and Where We Buy It From

At SAP, we consider our suppliers to be key partners in our business success. In 2016, we spent €4.8 billion in transactions with more nearly 19,000 suppliers worldwide.

Promoting Supplier Diversity

Including more diverse businesses – that is, minority enterprises defined by gender, ethnicity, disability, sexual orientation, age, religion, and other characteristics – into our supplier base has become a key priority for SAP. We believe that our commitment to an inclusive, bias-free culture in our workplace should be mirrored in our approach to our supplier base. In addition, through their flexibility and a high innovation potential, we believe that diverse businesses bring significant added value to SAP.

To address this, we developed a supplier diversity program this year. Driven by our Global Procurement Organization (GPO), the program is an integral part of our supplier management program. It strives to ensure that diverse businesses have a fair chance at competing for contracts and are treated equally with other SAP suppliers. Targeted to reach a 5% spend ratio for diversity suppliers in selected countries by 2020, the GPO will proactively involve diversity suppliers in selected categories in defined countries into our sourcing process.

Demonstrating our commitment to supplier diversity, SAP became a corporate member of the following minority supplier organizations in 2016:

  • Minority Supplier Development U.K. (MSDUK)
  • WeConnect International

Upholding High Standards Across Our Supply Chain

Today’s digital networks help us connect with an increasing number of global suppliers, quickly and easily. However, with supply networks becoming more complex, companies face even greater challenges in ensuring their suppliers uphold high ethical standards.

To help address this, we are developing an innovative SAP Ariba solution for supplier risk management that enables companies to identify and manage their response to a range of supplier-related risks. Our GPO is collaborating with the SAP Ariba product development teams to finalize and implement this cloud solution. With the SAP Ariba Supplier Risk Insights solution, organizations can establish due diligence, ongoing monitoring, and remediation processes to proactively address risks across the source-to-pay process and the full supplier base.

This innovative solution provides buyers with a command center that helps them monitor all relevant risk information. It also offers daily alerts and notifications to buyers based on their preferences. Sustainability risks covered by the solution include unethical practice, workplace discrimination, workplace safety neglect, the use of child labor, human trafficking, and environmental disasters such as oil spills and radioactive contamination.

In addition, our GPO worked on a pilot project with the SAP Ariba team and the Made in a Free World organization to identify the areas of greatest risk of forced and child labor in our supply chain. As part of this project, we requested information about our suppliers’ supply chains and analysis of this data is helping us to pinpoint potential risk areas for further investigation.

We are also strengthening the enforceability of the code of conduct for suppliers and it is now an integral part of our standard contracts. It is also included in our global terms and conditions.

Driving Innovative Sustainability Projects

SAP works closely with suppliers to find new ways to make our supply chain more sustainable. We have a number of ongoing projects that minimize our impact on the environment in areas such as enterprise mobility, catering, office supplies, and SAP events.

Our chief procurement officer and chief sustainability officer meet each quarter to discuss progress and challenges related to embedding sustainability in our procurement practices.

Back to top