Sustainable Balanced Scorecard: Concepts and Approaches

Abstract

Over the years performance measurement systems have been criticized to focus heavily on financial aspects ignoring the strategic relevance of non-financial aspects. As organizations recognized the importance of non-financial measures, it emerges the need for a comprehensive framework that includes both financial and non-financial aspects. A well-known framework is the Balanced Scorecard (BSC) proposed for the first time by Kaplan and Norton in 1992. The BSC has been recognized to be a useful frame to improve long-term performance of a company. The BSC includes four perspectives: financial perspective, internal business process, learning and growth and customer perspective. In the recent years, an additional perspective has been introduced due to the growing attention paid by national and international organizations to the environment. In this context, managers have recognized the importance of introducing sustainability indicators to improve the company’s performance and to be able to succeed in a global competitive market. Figge et al. (2002) identified three approaches to combine sustainability with the BSC: first, integrate the four perspectives with the sustainability aspect; second, add a new perspective; third, create a specific environmental or social BSC. Analysis and comparisons of the major findings emerging from the implementation of a BSC and sustainability measures are then reported.