Social Investment to Help the World Run Better Version No. 2.0 Full employee reach Date February 2, 2012
Table of contents 3.1 Areas of Focus... 6 The vast majority of social investments made by or on behalf of SAP must adhere to the following areas of focus:... 6 3.2 Financial CSR Investments... 6 3.2.1 Global Partnerships... 6 3.2.2 Regional, National and Local Partnerships... 7 3.2.3 Field Donations and Sponsorships... 7 3.2.4 CSR Donation Exceptions... 7 3.2.5 Evaluation... 7 3.3 Corporate-led Employee Volunteering... 8 3.3.1 Time Off for Volunteering... 8 3.4 Technology Donations... 8 3.4.1 Hardware... 8 3.4.2 Software... 8 3.5 Governance... 8 3.5.1 Global CSR Governance Committee... 9 3.5.2 Regional CSR Governance Committee... 9 3.6 Branding... 9 3.7 CSR Following Acquisition... 9 4.1 Financial CSR Investments... 9 4.2 Corporate-Led Employee Volunteering...10 4.3 Technology Donations...10 5.1 Partnership Proposals...11 5.2 Referenced Links...11 2
Cover Sheet Objective Rationale The Corporate Social Responsibility Policy (CSR) aims to ensure that our social investments are coherent and aligned to areas of focus and guidelines for financial investments, employee volunteering and technology donations demonstrate clarity in commitment with global alignment and local execution. As an information technology leader, SAP recognizes and embraces its commitment to the communities in which we operate. Our CSR vision is based on the philosophy that business should to help the world run better by improving people s lives. We believe the private sector plays a vital role in creating a level playing field and building an environment that enhances education for underserved youth and propels emerging entrepreneurs to foster economic growth. This, in turn, encourages them to take an active and rewarding role in developing vibrant economies, thereby fueling economic growth and innovation and lessening inequitable distribution of wealth in society. With increased demands from internal and external stakeholders on SAP to be accountable and to engage in responsible business practices, commercial and reputation stakes to be a responsible corporate citizen are high. Our social investments are based on setting clear targets, milestone reviews and quantifiable results. Inherent in this approach is that all corporate social responsibility activities must be conducted transparently. They must comply with internal policies such as our Code of Business Conduct and various non-solicitation policies, as well as with the laws and ethical standards, such as anti-bribery legislation. Why the benefits and strategy alignment In order to maximize our social impact, SAP has developed an aligned, focused and glocal model to our social investment strategy that leverages targeted financial investments, employee volunteering and technology donations in our areas of focus including education and economic opportunity. Primary business drivers to an aligned approach: Employee engagement Reputation management Business impact Primary intended results: Giving back and helping the world run better Reputational improvement Employee retention, recruitment & motivation Competitive differentiation Learning & innovation License to operate Risk of Non-compliance to SAP Reputational damage may occur when activities are chosen that do not reflect the values or priorities of SAP. Activities that are not aligned with the overall strategy are also a risk to a consistent brand image and the possibility of unlawful donations due to lack of sufficient compliance in CSR policy which could lead to regulatory investigations under anti-bribery laws. Applicability Primary group applicable to Corporate Social Responsibility team within Global Communications Extended team supporting CSR in SAP subsidiaries Indirectly Affected Areas SAP employees 3
Operating communities Marketing Finance Confidentiality Enforcement Public Document All SAP subsidiaries and lines of business are expected to fully comply with this policy and associated guidelines. Instances of consistent and continued digression from the policy directive will be addressed and escalated. Consequences of violation -- All activities that do not comply will not be funded nor will they receive communications/marketing support. Enforcement mechanism Global CSR Governance Committee, Regional CSR Governance Committees, Global Purchasing, Accounts Payable. Ownership Policy Owner Board Area Board Sponsor Board Area Contact Reviewers Approved by (Board Members) Brittany Lothe Co-CEO Co-CEOs Rick Knowles Melissa Lea, Global Policy Advisory Committee (GPAC), CSR Global Governance Committee (Hubertus Kuelps, Michael Junge, Rick Knowles, Peter Graf, Peter Rasper, Tracey Arnish) Document Information Master Document URL http://www.sap.com/about/csr/index.epx Release Date February 2012 Review / Update Due Date February 2013 4
1 Introduction SAP has both an opportunity and a social obligation to engage in strategic charitable partnerships in our operating communities and growth markets. Such engagements serve as a powerful beacon to all company stakeholders including employees, underlining SAP s commitment to business integrity and social impact beyond regulatory compliance. The guidelines describe the role of SAP as corporate citizen. They explain the areas of focus, set the standards and explain the different roles and responsibilities between Global Corporate Social Responsibility (CSR), Regional CSR and line of business activities. 2 Definitions Corporate Social Responsibility: Defined as a corporate commitment to contribute to improving the quality of life for our workforce, and society through the creation of economic opportunity. This is done by voluntarily undertaking intiatives to advance a cause, issue or nongovernmental organization (NGO) or non-profit organization (NPO) through financial investments, employee volunteering and technology donations. Donation: A donation is support for a charitable cause. In most cases this is a monetary support (ie financial CSR investment) or can be in-kind Technology Donations with no quid pro quo and is based on a mutually agreed upon funding proposal that has established goals, objectives, and milestones. Sponsorship: A sponsorship is funding provided and based upon a contract with benefits for SAP versus a donation that is aligned with the corporate social responsibility focus areas. Partnership: A partnership is developed as a result of a donation and is a longer-term relationship with SAP and a NPO or NGO. Technology Donations: Donations of hardware or software. Corporate Led Employee Volunteering: Ongoing corporate-led volunteer experiences that are aligned to CSR, serve as team-builds, strengthen employee skills, support skills-based volunteering, provide executive leadership and develop vendor and customer relationships in SAP s operating communities. Donor Advised Fund (DAF): Established within a charitable endowment or community foundation where the funding strategies remain under control of the donor who takes active role in donation making, recommending non-profit organizations to which they would like to make donations o o o Endowment Fund: A long term investment vehicle whereby a donation is given to a nonprofit organization and invested back into the community, interest bearing and charge nominal investment fee charges, capital remains untouched, and only (a percentage) of the interest income from the fund is used for donation making. SAP Foundation: Flow through fund based in United States which is global in nature and dedicated to supporting innovative and high impact education and economic opportunity around the world that creatively leverages technology to improve society and create positive social change. SAP Stiftungsfonds: Flow through fund based in Germany which is global in nature and dedicated to promoting education, science and research, development, protection of nature 5
and the environment, international understanding, charity and individual projects such as the awarding of scholarships, travel and project donations and the funding of teaching staff. o Flow Through Fund: A short term investment vehicle whereby a donation is made to a charity and disbursed within a short period of time, usually within one year, maybe interest bearing and/or charge fees (which are variable), allows donors to advise on disbursements within a set period of time and to add to balance of their fund in order to allocate donations(s). E.g. SAP Stiftungsfonds, SAP Foundation, SAP America Charitable Fund. o In Country Charitable Funds: Flow through fund in countries in which more than 10 donations awarded each year dedicated to supporting innovative and high impact initiatives in areas of focus. 3 Policy content 3.1 Areas of Focus The vast majority of social investments made by or on behalf of SAP must adhere to the following areas of focus: Education -- Public, primary education institutions and non-profits with a focus on mathematics, science, information technology for the underserved and youth entrepreneurship. Our education partnerships help to improve learning experiences for underserved primary and secondary school students focusing on high impact math, science and high-technology learning and entrepreneurial education. Economic Opportunity -- Creating economic opportunity to propel emerging entrepreneurs and create sustainable economic growth. Our partnerships help to propel emerging entrepreneurs in targeted sectors who have leadership capability and high potential to scale. By 2013, at least 80 percent per year of SAP s financial CSR investments, corporate led employee volunteering and technology donations must align to the areas of focus described above. Clear directional targets will be established to show progress toward these goals and reported on a yearly basis. 3.2 Financial CSR Investments Funds for donations are part of the overall business operations of the company and are therefore considered line items in our corporate budget. Fundraising or one-time events such as raffles, galas, telethons, walk-a-thons or auction, advertising, special events such as conferences, symposiums or sporting events/sports groups are considered sponsorships -- not donations -- and must be handled accordingly as marketing. Please note such financial contributions may (a) be a donation under local tax laws and (b) may need to be classified as something other than marketing expense in SAP s accounting. 3.2.1 Global Partnerships A select group of NGOs and NPOs will be chosen as global charitable partners for SAP. Partnerships will reflect areas of focus and programmatic priorities will be established via a 6
request for proposal (RPF) process. Partnership agreements cannot exceed 3 years but are renewable. Global partnerships require approval by the Global CSR Governance Committee. All donations by Global CSR to global charitable partners must be made through Donor Advised Funds certified by SAP for that purpose, to ensure compliance CSR policy as well as local donation laws and regulations. Both DAFs have global reach and will be managed by Global CSR. 3.2.2 Regional, National and Local Partnerships Regional and national partnerships reflect areas of focus and programmatic priorities are established based on a request for proposal (RPF) process. Selection of regional and national partnerships requires approval by the Regional CSR Governance Committee. Local partnerships occur on a site specific level during set grant review periods each year. Requests will be reviewed and selected by established local donation committees, in conjunction with Regional CSR. The highest priority is given to requests that emanate from non-profit organizations that are located in locations of select SAP offices and align to our areas of focus. In situations where donations are greater than 75,000 Euro or where less than 80% of donations are aligned to areas of focus, approval is required from the Regional CSR Governance Committee prior to donation. Donations must be made through a country-specific DAF, where applicable, or Finance. When processed through Finance, approved donations must be charged to the country s donation budget under Regional Donations classification in the Global Communications Catalogue. In country DAFs are managed by Regional CSR. 3.2.3 Field Donations and Sponsorships On occasion, certain lines of business (LOB) -- other than CSR may be require charitable partnerships that align to specific operational priorities. Such donations and sponsorships are not handled by CSR. In order to pursue, employees must comply with Local Compliance and Finance regulations and processes. Once approved, field donations and sponsorships should be charged to the individual LOB cost center under Field Donations classification in the Global Communications Catalogue. 3.2.4 CSR Donation Exceptions In select situations, exceptions related to CSR infrastructure and external events (such as natural disasters) may occur that warrant a donation to a NGO or non-profit organization outside of our areas of focus. A marquis group of organizations will be selected as partners in such situations. Head of CSR will work with the respective CSR Governance Committee to obtain approval as required. 3.2.5 Evaluation Any CSR donation of more than 75,000 Euros to a single organization in a calendar year will be, at a minimum, measured against the following criteria: o Financial summary funding allocation from partnership/donation 7
o Number of individuals impacted by provided funding o Impact to individuals served o Goals met by the requested funding o Progress to date and outcomes achieved according to information provided in the application o Project successes/lessons learned/failures o Project takeaways The evaluation process is integrated into the donations management process. Evaluation questions will be sent eight months after the funding has been awarded. If an organization does not provide the required information, they will not be invited to reapply. If their award was multi-year in nature, funding will be held until evaluation data is provided. 3.3 Corporate-led Employee Volunteering SAP's approach to corporate volunteerism is multi-faceted. Through micro-volunteering, traditional volunteering, signature and skills based initiatives, SAP provides volunteer experiences that strengthen our ability to harness the talents of employees to deliver results. Employees are encouraged to become more personally involved, should they choose to do so. Such voluntary initiatives provide employees with opportunities for professional growth and development as they take on leadership and mentoring roles in society. 3.3.1 Time Off for Volunteering Full- and part-time employees receive up to 8 hours of time-off for volunteering each year for corporate led volunteer experiences with manager s approval. Time off for contract employees (ie C numbers) is based on manager s approval. 3.4 Technology Donations Leveraging our technology and people - SAP can provide resources that increase organizational efficiency in the non-profit sector. 3.4.1 Hardware Organizations eligible to apply for refurbished laptops include current SAP charitable partners as well as colleges and universities that are members of the University Alliances Program. Laptop donations will be focused in SAP locations in which a Laptop Service Center exists. Exceptions will be made on a case by case basis for service projects requiring hardware. 3.4.2 Software SAP offers software donation through a non-profit partnership with Techsoup. Occasionally, with approval from a Regional or Global Governance Committee Chair, enterprise and other types of software that is not offered through TechSoup is eligible for donation. 3.5 Governance Financial CSR investments, corporate-led employee volunteerism and technology donations will be reported to the Head of Global CSR by regional CSR leads on a quarterly basis and subsequently incorporated into the overall Sustainability reporting process (internal and external). Guidelines, projects and performance will be reviewed on a yearly basis. 8
3.5.1 Global CSR Governance Committee The Global CSR Governance Committee sets the CSR strategy. Each year, it reviews the CSR results and establishes an annual framework for the corporate social responsibility program. It monitors emerging issues and advises where and when necessary. It serves as a point of escalation for compliance issues and conflicts. Global CSR Governance Committee responsibilities include: o Sign off CSR strategy o Cross-board area alignment o Approval of major programmatic changes/improvements o Review achievements 3.5.2 Regional CSR Governance Committee The Regional CSR Governance Committees is tasked with monitoring CSR programs in region and enhance the transparency and disclosure, including disclosure regarding the status and progress of our programs, where and when necessary. Regional Governance Committees responsibilities include: o Execute strategy o Ensure compliance with goals and objectives 3.6 Branding The brand refers to the high-level, overarching concept behind all of SAP s Corporate Social Responsibility initiatives. It is a more suggestive term that communicates the passion SAP has for a strong, united approach to Corporate Social Responsibility. No local brands or sub-brands are permitted. Specifications on brand are provided by Marketing or Global Communications. For additional details, reference the SAP Branding and Naming Policy. 3.7 CSR Following Acquisition When applicable and in cases where SAP obtains CSR programs and DAFs due to acquisition of an external entity: Head of CSR will be added as Advisor to all acquired DAFs within 90 days of acquisition; CSR programs from acquired entity will remain in operation for at least one year to ensure appropriate review of operating procedures and governance at which time program all programmatic aspects must align to SAP s CSR policy and areas of focus; and, Donation funds from acquired DAFs are subject to rollover to SAP Foundation or SAP Stiftungsfonds after one year of acquisition. 4 Guidelines 4.1 Financial CSR Investments SAP creates partnerships with non-profit organizations and NGOs with tax-exempt classification only. The overwhelming majority of donations are initiated by SAP, are not a result of an unsolicited proposal, involve multi-year commitments and align to our areas of focus. 9
In most cases, subsequent donations will develop from these efforts after the current partnerships have run their course. While not encouraged, unsolicited proposals are reviewed on an ongoing basis. When forming partnerships with NGOs and non-profit organizations, the following rules must be strictly adhered to: Mission or activities of the non-profit organizations and NGOs must be in line with our areas of focus and ethical principles of SAP, its businesses, and/or locations; All legal requirements must be observed for the country or region from where (a) the donation originates and (b) will be awarded; Partnerships cannot exceed three (3) years but are renewable upon successful completion of the original agreement. Donations may be audited; All decision-making processes must be documented, transparent and rational; Depending on local tax regulations, a tax receipt may be required from the organization for submission to Accounts Payable; All donation requests must have a written proposal from the NPO or NGO; For donations over 75,000 Euro, measurement and evaluation is required; Employees may not expense charitable contributions, regardless of their nature; and, Under no circumstances can donations be made quid pro quo. SAP does not make donations to: Individuals, political, labor, religious, or fraternal organizations; Sports groups; Fundraising or one-time events such as raffles, galas, telethons, walk-a-thons or auctions; Capital campaigns, construction and renovation projects; Advertising; Special events such as conferences, symposiums or sporting events; Organizations whose missions or activities are inconsistent with SAP s Code of Conduct or whose work is potentially damaging to our business or industry; and, Organizations that discriminate on the basis of age, ancestry, color, disability, marital status, medical condition, national origin, pregnancy, race, religion, sex, sexual orientation or veteran s status. 4.2 Corporate-Led Employee Volunteering All corporate-led volunteer activities must be listed on Volunteer Management Solution for registration and reporting purposes. If the activity is employee driven, it must be reviewed by Corporate Social Responsibility and have a minimum of 10 employees committed in order to be considered for inclusion. SAP does not promote volunteer activities for walk-a-thons, galas, fundraisers, raffles, sporting events, symposiums, conferences, or event advertising nor do we support political, religious or labor organizations or those that discriminate on the basis of age, ancestry, color, disability, medical condition, marital status, national origin, pregnancy, race, religion, sex, sexual orientation or veteran s status. 4.3 Technology Donations In order to qualify for software donation, non-profit organizations must: Have tax-exempt status; Be aligned to areas of focus; and, Abide by terms and conditions outlined in SAP Software License and Related Services Agreement. 10
SAP does not offer software donations to: Individuals, political, labor, religious, or fraternal organizations; Sports groups; Special events such as conferences, symposiums or sporting events; Organizations whose mission or activities are inconsistent with SAP s Code of Conduct or whose work is potentially damaging to our business or industry; and, Organizations that discriminate on the basis age, ancestry, color, disability, marital status, medical condition, national origin, pregnancy, race, religion, sex, sexual orientation or veteran s status. 5 Appendix 5.1 Partnership Proposals At a minimum, proposals to CSR from an NGO or NPO should include, at a minimum: Organizational Overview Material o Mission and Vision o Size and structure, including affiliate network organizations o List of Management, Board of Directors & Advisory Board o List of corporate donors and funding amount o List of top champions (corporate and community leaders) o Current key performance indicators/metrics o Challenges and risks o Overview of current technology landscape, including needs and foreseen opportunities for operational efficiency Project Specific Information o Description of how organization will support our strategy o Proposed length of partnership o Description of resource requirements and critical success factors for implementation o (Any) regional or national partners organization seeks to engage in the partnership o Number of lives positively impacted by this project (with description on how this is calculated) o Specific outcomes based measures and learning questions organization seeks to implement o Specific performance measurement tools organization seeks to implement o Ideal outcome during the funding cycle overall o Bi-yearly success benchmarks o Opportunities for board placement by a member of the SAP Leadership Team o Description of volunteer opportunities o Opportunities to communicate/brand the partnership 5.2 Referenced Links External website: http://www.sap.com/about/csr/index.epx Internal website: /csr Internal website: /sustainability Donations Management (external): www.easymatch.com/sapgive Donations Management (internal): www.easymatch.com/sapadmin Volunteer Management Solution: www.easymatch.com/sapvolunteer Code of Conduct: /cobc Product donation website: www.techsoup.org 11