| Three
pillars of TBL
People
Planet
Profit
Triple
Bottom Line
Triple bottom line means expanding the traditional framework to
take into account ecological and social performance in addition
to financial performance.
In 1981 Freer
Spreckley first articulated the term in a publication called 'Social
Audit - A Management Tool for Co-operative Working'. Sustainability,
itself, was first defined by the Brundtland Commission of the United
Nations in 1987.
The phrase was coined by John Elkington in his book ’Cannibals
with Forks: the Triple Bottom Line of 21st Century Business’
in the year 1998. The concept of TBL demands that a company's responsibility
lies with stakeholders rather than shareholders.
In this case, "stakeholders" refers to anyone who is influenced,
either directly or indirectly, by the actions of the firm.
Interdependence
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.
PEOPLE
"People" (human capital) pertains to fair and beneficial
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.
PLANET
"Planet" (natural capital) 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.
A TBL endeavor reduces its ecological footprint by, among other
things, carefully managing its consumption of energy and non-renewable
and reducing manufacturing waste as well as rendering waste less
toxic before disposing of it in a safe and legal manner.
TBL manufacturing businesses which typically conduct a life cycle
assessment of products to determine what the true environmental
cost is from the growth and harvesting of raw materials to manufacture
to distribution to eventual disposal by the end user.
A triple bottom line company does not produce harmful or destructive
products such as weapons, toxic chemicals or batteries containing
dangerous heavy metals for example.
PROFIT
"Profit" is the economic value created by the organization
after deducting the cost of all inputs, including the cost of the
capital tied up.
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).
Therefore, an original TBL approach cannot be interpreted as simply
traditional corporate accounting profit plus social and environmental
impacts unless the "profits" of other entities are included
as a social benefits.
Triple
bottom line
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