BERLIN (Reuters) – SAP SAPG.DE will try to allocate 5% of its procurement spending to social enterprises and diverse businesses by 2025 to encourage greater social and environmental responsibility.
The German software group, which has 440,000 clients, appealed on Tuesday to other companies to join it in supporting small businesses owned and run by women or minorities.
SAP’s procurement initiative follows its launch in June of a product to help firms track greenhouse gas emissions in supply chains, backing a view that being transparent about their carbon footprint will be good for business.
The new initiative relates to so-called addressable spend, the share of a company’s procurement budget that can be allocated to social or diverse enterprises, which in SAP’s case equated to up to $60 million a year.
“We all need soap in our washrooms, landscaping for our offices, food and drink in our cafeterias, marketing services and office supplies. These and many more are all products and services provided by social enterprises and diverse businesses,” SAP board member Adaire Fox-Martin said.
“This is money we are spending anyway. Why not spend it with suppliers who are delivering social impact as well?”
Reporting by Douglas Busvine; Editing by Alexander Smith