For many companies, ongoing economic instability and geopolitical conflict, combined with the lingering impact of COVID-19, are bringing into focus the need to ramp up organizational efforts in environmental, social, and governance (ESG) programs. SAP is no different.

At a recent SAP Social Responsibility Town Hall, Robert Richardson, Strategy Advisor, Human Experience Management, SAP, discussed the importance of ESG programs to SAP, laying out the benefits ESG programs can deliver and providing an insider’s look at how SAP software can help customers adopt and support their own ESG practices. Richardson also discussed how the latest developments in artificial intelligence (AI) could enhance social responsibility.

As part of its ESG goals, SAP is pursuing a “Chasing Zero” approach to sustainability that focuses on achieving “zero emissions, zero waste, and zero inequality,” according to Richardson. Built on the premise of holistic steering and reporting—through which organizations can add a green and social dimension to financial reporting—the company has launched sustainability-focused solutions like SAP Sustainability Control Tower, allowing customers to set targets, monitor progress, and gain actionable insights from sustainability business data.

As Richardson explained in the ASUG webcast, SAP is chasing zero emissions with climate action by enabling customers to manage their environmental footprint (including compliance, regulations, and carbon trading); zero waste with a circular economy approach (through which customers can redefine design, production, demand and supply of products through their use cycles for reusability, waste reduction, and new value creation); and zero inequality with social responsibility (encouraging customers to safeguard equality and social equity across workforce, sourcing, and procurement areas).

According to Richardson, recent years have brought about a dramatic rise in consumers' attention to social responsibility initiatives. “All businesses have a responsibility to respect internationally recognized human rights,” Richardson noted, quoting the United Nations’ Guiding Principles on Business and Human Rights.

“I wouldn’t want to live in a climate desert any more than I’d want to live in a human rights desert,” he added. “So, it is important that we understand, as a business and as a community, that we all have a responsibility to respect internationally recognized human rights.”

Promote social responsibility with due diligence

Increased mandatory regulations on human rights and social responsibility represent a shift from what used be voluntary frameworks to more formal, global programs—from legislative bodies such as the UN and the EU—designed to encourage companies to conduct Human Rights Due Diligence (HRDD) across their value chains. Due diligence in this area can be described as an ongoing risk management process to identify, prevent, mitigate, and account for how a company addresses its adverse human rights impacts.

Ignoring due diligence to social responsibility can be risky. It can increase regulatory and compliance risks, erode productivity and innovation, increase volatile operating environments and supply chain insecurity, and impact reputation and access to capital. But by adopting HRDD, businesses will be in a better position to stay ahead of regulatory changes, build more resilient supply chains, attract and retain talent, and strengthen trust and brand among employees, consumers and society at large, according to Richardson.

Overcoming challenges with software

For those companies that operate across multiple regions, compliance correspondingly becomes more complex. “Regulations vary by market, and that makes compliance really challenging,” said Richardson. “What is true in Europe may differ in the United States.”

Compounding the difficulties of compliance is a general lack of social sustainability data, compared to financial data. The data available within an organizations’ business processes is typically distributed across multiple systems and requires manual collection and processing, according to Richardson. Organizational and stakeholder silos can additionally impede trust and collaboration, which in turn impacts preventive and mitigation activities.

To keep pace, businesses need software tools that can “flex” according to local regulations in all applicable markets, gather social sustainability data from across the value chain, and integrate that data into tracking and reporting systems, said Richardson. SAP Sustainability Control Tower can enable holistic enterprise-wide sustainability performance management. This product builds upon SAP’s previous sustainability-focused solutions, such as SAP Environment, Health, and Safety Management.

To address the social sustainability challenges that organizations face, SAP offers a full human-resources suite, SAP SuccessFactors, for recruiting, learning, and talent management. “The suite can help ensure that diversity, equity, and inclusion are part and parcel of your process, because it’s instituted by the software,” said Richardson. “It helps everybody do the right actions at the right time, ensuring fairness and human rights.”

To extend social responsibility upstream to suppliers, the SAP Ariba Supplier Risk solution can be used to gather, assess, and monitor supplier information to reduce risk and ensure compliance throughout organizations’ supplier management processes.

AI and Social Sustainability

Artificial intelligence is not new; SAP has been using AI technologies in its ERP software for years. But generative AI, which has exploded in popularity since ChatGPT made its mainstream debut, is poised to fundamentally change how we work as individuals and how businesses operate worldwide. The implications of this potential paradigm shift for social sustainability are significant, according to Richardson.

AI can help organizations advance social responsibility goals by improving productivity and ensuring fairer hiring practices; Richardson noted that an AI engine can auto-generate job descriptions in just minutes, comparing them against manually written descriptions to detect and eliminate potential bias. AI can also be applied to skills evaluations to ensure that a candidate’s skills are appropriately matched to job descriptions and rated appropriately by recruiters and hiring managers.

“Generative AI is going to make its way into our organizations, so it really does bear thinking about,” said Richardson. “It can provide enormous opportunity. We are already seeing new medicines and new therapies being proposed with the advent of generative AI. But we're seeing potentially massive risk at the same time.”

Companies like SAP have been exploring the ethical implications and risks of traditional AI and will continue to do so as generative AI and other emerging AI technologies take hold across industries. For some time, SAP has relied on an AI Ethics Council to review all of its solutions’ AI use cases and will continue to as technology evolves. This council focuses on ensuring that AI solutions are reliable and relevant to the market, and that they address real challenges in an ethical way that doesn’t introduce or overlook bias.

For more, review the slides for Richardson’s social sustainability town hall here.

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