The Triple Bottom Line of Protecting People, Planet and Profits (or Simply PR)?
In this series we have seen many interesting perspectives on building a sustainable (and ethical) business mindset. For my part, I’d like to review the pros and cons of one of the original ‘better business’ frameworks – the Triple Bottom Line.
For those who are not already familiar, the Triple Bottom Line = People, Planet and Profit.
This is a term first coined back in 1994 by sustainability thought leader John Elkington. It describes a business model that forces companies to focus not just on healthy profits (the traditional bottom line), but also on high business integrity and environmental sensitivity – resulting in both successful business strategy and moral business practice.
Now fast forward to 2020 and it should be noted that (in his book Green Swans) Elkington talks of wishing he could retract the concept of the Triple Bottom Line – not because it is bad, but because he is dismayed by how it is being used (or mis-used) in many businesses today.
He feels that many organisations are hiding behind the construct, just paying lip service and using it as a tick box exercise – without any real genuine desire to change the fundamentals of their commercially-driven business models.
And he makes a good point. Like so much surrounding business ethics and sustainability, it is important to embark on this with genuine commitment, not just for PR purposes.
Let us remember that profit is not in itself a bad thing – businesses need to be commercially viable (it’s hard to be green, when you are in the red). It’s how you make the profit and what you do with it that matters.
Financial reporting has internationally recognised frameworks that we are all familiar with. Non-financial reporting is less established and therefore less clearly and consistently measured. More and more businesses are now turning to robust certification models such as B Corp, but the entry criteria is still out of reach for many corporations (although the B Impact Assessment process is highly recommended to help set anyone on the right track).
As we await other internationally recognised standards for non-financial reporting, the question still remains: how can a business easily quantify its environmental and social impact?
The Triple Bottom Line works because it incorporates people and the planet. Where it falls down is when companies fail to attach tangible initiatives (with metrics and targets) to their beautifully crafted vision, value and purpose statements.
And, as they say, you cannot manage what you don’t measure, so it’s important that you set goals with clear accountability.
A good starting point is to simply re-imagine what business success could look like for your organisation – establishing specific initiatives for serving people and preserving the planet. And then, most importantly, reporting on these to stakeholders with as much authority (and pride) as your financial performance.
- Does your business ‘serve’ society/humanity?
- Can you give specific examples of how your product or service helps people?
- Are there people who would genuinely benefit from your products or services but cannot afford them? How can you factor in some free or subsidised access?
- What specific initiatives/outcomes are you committed to that ‘serve’ your employees, your suppliers, your neighbours or communities?
PRESERVING THE PLANET:
- Does your business help ‘preserve’ natural resources?
- Do you have a robust plan in place to reduce your environmental footprint?
- Where do you currently demonstrate product recycling, refurbishing, remanufacturing (circular economy)?
- How do you encourage responsible consumption?
- What specific initiatives/outcomes are you committed to that help ‘preserve’ our planet?