Getting Started with Microsoft Dynamics 365 Business Central Sustainability Reporting

Microsoft now has the first iteration of a Sustainability module in Dynamics 365 Business Central. But before we delve into how BC tracks sustainability, let’s get a history lesson and a few definitions out of the way so that we’re all on the same page.

Who needs sustainability reporting? 

What is “The 2030 Agenda for Sustainable Development” and why is it so important? It is a call to action adopted by the United Nations (UN) in 2015 that created the world Sustainable Development Goals.

Sustainability Development Goals (SDG), also known as Global Goals, are 17 goals outlined to end poverty and protect the planet while aiming for "peace and prosperity for people and the planet."

These goals, originally set for 2030, were ambitious under the best of circumstances, and after setbacks like the COVID-19 pandemic, rising inequality, and armed conflicts, to name a few, they will be difficult if not impossible to meet for most countries and regions. 

But nations are moving forward with their efforts to meet sustainability goals. Below is a list of the top 12 countries of the 193 UN Member States ranked by their overall score in The Sustainable Development Report 2023. The overall score measures the total progress towards achieving all 17 SDGs. The score can be interpreted as a percentage of SDG achievement. A score of 100 indicates that all SDGs have been achieved. Canada is ranked 26th and United States is ranked 39th on the list. 

Why add sustainability reporting in Microsoft Dynamics 365 Business Central now?

As shared by Microsoft Senior Product Manager Aleksandar Totovic during the Dynamics 365 Business Central Launch Event for 2024 release wave 1, Microsoft’s primary drivers for adding new sustainability features came from 4 sources. 

1. Customers looking to do business with green companies
2. Investors looking for sustainable companies to invest
3. Employees want to work for conscientious and sustainable companies
4. Regulations

Of the 4 motivating factors listed, only one is mandatory: regulations. 

The European Union’s (EU) Corporate Sustainability Reporting Directive (CSRD) requires reporting for the biggest companies beginning this year (2024.) A few of the regulations driving this need have yet to be completely decided such as the UK’s Sustainability Disclosure Requirements (SDR), Canada’s ESG-related Investment Fund Disclosure with reporting requirements defined in 2022, and United States’ (US) International Sustainability Standard Board (ISSB) with no details yet published. There are several other countries around the world that have initiatives, some completely defined with many others in their infancy. 

Even if we don’t have all the details of the regulations for the country or countries within which we work, investors, customers, partners, and even employees may be a significant driver to begin tracking prior to being regulated into doing so.

About 12,000 businesses across the EU have already been affected by CSRD with more than an additional 50,000 being affected with new regulations beginning in 2025.

BC Sustainability vs. Microsoft Cloud for Sustainability

CSRD requirements for the EU are actively monitored by Microsoft and have been since 2021. This is in part due to the large customer base for Microsoft Business Solutions in the affected countries. With the introduction of BC Sustainability functionality to the already available Microsoft Cloud for Sustainability, Microsoft is set to address the sustainability reporting requirements for all companies regardless of size. While Microsoft Cloud for Sustainability is intended for very large enterprises, its target is only about 20% of Microsoft business solution customers. For the remaining 80% of customers, mostly those classified as SMB (Small to medium-sized business,) BC Sustainability is the answer.