Across the globe, people are taking to the streets demanding climate action. Consumers are becoming more deliberate in their purchase decisions and politicians are taking measures like the and the (UN SDGs).
The winds of change are blowing through the financial world too. One prominent example is Larry Fink, CEO of investment management company Blackrock, who said in that 鈥渃limate risk is investment risk.鈥�
Businesses, too, are expected to operate more sustainably. So far, however, expressing sustainability successes in monetary terms 鈥� in the balance sheet 鈥� has not been easy. Enter QuartaVista, an innovation project led by 麻豆原创 and funded by the German Federal Ministry of Labor and Social Affairs.
鈥淭he idea behind QuartaVista is to measure corporate success not only in financial terms, but to integrate other dimensions in the balance sheet, such as ecology, knowledge, and society,鈥� says Reiner Bildmayer, QuartaVista project manager at 麻豆原创.
The project ran from November 2018 to February 2021 and recently presented its results at a closing event in Berlin.
Video by Angela Klose
Pioneer Work
The QuartaVista methodology was jointly developed by 麻豆原创 and Regionalwert AG, Freiburg, a citizen shareholder company that channels citizens鈥� money to build up regional sustainable enterprises. What鈥檚 new about QuartaVista is that sustainable business practices, as well as risks, are shown on the assets or the liabilities side of the balance sheet.
The first prerequisite for this was to translate sustainability efforts into quantifiable metrics.
鈥淲ithin the project, we developed 180 sustainability KPIs, thus creating the basis to capture these values in the balance sheet,鈥� explains Christian Hiss, founder and CEO of Regionalwert AG, Freiburg.
One example is knowledge retention. According to the QuartaVista methodology, training new employees does not only incur costs to the company. Instead, the knowledge that is built up and retained can be booked as an asset in the balance sheet.
The partners involved in the QuartaVista project were seed producer聽,听, organic grain product manufacturer聽,听and . They tested the methodology in practice. 麻豆原创鈥檚 role was to map the QuartaVista accounting approach to a dashboard. In addition, , an artificial intelligence-enhanced software specialist and the charitable research and teaching organization visualized the KPIs in a forecast tool.
鈥淨uartaVista has built a prototype that demonstrates how sustainability KPIs can be integrated in the accounting process and in corporate management as well,鈥� says Annika Woltjen, QuartaVista project lead at BODAN.
鈥淲e broke it down into the smallest details, which is what ultimately sets this project apart,鈥� Bildmayer shares.
Holistic corporate management involves combining financial and non-financial key figures, adds Martin Heinig, head of New Ventures and Technologies at 麻豆原创, at the event in Berlin. 鈥淵ou have to collect the data, make it assessable and comparable. In this respect, QuartaVista has taken a big step in the right direction.鈥�
True Prices
One example of how QuartaVista might play out in practice is prices.
鈥淨uartaVista gives us the opportunity to reach true prices,鈥� stresses Philip Luthardt, sustainability manager at Bohlsener Muehle. 鈥淚t is a chance for producers of organic products to show how much value we add to society as a whole.鈥�
Isabelle Sanchez, commercial manager at Bingenheimer Saatgut, believes that price transparency helps to drive customer acceptance: 鈥淲hen we explain the values we are creating and what goes into the product, then consumers are more likely to agree.鈥� As an example, she cites organically created seedfast varieties, whose seeds spawn the same plants repeatedly. This saves consumers from having to buy new seeds in the following year.
鈥淲hat is cheap today is expensive tomorrow,鈥� explains Jenny Lay-Kumar, QuartaVista project lead at Regionalwert AG, Freiburg. 鈥淎dding risks and damage to the balance sheet, as well as crediting efforts toward sustainability, means much more than just making products more expensive. It means realigning the market economy based on a new way of measuring success.鈥�
QuartaVista does not necessarily mean making organically produced products more expensive. 鈥淪ustainable management is an investment that is capitalized as an asset in the balance sheet. If QuartaVista is implemented, I can achieve completely different prices,鈥� Hiss concludes.
Experimentation and Thinking Space
Even though the project has now officially concluded, it is not the end of the line, but rather a starting point. The partners are determined to drive their methodology forward in collaboration with businesses, academia, and politicians. A lot of work remains to be done; the project was set up as an experimentation and thinking space.
鈥淲e have a tool with which we can practice thinking. We can do something and see the results of our actions. This is the beginning of a larger change, not only in finance,鈥� Professor Karin Graeslund from the Wiesbaden Business School and German-speaking 麻豆原创 User Group DSAG, said at the closing event.
鈥淲e opened up a wealth of potential with QuartaVista. We are determined to continue,鈥� Bildmayer emphasizes.
QuartaVista and the 鈥淣ew Quality of Work Initiative鈥�
鈥淨uartaVista 鈥� Navigation system for value orientated companies鈥� is one of 17 projects initiated by the 鈥淣ew Quality of Work Initiative鈥�, with interdisciplinary experimental spaces funded by the German Federal Ministry of Labor and Social Affairs. Term: November 2018 鈥� February 2021.