Triple bottom line: Difference between revisions

Latest revision as of 16:27, 16 February 2025

Triple Bottom Line[edit]

The Triple Bottom Line (TBL or 3BL) is a framework or theory that recommends that companies commit to focus on social and environmental concerns just as they do on profits. It is a transformation from the traditional single bottom line of profit to a more comprehensive approach that includes three dimensions of performance: social, environmental, and financial. This concept is often summarized as "people, planet, and profit."

History[edit]

The term "Triple Bottom Line" was coined by John Elkington in 1994. Elkington argued that companies should prepare three different (and quite separate) bottom lines. One is the traditional measure of corporate profit—the "bottom line" of the profit and loss account. The second is the bottom line of a company's "people account"—a measure in some shape or form of how socially responsible an organization has been throughout its operations. The third is the bottom line of the company's "planet" account—a measure of how environmentally responsible it has been.

Components[edit]

People[edit]

The "people" aspect of the Triple Bottom Line pertains to fair and beneficial business practices toward labor 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, labor, and other stakeholder interests are interdependent.

Planet[edit]

The "planet" aspect 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 curtail environmental impact. This includes reducing its ecological footprint by 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.

Profit[edit]

The "profit" aspect is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up. It is the real economic impact the organization has on its economic environment.

Implementation[edit]

Implementing the Triple Bottom Line involves a shift in corporate culture and strategy. Companies may need to adopt new metrics and reporting standards to measure their performance in social and environmental areas. This can involve adopting Corporate Social Responsibility (CSR) initiatives, engaging in sustainability reporting, and integrating sustainable development goals into their business models.

Criticisms[edit]

While the Triple Bottom Line has been praised for encouraging a more holistic approach to business, it has also faced criticism. Some argue that it is difficult to measure social and environmental impacts accurately and that the TBL can be used as a marketing tool rather than a genuine commitment to sustainability.

Related pages[edit]

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 == Triple Bottom Line ==
-The '''Triple Bottom Line''' (TBL or 3BL) is a framework or theory that recommends that companies commit to focus on social and environmental concerns just as they do on profits. It is a way of expressing a company's impact and sustainability on three fronts: people, planet, and profit. The term was coined by John Elkington in 1994.
+[[File:Triple_Bottom_Line_graphic.svg|thumb|right|Diagram illustrating the Triple Bottom Line]]
-== Concept ==
+The '''Triple Bottom Line''' (TBL or 3BL) is a framework or theory that recommends that companies commit to focus on social and environmental concerns just as they do on profits. It is a transformation from the traditional single bottom line of profit to a more comprehensive approach that includes three dimensions of performance: social, environmental, and financial. This concept is often summarized as "people, planet, and profit."
-The Triple Bottom Line is a concept that broadens a business's focus on the financial bottom line to include social and environmental considerations. The three "P's" of the TBL are:
+== History ==
-* '''People''': This aspect considers the fair and beneficial business practices toward labor 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, labor, and other stakeholder interests are interdependent.
+The term "Triple Bottom Line" was coined by John Elkington in 1994. Elkington argued that companies should prepare three different (and quite separate) bottom lines. One is the traditional measure of corporate profit—the "bottom line" of the profit and loss account. The second is the bottom line of a company's "people account"—a measure in some shape or form of how socially responsible an organization has been throughout its operations. The third is the bottom line of the company's "planet" account—a measure of how environmentally responsible it has been.
-* '''Planet''': This 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 curtail environmental impact. It aims to reduce 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.
+== Components ==
-* '''Profit''': The economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up. It is the real economic impact the organization has on its economic environment.
+=== People ===
-== History ==
+The "people" aspect of the Triple Bottom Line pertains to fair and beneficial business practices toward labor 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, labor, and other stakeholder interests are interdependent.
+=== Planet ===
+The "planet" aspect 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 curtail environmental impact. This includes reducing its ecological footprint by 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.
+=== Profit ===
-The concept of the Triple Bottom Line was first introduced by John Elkington in 1994. Elkington argued that companies should prepare three different (and quite separate) bottom lines. One is the traditional measure of of the profit and loss account. The second is the organization has been throughout its .
+The "profit" aspect is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up. It is the real economic impact the organization has on its economic environment.
 == Implementation ==
-Implementing the Triple Bottom Line involves measuring and reporting on the three areas of impact. Companies may use various methods and tools to assess their performance in each area. For example, they might use the Global Reporting Initiative (GRI) standards for sustainability reporting, which provide a comprehensive set of metrics for measuring social, environmental, and economic performance.
+Implementing the Triple Bottom Line involves a shift in corporate culture and strategy. Companies may need to adopt new metrics and reporting standards to measure their performance in social and environmental areas. This can involve adopting [[Corporate Social Responsibility]] (CSR) initiatives, engaging in [[sustainability]] reporting, and integrating [[sustainable development]] goals into their business models.
-== Criticism ==
+== Criticisms ==
-While the Triple Bottom Line has been praised for encouraging businesses to consider their broader impact, it has also faced criticism. Some argue that it is difficult to measure social and environmental impacts accurately and that the TBL can be used as a marketing tool rather than a genuine commitment to sustainability. Others suggest that the three areas of the TBL are not always compatible and that trade-offs may be necessary.
+While the Triple Bottom Line has been praised for encouraging a more holistic approach to business, it has also faced criticism. Some argue that it is difficult to measure social and environmental impacts accurately and that the TBL can be used as a marketing tool rather than a genuine commitment to sustainability.
 == Related pages ==
-* [[Corporate social responsibility]]
+* [[Corporate Social Responsibility]]
 * [[Sustainability]]
-* [[Environmental, social, and corporate governance]]
+* [[Sustainable Development]]
+* [[Environmental, Social, and Corporate Governance]]
-== References ==
-* Elkington, John. "Cannibals with Forks: The Triple Bottom Line of 21st Century Business." Capstone, 1997.
-* Slaper, Timothy F., and Tanya J. Hall. "The Triple Bottom Line: What Is It and How Does It Work?" Indiana Business Review, 2011.
-== External links ==
-* [https://www.globalreporting.org/ Global Reporting Initiative]
-[[File:Triple Bottom Line graphic.svg|thumb|right|300px|Diagram illustrating the Triple Bottom Line framework.]]
+{{Sustainability}}
 [[Category:Sustainability]]
+[[Category:Business ethics]]
 [[Category:Corporate social responsibility]]