By Rachel Roberts
With current environmental problems such as climate change, water shortages, and increased pollution, many corporations are beginning to integrate sustainability into company goals. Sustainability however, is a difficult concept, holding different meanings to different people. With sustainability being such a multidimensional concept, there is concern over how can it be successfully and accurately measured. That’s where the triple bottom line comes into play.
Coined by John Elkington, the triple bottom line is an accounting framework going beyond traditional forms of measurement for profit and investment return. It takes into account social, environmental (ecological), and financial factors; it is also commonly called, “the three Ps”—people, planet, and profit. Andrew Savitz, author of the book “The Triple Bottom Line,” believes that this concept “captures the essence of sustainability by measuring the impact of an organization’s activities on the world… including both its profitability… and its social, human and environmental capital.”
Together, sustainability and business could be powerful allies. Sustainable businesses would be ones that not only promote economic profit, but also conduct business in a manner that uses earth’s resources for the greatest number of people, for the longest period of time.
At the moment, there is no commonly accepted way to calculate the triple bottom line, as profit, people, and planet are all measured on different scales. However, there currently are two suggested ways to measure the triple bottom line. The first is converting each of the three categories to dollars. Although it would be beneficial to have a common unit to measure each of the three, there are some concerns over putting price tags on endangered species or old growth forests. Another option would be indexing each of the categories so that each would be measured in its most appropriate form. For example, old growth forests would be indexed and measured per acre, while profit would be indexed and measured in dollars.
There is still much to be figured out but the concept could initially serve as a baseline or guiding framework for sustainable business and entrepreneurship. Whole Foods, The Body Shop, and Patagonia are all examples of successful companies who are already embracing the triple bottom line. All three seek to reduce resource and energy consumption, while attempting to attract sustainable and socially responsible investors.
As environmentally conscious consumers, we could make a deliberate choice to support companies that embrace the triple bottom line framework. By supporting businesses who operate in a way that embraces the three Ps, not only are we supporting sustainable business practice, we are encouraging other businesses to do the same. As consumers, we can influence businesses’ triple bottom line—People, Planet, and Profit!
“Environment: Healing the Web of Life.” Sustainable World Sourcebook: Critical Issues, Viable Solutions, Resources for Action. Berkeley, CA: Sustainable World Coalition, 2014. 92-94. Print.
Slaper, Timothy, and Tanya Hall. “The Triple Bottom Line: What Is It and How Does It Work?” The Triple Bottom Line: What Is It and How Does It Work? Indiana Business Review, 1 Jan. 2011. Web. 14 Nov. 2014. < http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html>.
“Sustainable Business Strategies.”Sustainable Business Strategies. Web. 14 Nov. 2014. <http://www.getsustainable.net/>.