Incorporating sustainability into the business concepts raise many questions. for example, how are we going to measure it, how do we make it work or how do we define it?
The Triple bottom line is one of the methods companies use to measure the benefits and profits through their sustainability efforts.
In 1994, John Elkington, built upon a concept of Triple Bottom Line in hope to influence financial accounting business system to take more comprehensive approach in measuring impact and success. Thanks to this approach, businesses begin to realise the connection of environmental health, social well-being and organisation's economic success to the business resilience.
Today, companies long realise, that the business financial success does not start and end in their profit and loss statement. In order to get accurate perspective the business must understand its impact on and relationship with the community, environment and economy going beyond compliance.
Triple Bottom Line theory expands the business success metrics to include its contribution to 3Ps: People, Planet and Prosperity.
It is a transformation framework for a business to help them move forward and assure resilient future. The tools hep businesses to benchmark, set goals, improve and evolve towards more sustainable models. The a approach suggests that if business only focus on profits and forget on people and environment it will not be successful long term.
"The triple bottom line wasn't designed to be just an accounting tool. It was supposed to provoke deeper thinking about capitalism and its future." (John Elkington)
Social sustainability
Your social bottom line is increased by having fair and beneficial labour practices and measuring how the business practices impact on the social economy. Corporate Social Responsibility looks at the long-term sustainability of human capital, with the understanding that a desirable workplace will always be able to operate in the future. This part considers all stakeholders including employees and communities in which the business operates including future generations and customers. It keeps the organisation to be held accountable for their actions. Organisations may consider advancing human rights, gender equality, H&S in the business and community engagement.
Environmental sustainability
The Triple Bottom Line approach considers environmental sustainability in a view that the business will be more successful the less negative impact it has on the environment and natural resources it consumes. The focus here is on controlling, managing consumption and monitoring emissions and waste. Measuring the environmental bottom line can, however, be time consuming and resource heavy. There is number of software providers available on the market to help to measure it.
Social media led activism, public opinion, consumer purchasing power led businesses to be accountable for their actions. Consumers reward the positive impact and criticise companies who do not take responsibility for the environment. The consumer behaviour changes and who they support.
Economic sustainability
The Triple Bottom Line approach suggests that your capital should be measured in terms of how much of an impact business has on its economic environment. Businesses often look at how they can help local suppliers stay in business, ensure that employees get pay enough to stimulate economic growth and monitor their purchasing decisions to ensure materials are safe and do not put the environmental compliance at risk.
One of the most prosperity-looking goals is to provide decent work (wages, conditions, leadership).
All the three factors play a major role in determining whether the business can sustain and generate profit. "Business as usual" now holds new meaning. It is not only sufficient to meet compliance standards.
Bibliography:
Era Environmental Management Solutions, 2013, Sustainability Management System: The Triple Bottom Line
University of Wisconsin, 2021, Sustainable Management, Triple Bottom Line
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