The process of formulating sustainability balanced scorecard

The process of formulating a sustainability score card has to meet a few basic requirements.

  • The process must lead to a value-based management of environmental and social aspects
  • In order to ensure their value-based management environmental and social aspects must be integrated with the general management system of the firms.
  • A sustainability scorecard should be business unit-specific and not generic.
  • Environmental and social aspects of a business unit must be integrated according to their strategic relevance. This includes the questions whether the introduction of an additional non-market perspective is necessary.

1. Choice of strategic business-unit.
For small and medium sized enterprises the business unit level may be identical with the corporate level, while in large companies or groups there are often several business units which aim at different customers segments often organised as independent profit centres. The business scorecard serves to describe and translate an existing strategy consistently in order to enhance the successful execution of the strategy. Thus business unit should already have a strategy

2. Identification of the environmental and social exposure of the business unit. In order to ensure the sustainable business scorecard is tailored to the specific needs of the business unit chosen, the environmental and social aspects that affect the business unit must be
identified in a second step. The result is a profile of the environmental and social exposure of the business unit. This step helps identify all pertinent environmental and social aspects.

3. Determination of the strategic relevance of environmental and social aspects.
It aims to translate the verbally formulated strategy of a business unit into causally linked objectives and indicators. The balances score card identifies 15-25 strategically most relevant aspects and to link them casually and hierarchically towards the long term success measured by the financial perspective

(Visited 97 times, 1 visits today)
Share this:

Written by