Green is the new Black

By tompfister

Peter Graf has served as the first Chief Sustainability Officer of SAP between 2009 and 2014. During his tenure, he successfully built SAP´s sustainability vision and drove its execution across the company´s worldwide organization, building a new growth business for the company from scratch. Under his leadership, SAP became a global leader in sustainability and won many prestigious awards.

Currently, Peter serves as the Chief Product Officer at Sungevity, the largest private solar company in the US. Sungevity implements an asset-light business model (think „Airbnb for solar“) to drive the global adoption of distributed, clean and affordable energy by home owners or businesses.

Today we met with him to discuss some of the hottest sustainability issues.

Why is sustainability such an important topic for most companies and consumers today?

There really are only three reasons why companies engage in more sustainable practices: First of all, they want to make more money by better serving the increasing desire of their customers for more sustainable (cleaner, saver, healthier, lower carbon emitting, more responsibly produced, or more easily recycled, …) products. Secondly, companies seek to reduce the risk of business operations and make the organization more resilient. This includes, for example, protecting resources that are essential to the company’s existence. And thirdly, regulators force them to adopt more sustainable practices by law, due to political (i.e. public) pressure.

What would you advise companies which are implementing sustainability strategies?

Ah, great question. First of all, if your CEO doesn’t get it – forget about it. Implementing a sustainable strategy requires every part of the business to ensure that sustainability principles are adopted and relevant KPIs are introduced, monitored and rewarded. Without the CEO, the required change management isn’t happening. Specifically, since sustainability often requires taking a longer (mid) term perspective that too many mid level leaders don’t really care about. Secondly, you need to align this strategy with the C-Suite. For sustainability to be successful, it has to be communicated in the language of the recipient. For example, explain to the head of sales what a more sustainable product does to units sold. To the CFO, explain how sustainability reduces risk and costs. Finally, the team who manages this strategy and its execution needs to be at the core of the company value creation. For example, in a software company they must be part of the development organization. In a utility, they need to be part of power production. Otherwise they just don’t matter and nobody’s going to listen. My personal nightmare are organizations that try to drive a sustainability perception from their PR organization without any real change in the rest of the organization: Dead on arrival.

Which organization would you rate as the sustainability champion today and why?

SAP isn’t bad. Just kidding. I think the company is doing a really good job and is learning a lot in the process. The most sustainable companies in the world today are those in the consumer products industry with customer segments that really care about sustainability. My favorites include Danone, REI, and Nike.

What do you think is the next big sustainability trend?

I am completely fascinated by the evolution in power generation, energy storage and its relationship to mobility. Let me translate that for you: Solar and wind power, batteries to store electricity and electric mobility have the potential to turn entire industries on their heads. This is disruptive stuff.

What are the advantages and disadvantages of the most popular alternative energy sources?

Let’s use the example of solar power to show how cost effective these alternative energy sources have become: When I bought my solar system 10 years ago, it cost 3 times as much as it would cost right now. I bought it, because I wanted to reduce my carbon emissions. In 2 years, it will have paid for itself through energy savings. Today, 84% of our customers buy a solar system to save money. In 22 of the 50 states of the US solar is now cheaper than eletricity from the grid. By 2020, that number will grow to 42 states. This reduces the pay back period to about 6 to 7 years. After that, your solar energy is free!

So is saving money the most common reason for consumers to go solar?

Absolutely. Let´s take a look at our family of 4. Before having a solar power, our electricity bill was between $300 and $400 per month. In 2015 our electricity bill was $88 – for the whole year! Did I mention that I am now charging an electric car every day that I didn’t even have before going solar?

That´s impressive. That proves that you and your family live green and sustainably as well..

We try to do our best, but we are certainly not perfect. I’m trying to minimize my air travel, but that’s not always possible. And one trip across the Atlantic has the carbon footprint of 1 year of commuting to work.

What are the greatest challenges in front of the solar industry today?

Compared to some of the European markets (we are also selling systems in Belgium, the Netherlands and Germany), the solar industry in the US is in its infancy. Only 1% of the suitable homes have a solar system today. The US market is huge but growth in this business is expensive. We are seeking to perfect our business model at Sungevity so we can grow much less costly than the competition.

Peter and now a couple of personal questions….

Who is the greatest Mathematician of all times?

My dad. There are many brilliant mathematicians, but my dad made it fun to study math. And he was a committed teacher: He bought me an Apple II when I was 14. How outrageous! That computer cost as much as a car back then…

Peter, what 5 legendary personalities (alive or dead) would you invite at your house for dinner?

My favorite dinner is that with my family – but I don’t think that’s what you’re asking about. Well, I don’t know if he’d be legendary, but I never met my Grandfather on my mother’s side, so he’d certainly make the list. Leonardo da Vinci is on the list, too. I want to know where he learned to time travel. Just for the fun of it, I’d also pair up Donald Trump and Abraham Lincoln – that would be an interesting debate. I’d keep that final spot open so I can invite whoever I feel like on the day of the dinner.

Peter, what’s the last thing you googled?

Christmas gifts for my family.

Peter, what is on your bucket list for exotic travel destinations?

My wife and I just recently put “See the Northern Lights” on our bucket list. We have a tendency to avoid the cold, so this would be a different type of trip.

Peter either Or