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Triple Bottom Line Notes - Objective 5

The Triple Bottom Line (TBL) is a business framework that emphasizes measuring social, environmental, and financial impacts, promoting a sustainable approach to business. It consists of three interconnected components: people, planet, and prosperity, which collectively influence an organization's success and resilience. By adopting TBL principles, businesses can enhance their corporate social responsibility, minimize environmental impacts, and contribute to economic well-being, ultimately leading to long-term success for all stakeholders.

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44 views3 pages

Triple Bottom Line Notes - Objective 5

The Triple Bottom Line (TBL) is a business framework that emphasizes measuring social, environmental, and financial impacts, promoting a sustainable approach to business. It consists of three interconnected components: people, planet, and prosperity, which collectively influence an organization's success and resilience. By adopting TBL principles, businesses can enhance their corporate social responsibility, minimize environmental impacts, and contribute to economic well-being, ultimately leading to long-term success for all stakeholders.

Uploaded by

Antonia Pierre
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Objective 5: discuss the importance of the Triple Bottom Line in creating and managing a

sustainable business venture. The 3Ps: (a) people; (b) planet; and (c) profit.

What Is the Triple Bottom Line?


The triple bottom line is a business concept that states firms should commit to measuring their
social and environmental impact—in addition to their financial performance—rather than solely
focusing on generating profit, or the standard “bottom line.”

Historically, businesses operated in service solely to their financial bottom line. In 1994, author
and entrepreneur, John Elkington, introduced the concept of the triple bottom line (TBL) with
hopes of transforming the financial accounting-focused business system to a comprehensive
approach that measures impact and success. As a result of the triple bottom line theory and
application, some businesses began to recognize the connection among environmental health,
social well-being, and an organization’s financial success and resilience. To get an accurate
perspective of their operations, beyond what is reflected in their profit and loss statements,
organizations must fully account for all costs associated with doing business.

Fast facts about the triple bottom line:

✓ It is a transformation framework to help businesses and organizations move toward a


regenerative and more sustainable future.

✓ TBL offers tools that help an organization measure, benchmark, set goals, and eventually
evolve toward more sustainable systems and models.

✓ It illustrates that if an organization is only focused on profit, while ignoring people and the
planet, it cannot account for the full cost of doing business and thus will not succeed long
term.

✓ Triple bottom line theory expands conventional business success metrics to include an
organization’s contributions to social well-being, environmental health, and a just
economy. These bottom-line categories are often referred to as the three “P’s”: people,
planet, and prosperity. While there are three categories that make up the triple bottom line,
it is important to remember they are not siloed. Through a systems theory lens, the three
“P’s” are all interconnected. Given that the foundation of sustainability is systems thinking,
a single initiative that falls under people, planet or prosperity will also create an impact in
the others.
People
People considers all stakeholders (versus solely shareholders) including employees, communities
within which an organization operates, individuals throughout the supply chain, future generations,
and customers—just to name a few.

The connection with corporate social responsibility (CSR) is central to this segment of the triple
bottom line. CSR is defined as a responsibility among organizations to meet the needs of their
stakeholders and a responsibility among stakeholders to hold organizations accountable for their
actions. A few initiatives that an organization may consider as part of its CSR goals include
advancing human rights; ending poverty and hunger; diversity, equity and inclusion; gender equity;
ensuring a healthy and safe work environment; and community engagement and volunteerism. Not
only are CSR initiatives beneficial for stakeholders, but an organization integrating CSR into their
business strategy is also good for business. As part of the commitment to advance CSR initiatives,
it’s common to see businesses sharing best practices with other businesses and organizations.

Planet
Planet considers the relationship between an organization or business and the natural environment
and its ecological systems.

Public opinion, consumer purchasing power, the speed and transparency of information sharing
via social media, and even industry-led activism has made it easier for stakeholders to hold
organizations accountable for their actions.

This is seen in stakeholders rewarding an organization’s positive impacts and reprimanding the
negative. When that sentiment gains public attention, chances are high that it will impact who
consumers buy from and who they ultimately support. Stakeholders are increasingly aware of not
only the consequences business activity can have on the environment, community, and economy,
but also of the importance of global issues, such as climate change and social justice.

Over the past several decades, businesses have increasingly adopted practices that help minimize
environmental impact. More recently, large organizations like AT&T, DELL, EASTON, Hewlett
Packard, Kohler Co., Levi Strauss & Co., and Target, to name a few, have taken a step further
down the sustainability path by creating a net-positive or regenerative impact on the environment
and society.

Prosperity
Prosperity considers the economic indicators over which an organization or business has
influence—for example, paying livable wages, ethical sourcing, and workplace health and safety.

Triple bottom line theory is systemic in nature through its view of people, planet, and prosperity.
With this connectivity in mind, the United Nations (UN) created Sustainable Development Goals
(SDGs) that “ensure all human beings can enjoy prosperous and fulfilling lives and that economic,
social, and technological progress occurs in harmony with nature.” Many of the UN SDGs aim to
improve a wide range of areas related to environment, people, and economic opportunities. One
of the many prosperity-focused goals aims to provide decent work (safe working conditions, living
wages, compassionate leadership) and economic growth for those in specific communities.

Examples from the UN’s SDGs of how businesses can help support the prosperity of their
stakeholders include:

✓ By 2025, take immediate and effective measures to eradicate forced labor, end modern
slavery, and human trafficking.
✓ Additionally, prohibit and eliminate all forms of child labor, including recruitment and use
of child soldiers.
✓ By 2030, devise and implement policies to promote sustainable tourism that creates jobs
and promotes local culture and products.

The Definition of “Business Success” is Evolving


The saying “business as usual” now holds a new meaning. It is no longer sufficient in the eyes of
consumers, employees, and other stakeholders to only meet compliance standards. Understanding
and operating through a triple bottom line framework offers opportunities for optimization,
innovation, and improvement across sectors and industries. Engaging a business model that
considers the three “P’s” of people, planet, and prosperity will ultimately lead to increased
resilience and cost savings, decreased organizational risk (i.e. supply chain and public relations),
a decrease in unforeseen costs, and overall success for all stakeholders involved.

Certified B Corporations bring the triple bottom line, as John Elkington designed it, to life. B
Corporations are a relatively new type of business, legally required to consider impacts on all
stakeholders including employees, customers, suppliers, community, and the environment. Their
mission is to become a community of leaders who drive a global movement of people using
business as a force for good.

While new business models continue to evolve, there is still much work for sustainability
professionals within every organization, no matter the sector, industry, or role. Through triple
bottom line theory, sustainability changemakers have the opportunity to strategically engage
colleagues and leadership. As a result, we can make measurable, sustainability-focused progress
in virtually everything we do.

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