About This Report
Why Integrated Reporting?
Why publish an integrated report?
This year, for the first time, we are publishing an integrated report – meaning that we are combining the SAP Annual Report and the SAP SustainabilitysustainabilityFor SAP, sustainability is the ability to manage economic, social, and environmental risks and opportunities holistically for increased profitability. It contributes to our vision to make the world run better and improve people’s lives. SAP is committed t... Report, which enables us to highlight the connections between our financial and non-financial performance. We believe that this shift holds both practical and symbolic importance. First, we are signaling that the business landscape has changed, and the information needed to evaluate performance must change with it. Considering our past financial results and our financial outlook alone does not adequately capture our ability to respond to today’s challenges or how we create value. Instead, our future success hinges on how well we holistically navigate the social, environmental, and economic contexts in which we operate.
Working to shift from a sustainability strategy to a sustainable strategy
We believe that we must evolve our corporate strategy to reflect the interconnections between these realms. We speak of this vision in terms of moving from having a sustainabilitysustainabilityFor SAP, sustainability is the ability to manage economic, social, and environmental risks and opportunities holistically for increased profitability. It contributes to our vision to make the world run better and improve people’s lives. SAP is committed t... strategy to creating a corporate strategy that is sustainable. To ensure our future success, we must create solutions that enable our customers to thrive. This means addressing the major trends and issues of our time – from the pervasiveness of mobile technology to the pressures of population growth, the worldwide expansion of the middle class, the unprecedented power of people to connect, and the stress on ecosystems and other natural resources.
Integrated thinking leads to innovation – and better business
In short, our business success hinges on our ability to respond to these challenges and opportunities through our technology and customer solutions – thereby helping the world run better and improving people’s lives. We are driving innovation in ways that ensure our future relevance and viability by supporting transformational change. For us, this means going beyond creating new efficiencies. In fact, we are reframing how we approach problems and design solutions.
An integrated report both facilitates and reflects this new way of thinking. It challenges us to consider the connections between our financial performance and our management of natural and human resources; it demonstrates how actions in one area impact another. Our four global corporate objectives speak to this need for balance: Two focus on our past financial performance (growth and margin) and two on non-financial measures that capture our ability to perform in the future (customer success and employee engagement). Ultimately, integrated thinking – and reporting – reveals new possibilities for creating value in a holistic sense, bringing us closer to serving our business and society through one cohesive strategy. In our view, companies that create this type of value will be in the best position to lead in the 21st century.
Greater transparency and insights for our customers
In addition to supporting a new framework for the future, integrated reporting helps us achieve several other important goals, including:
- Increased transparency – With the pace of change accelerating, consideration of our social and environmental impacts mitigates the risks we face as a business, such as the prospect of economic downturns, natural disasters, the loss of talent, or reputational damage. In addition to helping to ensure that we remain viable in the future, incorporating this broader view into our strategy also enables us to create greater value, as we anticipate the evolving needs of people, businesses and communities throughout the world. Full transparency, therefore, demands that in addition to reporting on both our financial and non-financial performance, we must indicate how we are exploring the connections between the two.
- New insights for our customers – In order to successfully help our customers navigate a changed world, we must do so ourselves. We have set ambitious goals to improve our own environmental, social, and financial performance and continually drive our innovation to meet them. In turn, we can incorporate these innovations into the solutions that we provide to our customers. Because integrated reporting is still relatively new, we expect to gain valuable insights from our early adoption of the concept that will help guide our customers on their own path.
- Greater reporting efficiencies – As investors and other stakeholders have sought increased information about non-financial performance, reporting has expanded but not necessarily become clearer or more streamlined. By combining all reporting in one place, we can tell a more logical and connected story. In addition, we do not need to duplicate processes internally, leading to greater efficiency and more unified thinking.
- Thought leadership – No one company has all the answers about taking an integrated approach. We have always viewed our reporting as part of a broader conversation. For this reason, we are a member of the International Integrated Reporting Council (IIRC) pilot program, which supports the IIRC in creating a globally accepted framework for integrated reporting. We have sought to adopt its principles, such as the need to find connections between our financial and non-financial performance, take a long-term view, and report on both positive and negative results. We see great value in sharing our insights and listening to others as we explore new approaches. A reporting framework that serves one company will also benefit many others, including our customers, and we remain committed to an open exchange with others.