The concept of triple bottom line

In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. Examples of stakeholders include employees, customers, suppliers, local residents, government agencies, and creditors. According to the stakeholder theorythe business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder owner profit.

The concept of triple bottom line

The concept of triple bottom line

In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. Examples of stakeholders include employees, customers, suppliers, local residents, government agencies, and creditors. According to the stakeholder theorythe business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder owner profit.

A growing number of financial institutions incorporate a triple bottom line approach in their work.

The concept of triple bottom line

It is at the core of the business of banks in the Global Alliance for Banking on Valuesfor example. The Detroit -based Avalon International Breads interprets the triple bottom line as consisting of "Earth", "Community", and "Employees".

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The Triple Bottom Line Defined

April Learn how and when to remove this template message The triple bottom line consists of social equity, economic, and environmental factors. The phrase, "people, planet, and profit" to describe the triple bottom line and the goal of sustainabilitywas coined by John Elkington in while at Sustain Ability, [10] and was later used as the title of the Anglo-Dutch oil company Shell's first sustainability report in As a result, one country in which the 3P concept took deep root was The Netherlands.

People, the social equity bottom line[ edit ] The people, social equity, or human capital bottom line pertains to fair and The concept of triple bottom line business practices toward labour and the community and region in which a corporation conducts its business.

A TBL company conceives a reciprocal social structure in which the well-being of corporate, labour and other stakeholder interests are interdependent.

An enterprise dedicated to the triple bottom line seeks to provide benefit to many constituencies and not to exploit or endanger any group of them. The "upstreaming" of a portion of profit from the marketing of finished goods back to the original producer of raw materials, for example, a farmer in fair trade agricultural practice, is a common feature.

In concrete terms, a TBL business would not use child labour and monitor all contracted companies for child labour exploitation, would pay fair salaries to its workers, would maintain a safe work environment and tolerable working hours, and would not otherwise exploit a community or its labour force.

A TBL business also typically seeks to "give back" by contributing to the strength and growth of its community with such things as health care and education.

Quantifying this bottom line is relatively new, problematic and often subjective. Planet, the environmental bottom line[ edit ] The planet, environmental bottom line, or natural capital bottom line refers to sustainable environmental practices.

A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and minimize environmental impact.

A TBL endeavour reduces its ecological footprint by, among other things, carefully managing its consumption of energy and non-renewables and reducing manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and legal manner.

Currently, the cost of disposing of non-degradable or toxic products is borne financially by governments and environmentally by the residents near the disposal site and elsewhere. In TBL thinking, an enterprise which produces and markets a product which will create a waste problem should not be given a free ride by society.

It would be more equitable for the business which manufactures and sells a problematic product to bear part of the cost of its ultimate disposal.

Ecologically destructive practices, such as overfishing or other endangering depletions of resources are avoided by TBL companies. Often environmental sustainability is the more profitable course for a business in the long run.

Arguments that it costs more to be environmentally sound are often specious when the course of the business is analyzed over a period of time. Generally, sustainability reporting metrics are better quantified and standardized for environmental issues than for social ones.

The ecological bottom line is akin to the concept of eco-capitalism. It therefore differs from traditional accounting definitions of profit.

In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment.

This is often confused to be limited to the internal profit made by a company or organization which nevertheless remains an essential starting point for the computation.With this in mind, I’m volunteering to carry out a management concept recall: with marking the 25th anniversary of the “triple bottom line,” a term I coined in , I propose a strategic recall to do some fine tuning.

The triple bottom line, however, is an organisation-level concept: the two need joining up and this is very difficult, if not impossible.

What is the 'Triple Bottom Line (TBL)'

The triple bottom line model not just only measures the success or health of a corporation through just by its traditional financial bottom line but also the social ethical and environment performance (Macdonald C & Norman W, ). The triple bottom line is a term coined in the late s by the influential business thinker and consultant, John Elkington.

It captures a very neat idea, namely that a modern organisation has. The phrase “the triple bottom line” was first coined in by John Elkington, the founder of a British consultancy called SustainAbility.

His argument was that companies should be preparing three different (and quite separate) bottom lines. The triple bottom line (TBL) is a concept which broadens a business' focus on the financial bottom line to include social and environmental considerations.

Why the Triple Bottom Line Matters More Than Ever | GreenBiz