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The Triple Bottom Line and How It’s Transforming Capitalism

Nearly three decades after it was first developed by John Elkington, the triple bottom line is continuing to generate attention and advocates within the business community. To this I say, it is definitely about time!

The triple bottom line is a framework that moves beyond the confines of business-as-usual. It advocates for a comprehensive approach, taking stock of: Profit, People and Planet1, referred to as the 3Ps. In other words, it measures financial or economic metrics with that of environmental and social impact. Tech company CEO Mitch Tyson described it as “finding a way to simultaneously please your investors and impress your grandchildren.2

The Triple Bottom Line & It's Impact on Capitalism - People, Planet, Profit

Related Post: Why the World Needs Social Entrepreneurs

The beauty of the Triple Bottom Line framework is that it supports and encourages sustainability goals. The Economist noted the principle that underlies the framework: “what you measure is what you get, because what you measure is what you are likely to pay attention to.3 By generating a comprehensive accounting of a company’s way of doing business, it is in a better position to understand its impact across a full range of measures and take steps to ensure social and environmental accountability and responsibility.

This is the strongest argument of the Triple Bottom Line framework against capitalism which only looks at one aspect of a business – profitability. By applying the Triple Bottom Line  framework, a holistic picture is presented which enables the search for greater efficiency, ensuring competitiveness and sparking innovation – the three things that Tyson points out as drivers of profitability over time.4

Over the years, several businesses have actually demonstrated the effectiveness of following this sustainability framework.

Recognizing the devastating effect of plastics to marine life which ingests this non-biodegrable material, Saltwater Brewery in Delray Beach in Florida, released edible six-pack rings which are 100 percent biodegradable and edible. It is made of barley and wheat, hence even if it ends up in the sea, it can be safely eaten by marine life.5 This illustrates sustainable business practices and positively elevates the brand.

Tyson relates that his company, Advanced Electron Beams, produces energy-efficient and non-polluting technology that can replace technologies that have strong negative impact on the environment. According to him, by getting a company to convert the technology of their drying ovens with their electron beams, they can save energy and minimize pollution and carbon footprint.6

Related Post: The Rise of Conscious Capitalism

Better World Books, a social venture program, sells used books. In doing so, they have been able to keep books out of landfills while at the same time donating profits to fund literacy programs.7

REI, an outdoor equipment and clothing retailer, has successfully launched for two years in a row the #OptOutside campaign. Instead of giving in to the Black Friday shopping mania, it gives its 12,287 employees a paid vacation day on one of the busiest shopping days of the year. At the same time, it encourages its customers to spend time outdoors with friends and families instead of shopping. This gives REI a positive impact as an employer and as a brand.8 

All these examples show that it is indeed possible to walk the talk of the Triple Bottom Line framework. For most businesses, the main difficulty of adapting to this framework is the issue of measuring and quantifying the values across the 3Ps. Unfortunately, there is no one-size-fits-all measure and each aspect: profit, people and planet will have different factors. For ethical businesses interested in determining what indicators to use for measuring their Triple Bottom Line, Slaper and Hall9 presents the following:

Profit or Economic Measures

This is the usual monetary aspect of a business. This can be measured by indicators such as income, taxes, business climate factors, employment and business diversity factors.

People or Social Measures

This refers to social dimensions and can include measures of education, equity and access to social resources, health and well-being and quality of life and social capital.

The Triple Bottom Line & Why It's Transforming Capitalism - Helping People & Communities

Planet or Environmental Measures

The important variables here are natural resources and impacts on its viability. Measures can include air and water quality, energy consumption, natural resources, solid and toxic waste and land use/land cover. 

While these scorecards may take a while to get used to, the most important thing to remember is that in this day and age, capitalism and looking at profit margins will not simply cut it. In order for a business to thrive, sustainability is the way to go.

Thinking of starting a conscious business? Make sure to check out our post Eco Start-Ups: 8 Green Entrepreneurship Business Ideas.

Show 9 footnotes

  1.  Slaper, T. & Hall, T. 2011. The Triple Bottom Line: What Is It and How Does It Work? Indiana Business Review, 2011. Vol. 86, No. 1. Available at: http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html.
  2.  Tyson, M. 2010. Why The Triple Bottom Line Matters More Than Ever. GreenBiz, 08 January 2010. Available at: https://www.greenbiz.com/blog/2010/01/08/why-triple-bottom-line-matters-more-ever.
  3.  The Economist. 2009. Triple Bottom Line. The Economist, 17 November 2009. Available at: http://www.economist.com/node/14301663.
  4.  Tyson, M. 2010. Why The Triple Bottom Line Matters More Than Ever. GreenBiz, 08 January 2010. Available at: https://www.greenbiz.com/blog/2010/01/08/why-triple-bottom-line-matters-more-ever.
  5.  Galanty, H. 2016. Saltwater Brewery Creates Edible Six-Pack Rings. CraftBeer.com, 13 May 2016. Available at: https://www.craftbeer.com/editors-picks/saltwater-brewery-creates-edible-six-pack-rings.
  6.  Tyson, M. 2010. Why The Triple Bottom Line Matters More Than Ever. GreenBiz, 08 January 2010. Available at: https://www.greenbiz.com/blog/2010/01/08/why-triple-bottom-line-matters-more-ever.
  7.  Richardson, J. 2016. 10 Triple Bottom Line Businesses. Inspired Economist, 14 March 2016. Available at: http://inspiredeconomist.com/2016/03/14/10-triple-bottom-line-businesses/.
  8.  Oksman, O. 2016. REI bucks Black Friday mania and tells people to #OptOutside instead. The Guardian, 24 November 2016. Available at: https://www.theguardian.com/business/2016/nov/24/rei-black-friday-opt-outside-thanksgiving-shopping.
  9.  Slaper, T. & Hall, T. 2011. The Triple Bottom Line: What Is It and How Does It Work? Indiana Business Review, 2011. Vol. 86, No. 1. Available at: http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html.

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About the author

Polly Michelle Cunanan

Polly Michelle Cunanan

Polly Michelle Cunanan is a results-driven media and communication expert with over 15 years of experience and proven track record in working with the Philippine Government and donor agencies such as the USAID, World Bank, UN-FAO, ADB, European Union (EU) and media. Political and strategic communication, messaging and campaigns are among her expertise. She spearheaded the communication program on the Bangsamoro peace process which led to a conducive environment for the signing of the historic Comprehensive Agreement on the Bangsamoro between the Government of the Philippines and the Moro Islamic Liberation Front. She is a graduate of BA Broadcast Communication from the University of the Philippines and has completed the academic requirements for MA Communication Research from the same university. She is a UK Chevening scholar currently studying MA International Public Relations and Global Communications Management at Cardiff University.

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