It is hard to believe, but there was a time when no one even thought to question the sustainability of a business. As awareness grew on the significant impact corporations have on people and the planet, pressure was put on businesses to act more responsibly. In order to address consumer concerns, businesses began to look for a way to measure more than just profit, and two more bottom lines were added to the mix.
The Triple Bottom Line (TBL) is a framework that allows businesses to measure its sustainable development and make sure it is meeting its goals. Today, a business could never be successful if it completely disregards how its practices impact our world. In the book The Triple Bottom Line, Andrew Savitz writes, "a sustainable business stands an excellent chance of being more successful tomorrow than it is today, and remaining successful, not just for months or even years, but for decades or generations." For these reasons, it is very likely the company you join will use TBL to evaluate its performance.
The 3 Ps: People, Planet and Profit
John Elkington coined the term in his work, Cannibals with Forks: The Triple Bottom Line of 21st Century Business. Elkington explained TBL is composed of three major fields: social, environmental and financial; also commonly referred to as the three Ps: People, Planet and Profit. The TBL requires a company to go beyond just measuring profit, and to take accountability for its social and environmental impact. Social impact is reflected in how a business treats its workers; those who work for a company should have a safe working environment and fair wages. Environmental impact is how the practices of a business affect the planet; a business should focus on doing as little harm as possible to the natural environment. Profit is exactly what it is sounds like; it is the financial gain a business makes, measured in dollars.
Measuring It is Problematic
Although the TBL has benefited companies and consumers, there are challenges to using it. One downside to the TBL is it can be tricky to measure. According to the Indiana Business Review, there is no universal way to calculate TBL, which means a business can adapt the TBL framework to its specific needs. For example, the business stakeholders can determine a set of measurements to be used depending on the sustainability goals of the company. These measurements depend on the type of project and geographic scope. However, the triple bottom line is a balancing act, and each field needs to be represented equally when measuring.
The Most Sustainable Companies
There are some corporations that have seen huge success financially while going above and beyond to be sustainable. Clothing line H&M outlines the actions the business takes in its 2013 sustainability report. The report highlights the conscious actions H&M takes, such as buying organic cotton and providing workers with fair wages. Patagonia is another company that has complete transparency by highlighting its sustainable practices in their Footprint Chronicles. The outdoor clothing company works to do as little harm as possible to the environment when assembling products, and ensures they are all made under safe and fair working conditions. All types of businesses can take actions to be more sustainable, check out Forbes 2014 list of the world's most sustainable companies.
A Better Future
Although it is not simple to measure, the TBL provides a framework for businesses to take accountability for its social and environmental impact, instead of solely focusing on profit. Today, if a business dumped toxic waste in a river and had horrific factory conditions, the media would report on it, and it would negatively impact the long-term success of the company. More and more companies are taking actions to become more sustainable, and it is important for students to understand the TBL before entering the workforce. Having an understanding of the TBL framework not only will help you stand out as a job candidate, but it will also allow you to research a company and make sure you work for one that is not only focused on profit.