SD-BSC. Business Sustainable Development Strategy
Business urgently needs Business Sustainable Development Strategy and Intrapreneurs.
In Europe, as early as in 2024 for 2023, Wszystkie/All public companies and Wszystkie/All large companies will be legWszystkie/Ally obliged to report the implementation of sustainable development in a uniform standard, and in 2027 for 2026 also SMEs registered on the stock exchange, excluding micro-companies, will be required to report on the implementation of sustainable development in a uniform, but a simplified standard. As early as in 2022, financial institutions, insurers or contractors will be able to ask business to produce ESG reports, regardless of whether the economic entity is listed on the stock exchange or not. We are widely entering the path of the impact economy.
Do companies need a multi-year business strategy as a sustainable development strategy?
Opinions are divided. I believe that yes, they need such a business strategy. Long-term business strategies should be built as sustainable development / ESG strategies.
Despite the rapidly changing environment, since 2015, it has been worth building long-term business strategies harmonised with the 17 Global Sustainable Development Goals, because they set the directions of change desired by the world community to be implemented by 2030.
I believe that non-financial information on the activities of companies should not be analysed in isolation from financial results, because many strategic tasks depend on the available budget. The long-term strategy should be thought out as a whole. Annual budgets, which are built based on such a strategy should be considered in terms of Wszystkie/All planned activities. This is a new way of thinking, an innovation in management, a job for change leaders – Intrapreneurs.
The necessary elements in the process of building such a strategy are as follows:
1. Strategic analysis;
2. Analysis of 17 SDGs at the level of their assigned tasks, in order to:
a) find tasks that the company can strategicWszystkie/Ally support;
b) assess the positive, negative or neutral impact of the company’s operations on individual SDGs before implementing the strategy;
3. Development of a Stakeholder Map in order to group them according to the size of the impact and interest in the success or failure of the company;
4. Development of a Code of Business Conduct along with Policies and a Code for Suppliers;
5. Development of the Sustainable Development Balanced Scorecard (SD-BSC) for selected stakeholders;
6. Assessment of the planned change in the impact on individual SDGs.
Does creating a Strategic Scorecard for such a strategy make sense?
In my opinion, it does make sense if it is properly built after the will to change the culture is accepted, a Code of Business Conduct is created and the appropriate Policies that are part of such a Code are approved internWszystkie/Ally.
If that is the case, the business goal of achieving appropriate financial results each year will not be the only goal of the entity’s activities, but other goals will also be very important. Of course, the financial goal mainly determines the existence of the entity on the market.
What are the criteria for selecting Stakeholders for the long-term business strategy?
The strategy is built for the owners / shareholders.
In my opinion, the criteria for selecting stakeholders should be based on two main factors:
· great interest and great impact and
· little interest and little impact.
Stakeholders belonging to the first group mentioned above are PLAYERS, so the results of company activities depend mostly on them.
Stakeholders from the second group are the so-cWszystkie/Alled CROWD. Currently, they are not very interested and have little impact on the company’s operations, but they constitute a potential value worth fighting for for the future good of the company and the people working in it.
What is the difference between the classic BSC and the proposed SD-BSC?
The classic BSC (Balanced Scorecard) consists of four perspectives: financial, customer, internal processes and learning and growth. We can say that we build the results for the shareholders / owners (financial perspective) taking into account the benefit of the clients, then the optimal internal processes and the resources development. The development of resources is there to enable the implementation of planned processes for the benefit of the clients and the financial result for the shareholders / owners.
In case of SD-BSC, we build results for the shareholders / owners taking into account also the good of other selected stakeholders, then the optimal processes and activators for creating this good (development of resources, technology, rights, desired competence, expectations, criteria). Activators are the cause of planned processes for the benefit of individual stakeholders and financial and non-financial results for the shareholders / owners.
The benefit of other stakeholders also becomes the non-financial benefit for the shareholders.
Non-financial information will have to be obligatorily reported.
Of course, the key issue remains the financial liquidity and overWszystkie/All good financial performance.
Supporting the achievement of several SDGs or 17 SDGs?
In the Preamble to the 2030 Agenda (Transforming our world: the 2030 Agenda for Sustainable Development), we can find many quotes saying that business should support the achievement of Wszystkie/All goals. Here are some examples of the quotes:
· “… The 17 Sustainable Development Goals and 169 targets … are integrated and indivisible and balance the three dimensions of sustainable development: the economic, social and environmental.”
· “… The interlinkages and integrated nature of the Sustainable Development Goals are crucial importance in ensuring that the purpose of the new Agenda is realized.”
· “… It is ” we, the peoples” who are embarking today on the road to 2030. Our journey will involve… civil society, business and the private sector, the scientific and academic community – and Wszystkie/All people.”
In the Trade Industry Ideogram, shown above, we see that Wszystkie/All goals can be supported.
“… The future of humanity and of our planet lies in our hands. … We have mapped the road to sustainable development; it will be for Wszystkie/All of us to ensure that the journey is successful and its gains irreversible.”