Sustainable value creation and relations among financial, environmental and

social inforamtaion/KPIs

Wrote by: Said Ismail Said Case company: Soltech Energy Sweden AB

1. Introduction:

Soltech Energy Sweden AB is a company in the renewable energy sector with a vision to
contribute to climate change by providing different solar energy solutions for electricity
production. It helps its customers to go from fossil energy to solar energy and also works for
innovation in the energy market of the future. The Soltech Group's operations consist of the
development, sales, and operations of solar power plants based on thin-film solar cells and
silicon solar cells. The company's main geographical focus is currently The Nordic countries
and China which has the first position in producing and consuming electrical energy.
Sustainable development for Soltech means protecting the environment, including pollution
prevention, compliance with current environmental regulations and other binding
environmental requirements, and constantly improve the environmental management system to
achieve better environmental performance. The sustainability policy defines the positions and
values ​linked to sustainability, while the company's code of conduct and values ​describes how it
should act to live up to its positions and values ​both internally and externally (Soltech
sustainability reports 2017-2019).
The aforementioned company is well analyzed in this topic based on the available data (Firms
webpage, articles recommended by the associated tutor, my findings, and other valuable
sources), considering sustainability as the heart of the matter. First I will try to present the value
creation part and performance measurements in the related corporation considering three
important dimensions ( Financial, Environmental, and Social ) of the modern approach to
sustainability than on the second part I will try to have a technical landscape of the issue
throughout analyzing relationships between the financial, social and environmental
information/ratios/KPIs. Finally, my discussion and conclusion is the ending part.

2. Sustainable value creation processes and performance measurement:

Soltech Energy Sweden AB is the head of several other companies (subsidiaries) in diverse
kinds of sectors that has been successfully developing a great value chain. It starts with the
sustainable idea of solar electricity usage culture, development, and production to the final
stage of selling and installing devices in an innovative style of living in Sweden and China. All
of its subsidiaries in different fields such as innovation, sales, construction, and so on cooperate
to enhance the level of sustainability considering the up-stream and down-stream approaches. It
is a Swedish-based company so all of the activities are under the Swedish laws and relative
authorities regulations. Quoted from the Swedish companies registration office that states
“Information about products and production - beyond financial data - is increasingly in demand
by different stakeholders, such as service providers, creditors, government authorities,
investors, and consumers. Green data is in demand due to increasing public awareness and
attention, and in the years to come, this attention will be decisive for businesses as well. Green
data will be a parameter for competition, and social, environmental, and climate responsibility
can be expected to have increasing economic importance” (Bolagsverket 2021). For a better
understanding of performance measurement, we discuss the issue in the following three aspects.

2.1. Financial perspective and Responsibility:

Soltech's overall financial goal is to generate a good return for shareholders. That the
company is profitable is a prerequisite for us to be able to achieve its goals within the
business. To long-term To be able to build a strong company that works focused on
sustainability issues, it must be profitable. Soltech also works for sustainable financing,
responsible investments, and prioritization of financial counterparties that have a good
sustainable business agenda/ethics. The organization focuses on that establish good risk
management partly by identifying the sustainability exposures within the company and
by actively planning and working to reduce these (Soltech sustainability reports
2017-2019).

Graph 1. Soltech Financial performance KPIs

As it is displayed in graph 1. We can point out that the firm is having a contentious
rising stream of financial indexes and it can fulfill its financial duties to its related
stakeholders. Thus the company is in the first stages of making the appropriate platform
as a fundamental infrastructure to this important part of renewal energy and still, it is
trying to compete with other electric energy producing counterparts that have the
benefits of economy of scale. It is a known fact that it would be hard for a private
company to handle such projects with similarities to public projects that need a lot of
governmental aid and supply. For instance, the (ROE) is illustrating the patience of
shareholders to the future of sustainable investment and income based on accurate
predictions of the future energy industry.
 Graph 2. Soltech Energy Sweden AB Financial Credibility status

In graph 2. We can illustrate the completion of the primary financial task of the
company to its important financial stakeholders by presenting the quick ratio, debt, and
equity ratio, and COL in percentage where the firm has a good liquidity condition and
rising debt and equity ratio considering a high rate of interest for its outstanding
investment. Thus the company can pay its debt and related interest on time.

2.2. Environmental Responsibility :

Soltech offers environmentally adapted products and services that are produced with the
least possible resource and energy consumption and with low environmental impact and
responsible environmental footprint. Wise resource management is a keyword within the
company and great focus is placed on resource use regardless in terms of energy,
premises, waste, travel, or transport and to reduce based on reasonable efforts. Soltech
works systematically and prevents soiling through goal-oriented environmental work
which is an integral part of the company's culture. Applicable environmental
requirements together with environmental aspects and environmental goals form the
basis of our work (Soltech sustainability reports 2017-2019).

The products presented by this group of the company are fully eco-friendly and even the
process of production seems to be well-fitted to the modern regulation of fair trade and
fair usage of resources as input stage. More significantly it is undeniable that the output
of the corporation is an appropriate means and manner of reduction of the ongoing
harms to mother nature and dealing with the current serious issue of global warming.
 According to the World Economic Forum (2021), solar energy as a renewables energy is
the world’s cheapest source of energy. The cost of large-scale solar projects has plunged
85% in a decade that retiring costly coal plants would also cut around three gigatonnes
of CO2 a year.

2.3. Social Responsibility :

Soltech safeguards and integrate the company's stakeholders and partner’s information so that it
is protected and managed responsibly, a clear sustainability focus to ensure that fellow partners
share values ​and the corporation’s code of conduct. Employees are one of the company's most
important assets. Success is through the employees' commitment, development, and
competence. The firm strives to create the work environment that is best possible for all
employees considering development and responsibility (Soltech sustainability reports
2017-2019). The Soltech Energy Group offers products and services with high quality to its
customers in the solar energy and related industries as well as in the roof, facade, and electricity
industries. Soltech Energy always strives for satisfied customers. The quality meets the
expected quality - both externally and internally - in the chain up to the end customer. The
requirements from relevant stakeholders are equal to the requirements for its operations through
continuous improvements. Its management system contributes to the development of the
company and its employees and it eliminates risks and prevents mistakes through a systematic
approach (Soltech Energy quality policy 2021). The information policy aims to ensure good
quality both internally and externally information as well as that laws, rules, and agreements are
complied with. It should be easy to find and obtain information for employees internally,
external stakeholders, and for other interested parties. Qualitative information, which must
never be ambiguous or misleading, shall be a guideline for the Company. Incorrect information
may never be communicated. Difficulties and problems must be properly highlighted together
with the measures taken to resolve them (Soltech Energy information policy 2017).

3. Relationships between the financial, social, and environmental information/ratios/KPIs

Considering the above three major aspects of financial and non-financial pieces of information,
ratios, and KPIs, it is apparent that some direct and indirect reflexive impacts of each variable
at a specific time and place are relevant to the kind of situation that the company find itself,
create correlations among themselves. It can emerge as parallel factors and objectives which
will improve each other or either antagonistic that the firm needs to trade-off based on a deep
understanding of the corporation’s lifetime strategy and priorities that the gives to differing
financial and non-financial goals. In the case above is obvious that the company has to
concentrate on its core and deep strategy. Quoted from Kim, Kyung, et al (2017), “Managing a
firm’s CSR initiatives broadens the scope of analysis beyond the traditional economic approach
of maximizing shareholder value. Besides shareholders, the set of affected stakeholders
includes customers, employees, elements of the supply chain, and the environment.” is giving
the exact answer to why the company is still doing well due to the knowledge of its
stakeholders about long-term and deep economic objectives. Despite this managers are trying to
achieve short-term financial objectives and on the other hand, expect to attain long-term social,
 environmental, strategic, and even huge financial targets. Mass et. al (2016) states
“Measurement, management, and communication of the sustainability improvement (or
otherwise) of a company can be thought of and organized from transparency and performance
management perspectives. Depending on the perspective taken, substantially different
consequences emerge for the choice, design, and use of sustainability performance
measurement indicators. Another part is a competing relation between various KPIs, for
instance, the kind of high cost of its products to be used in the production process or other
cheap substitutes that aren’t originated by this specific firm in a huge sustainable manner.

4. Conclusions:
To conclude the issue, we get the understanding that any matter related to life is connected by
some means to sustainability and it is mostly determined by financial or non-financial
objectives. It is human nature that feels and reacts based on the setting’s demand. Human nature
calculates the results of each reaction by the level of knowledge from the natural and social
phenomena, this reminds us of the material (shareholder value) or moral (legitimacy) aspects of
our surroundings from Soderstrom et. al (2017), “ while all of the firms report that CSR is
important for success, the reasons underlying its importance (e.g., to enhance shareholder value
or for legitimacy) and the nature of the firm’s CSR goals impact the way that CSR is
implemented within the MCS.”. It is a necessity to understand and educate others that, humans
are not breathing gold and dollars nither poisoned air. Next generations have also the right in
getting access to natural resources and the only way is submission to more accurate and deep
natural and sustainable solutions.

References:
Kim, W., Kyung, N., Matsumura, E.M., "Managerial Accounting Research in Corporate Social
Responsibility: A Framework and Opportunities for Research." Advances in Management
Accounting. Vol. 28. Emerald Limited, 2017. 31-58.
Maas, K., Schaltegger, S., Crutzen, N., (2016) "Integrating Corporate Sustainability
Assessment, Management Accounting, Control, and Reporting." Journal of Cleaner Production
136: 237-48.
Soderstrom, K., Naomi, M., Soderstrom, S., Stewart, C.R., "Sustainability/CSR Research in
Management Accounting: A Review of the Literature." Advances in Management Accounting.
Vol. 28. Emerald Limited, 2017. 59-85.
Bolagsverket, (2021), Roadmap for the realization of the Nordic Smart Government
ecosystem, https://bolagsverket.se/polopoly_fs/1.21191!/nsg-roadmap
Madhumitha Jaganmohan, (2 Feb 2021), Statista, Annual solar module production
globally(2019)
https://www.statista.com/statistics/668764/annual-solar-module-manufacturing-globalSo
ltech Energy Sweden AB annual financial report (2016-2020).
https://soltechenergy.com/en/investors/financial-reports-calendar/
Soltech Energy Sweden AB sustainability policy (2017-2019).
https://soltechenergy.com/uploads/2019/12/2.2.1-4-Ha%CC%8Allbarhetspolicy
https://soltechenergy.com/uploads/2019/12/2.2.1-2-Informationspolicy
World Economic Forum, (2021), The world’s cheapest source of energy in 2020,
https://www.weforum.org/agenda/2021/07/renewables-cheapest-energy-source/