Sophia Mendelsohn, the chief sustainability officer at SAP, has been involved in sustainability for many years, dating back to her time studying the subject at Harvard. She became passionate about sustainability after seeing the extreme pollution in China during her first job. Mendelsohn recognized that in order for companies to change their practices, there needed to be economic incentives. She understood that workers wanted upward mobility, companies wanted profits, investors wanted returns, and consumers wanted cheap goods. Any sustainability initiative would have to consider these factors without negatively impacting them.
Throughout her career, Mendelsohn has held various chief sustainability officer roles at companies like JetBlue and Cognizant. She believes that sustainability has evolved from being seen as a nice-to-have environmental concern to becoming a financial imperative. Investors are increasingly concerned about transparency, stranded assets, and physical climate risks that could impact their investments. This has prompted action from companies beyond mere press releases, with boards of directors seeking guidance on how to protect their companies from the risks of climate change.
As part of SAP, Mendelsohn acknowledges that the company is both part of the problem as a high-tech company and part of the solution as a provider of supply chain management systems. She is exploring ways to leverage the data within SAP applications to help companies adopt more sustainable practices.
SAP itself is committed to sustainability, aiming to be carbon neutral by 2030. In its 2023 Environmental Performance report, the company announced that it had achieved net-zero carbon emissions in its own operations through a combination of purchased renewable energy attribute certificates, self-generated renewable energy, and carbon offsets. However, carbon offsets have a mixed record, with some projects overestimating their impact or being fraudulent.
SAP claims to invest only in highly-rated carbon offset projects but does not disclose the proportion of its net-zero goal covered by offsets. The company relies heavily on offsets due to the scope 3 emissions produced by its products and services, which are outside its direct control. While SAP includes annual carbon emissions targets in its executive compensation formula, it accounts for a relatively small percentage.
The challenge for Mendelsohn is to engage non-European customers and convince them of the importance of sustainability beyond mere compliance. This will be a difficult task, but as companies realize that sustainability is good for business, it will benefit both the planet and future generations.
