The Triple Bottom Line: Measuring Your Organization's Wider ✓ Solved

The Triple Bottom Line Measuring Your Organization's Wider Imp

Your profits shouldn't come at the expense of people and the planet. Imagine going to work every day for a company that you are truly excited about, and proud to be a part of. Sure, the pay is decent and there's a company crèche, but those aren't the only reasons why you love working there. You're proud to be a part of this company because they're honorable. They stand out from the typical "cut-throat" business world by the way they treat suppliers, their commitment to environmental sustainability, their ethical investments, and their desire to empower and promote their team members instead of dragging them down.

There is a constant air of excitement and possibility at the office, and you love coming to work each day. Sounds pretty amazing, right? Well, a company like this isn't just a fantasy any more. And one approach to building a company like this, and monitoring what it does, is to use "the triple bottom line."

The triple bottom line was first fully explained by John Elkington in his 1999 book, "Cannibals With Forks: The Triple Bottom Line of 21st Century Business." It's a bottom line that continues to measure profits, but also measures the organization's impact on people and on the planet.

The triple bottom line is a way of expressing a company's impact and sustainability on both a local and a global scale. The concept behind the triple bottom line is that companies are responsible first and foremost to all their stakeholders, which include everyone involved with the company, whether directly or indirectly, as well as the planet we're all living on. This approach sees shareholders as part of the stakeholder group, but only as part of it.

At first, this approach can seem naïve. However, a number of important trends support the need for organizations to be benevolent to some extent:

• Many organizations are critically dependent for success on hiring, motivating and retaining good people.
• In many parts of the world, particularly in certain industries, good people are in short supply.
• Different generations have different attitudes to work, with recent generations seeking more meaning in their work.
• Consumers and potential recruits have many more choices than they had in the past and are more aware of the ethical and environmental stance of large companies.

So, let's look at the three bottom lines – People, Planet, and Profit – in more detail.

People

Companies that follow the triple bottom line way of doing business think about the impact their actions have on all the people involved with them. This can include everybody from farmers supplying raw materials, up to the CEO of the company. Everyone's well-being is taken into consideration. Companies offer health care, good working hours, a healthy, safe place to work, opportunities for advancement and education, and do not exploit their labor force.

Deciding how far to go in considering people can be complex. Should the consideration extend to employees' families or neighboring communities? And what should a company do if restructuring is necessary for competitiveness?

Planet

Triple bottom line companies prioritize reducing or eliminating their ecological footprint. They strive for sustainability, recognizing the long-term profitability of "going green." Their approach includes assessing the entire life cycle of their actions to determine the true environmental cost.

Profit

The financial bottom line remains a common focus for all companies, but from a triple bottom line perspective, profits should contribute to empowering and sustaining the community as a whole, rather than benefitting only shareholders.

The Triple Bottom Line in Practice

Recognizing the changing workplace dynamics is important. Researching what other companies do to make a positive impact can inspire similar actions. Examples include:

• A shipping company using renewable energy and reducing ecological footprint.
• An ice cream business aiming to cut carbon dioxide emissions and waste.
• A coffee company sourcing beans exclusively from environmentally conscious farmers.
• A tech company focusing on community training and recycling initiatives.

Implementing the triple bottom line method may yield positive responses from colleagues and customers alike.

When to Use the Triple Bottom Line

The Triple Bottom Line functions as a reporting system that facilitates improvements in organizational impact. While it doesn't directly affect outcomes, it helps keep discussions about improving all bottom lines on management's agenda.

Monitoring costs must be weighed against the potential benefits derived from improved stakeholder satisfaction and environmental stewardship.

Key Points

The Triple Bottom Line provides a method for assessing an organization's impact across financial, social, and environmental domains. Companies embracing this approach can enhance stakeholder relationships while reducing negative environmental impacts.

References

• Elkington, J. (1999). Cannibals with Forks: The Triple Bottom Line of 21st Century Business. Capstone.
• Grasso, S. (2020). Extruded snacks from industrial by-products: A review. Trends in Food Science & Technology.
• Arenas-Jal, M., Suà±é-Negre, J. M., Pérez-Lozano, P., & García-Montoya, E. (2020). Trends in the food and sports nutrition industry: A review. Critical reviews in food science and nutrition.
• Zhang, S., Lee, C. K. M., Wu, K., & Choy, K. L. (2016). Multi-objective optimization for sustainable supply chain network design considering multiple distribution channels. Expert Systems with Applications.
• Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review.
• Hackett, A. (2017). The impact of corporate sustainability on organizational processes and performance. Corporate Governance: The International Journal of Business in Society.
• Rawhouser, H. et al. (2019). The challenges of measuring social impact in social enterprises. Social Enterprise Journal.
• Elliott, A. (2018). The triple bottom line: A model for sustainable management. Business Strategy and the Environment.
• Benn, S., & Dunphy, D. (2014). Organizational change for corporate sustainability. Routledge.
• Schaltegger, S., & Wagner, M. (2006). Managing the sustainability business: Theoretical and empirical perspectives. Sustainability Science.