Imagine you are setting out for a hike in the mountains. Your goal is clear: you want to reach the summit. However, without a hiking map, you run the risk of not taking the optimal route. The situation is similar with corporate sustainability.

Here too, SAP’s goal is clear: We want to improve the processes of the global economy and people’s lives through more effective sustainability measures. The question is: How do we navigate this challenging terrain without losing our way?

The challenge: deriving action-relevant insights from sustainability metrics

Corporate sustainability reporting has changed significantly in recent years. However, many companies still face the fundamental challenge of deriving insights from complex data about their environmental and social performance that can drive strategic change.

Sustainability metrics such as “0.15 micrograms of fine dust per cubic meter” or “five liters of water consumption” are scientifically correct, but are difficult to interpret. This is particularly true for decision-makers who are less familiar with the topic of sustainability. Just as hikers depend on a reliable navigation system, it is important for companies to have a consistent language with which they can translate different sustainability metrics into comparable, action-relevant insights.

Here comes Impact Measurement and Valuation (IMV) comes into play, a method for measuring and evaluating the impact of business activities.

The approach: How impact measurement and evaluation transforms complex data into business-relevant insights

SAP’s IMV approach includes three steps.

First step: Establish a language that everyone can understand to assign a monetary value to social impacts

The IMV framework quantifies the costs and benefits of business activities to society and the environment. The basis for this is the ESG (environmental, social and governance) data that many companies already disclose in their reports. These are converted into a monetary measure (e.g. euros or US dollars).

Applied to hiking in the mountains, this means using precise GPS coordinates that everyone can understand instead of vague directions. When sustainability metrics are presented in a common unit, companies can clearly see where they stand, assess trade-offs between different sustainability dimensions, and compare their results with other companies in the same way as financial impact.

For example, a monetary value can be assigned to the environmental impact of greenhouse gas (GHG) emissions by multiplying a company’s reported emissions by the Social Cost of Carbon (the subsequent costs of greenhouse gas emissions to society). This was in 2025 $244 per metric ton of CO₂e. This turns abstract data into clear, meaningful signals so that companies can compare the impact across different ESG and financial metrics. This clarity enables companies to specifically promote the sustainability initiatives with the greatest impact – i.e. the initiatives that make the greatest contribution to the implementation of GHG emissions reduction targets and at the same time enable an assessment of the financial and sustainability-related return on investment.

Second step: Determine the relative position to compare your own performance with that of other companies

Knowing your exact location means you need a reference point to be able to analyze your performance compared to others – similar to trail running, where runners not only make it to the summit, but also want to analyze their performance along the route. Their GPS shows them where they are, but to improve their performance they need to compare their data with that of other runners.

Impact benchmarks complement impact measurement and evaluation by providing reference values ​​that provide insight into a company’s sustainability performance compared to other companies in the industry. These benchmarks allow companies to analyze their performance and determine whether they are performing better, worse than or on par with other companies. On this basis, they can make decisions to achieve the greatest possible positive impact through further improvements.

Third step: Identify hotspots with a view to maximum effectiveness

The global sustainability agenda requires immediate and targeted action. Combining IMV and impact benchmarks can provide data-driven insights that reveal where a company can best work to increase positive impact and reduce negative impact.

For example, these insights have helped SAP in its human rights risk assessment and dual materiality analysis to identify key sustainability issues, critical stages in the value chain, and high-risk countries or industries. This approach uncovers ways to achieve long-term competitive advantage through better sustainability performance and sheds light on risks such as supply chain vulnerabilities and regulatory risks.

Moving forward together: Creating lasting change through collaboration

SAP has adopted the IMV methodology as a founding member of the Value Balancing Alliance (VBA) introduced. This non-profit alliance of multinational companies is committed to establishing a globally accepted system for accounting and managing sustainability performance. In collaboration with the WifOR Institutea scientific research organization focused on impact assessment, SAP analyzed its societal impact (first step), contextualized its performance using industry benchmarks (second step), and integrated these findings into its core reporting and governance processes (third step).

This collaborative approach ensures that the data that informs SAP’s sustainability strategy is independent, credible, and scientifically verified, improving both internal decision-making and transparency for investors and external stakeholders.

“Impact measurement and evaluation forms the scientific basis for sustainability management. This enables companies like SAP to look at their impacts holistically and prioritize decisions based on statistical data.”

Dr. Richard Scholz, Head of Impact Analysis at the WifOR Institute

The results: What SAP’s analysis provides information about and how it promotes strategic decisions

The chart below shows SAP’s sustainability performance compared to industry benchmarks (result of the second step). The analysis covers SAP’s entire supply chain, from direct suppliers to sub-suppliers, as well as SAP’s own business activities. A methodology is currently being developed to measure downstream impacts that arise, for example, from the use of our software.

The analysis identifies both positive and negative impacts. Areas where the negative impact of SAP is greater than the industry average are highlighted in red. This will identify areas that should be given priority in mitigating negative impacts. On the other hand, smaller negative or larger positive impacts suggest higher ESG performance.

The most important results at a glance

• Social performance: Different results regarding living wages can be derived from the supply chain data. While most supply chain workers are paid above the living wage threshold and can therefore be attributed to the positive impact, the analysis also highlighted areas of risk and enabled SAP to take targeted action. SAP’s human rights team has therefore developed and implemented risk mitigation strategies in collaboration with procurement, suppliers and various stakeholders. Based on the IMV data, targeted measures could be taken for the highest risk countries, industries and suppliers to drive improvements in particularly important areas.
• Ecological performance: The results in terms of greenhouse gas emissions show that SAP is making great progress towards achieving its goal Net zero target has made. Positive results were achieved both in reducing direct emissions through our own business activities and in reducing emissions in upstream processes. Although water consumption is not considered a material impact for SAP at the Group level, we take action on identified local hotspots through local environmental management programs. This includes, among other things, site-specific water management measures with which we ensure responsible use of resources.

Lead by example

As a global technology company whose systems process the majority of the world’s business transactions, our solutions support customers on their journey to positive impact. We want to set a good example.

With our approach to sustainable business management, we want to bring about positive changes in the economy, environment and society while respecting the limits of the planet and human rights.

To achieve these goals, SAP relies on instruments such as impact measurement and evaluation. They allow us to evaluate and prioritize the most leveraged actions to maximize our positive impact and mitigate our negative impact.

“Sustainable transformation is only possible if we make our decisions based on reliable data. With the IMV methodology, we ensure that sustainability becomes measurable, comparable and achievable. This allows us to create transparency, set clear priorities and take responsibility. By focusing on areas where we can have the greatest positive impact on our company and sustainability, we ensure that our actions are both meaningful and effective.”

Matthias Medert, Global Head of Sustainability at SAP

The way into the future

We are making further progress on our path to impact-based decision-making. Just as hikers use navigation devices to navigate challenging terrain, we use impact measurement and evaluation as a guide to help us achieve our sustainability goals step by step.

We would like to expand this methodology in the future, contribute to cross-industry standardization and promote collaboration between different interest groups to accelerate the introduction of impact-based decision-making processes in global value chains. With our cloud solutions for sustainable business management, we support our customers in managing their impact.

We are guided on our journey not only by key figures, but also by clear goals. Impact measurement and evaluation provides us with actionable insights that show us the way to a future in which sustainability and business success go hand in hand.

Iris Konrad is a Senior Sustainability Specialist at SAP.