As compliance for your energy management systems gets more complex, and expectations for your social responsibility are getting higher, what keeps companies on the right track for their sustainable practices? In 1994, John Elkington—a prominent British management and sustainability consultant—coined the phrase “triple bottom line” or TBL method. The idea was his way of measuring performance in corporate America and uncovers how to manage a company in a way that not only earns financial profits but also improves people’s lives and our planet.
Instead of solely focusing on their bottom line, many companies are now adopting the triple bottom line sustainability system. TBL entails taking into account not only whether your company is profitable, but instead considers the three P’s; people, planet and profits. This mindset is encouraging decision making to no longer just be based upon the almighty dollar, but also the community your business impacts and the environment we all live in.
Why Use the Triple Bottom Line Sustainability Method?
By using the Triple Bottom Line method, your business can expand how it understands its position in the current economy and its ability to survive in the future. Corporate sustainability measures your ability to be in business indefinitely. This is based on your impact on the environment, your relationship to your community, as well as the contribution to your economy. In reality, all three factors play a major role in determining if your business can stay in business and generate a profit. According to the TBL method, no single bottom line can sustain a business alone but must be a simultaneous effort.
The 3 “P’s” of the Triple Bottom Line
According to TBL theory, companies should be working on these three bottom lines in parallel with one another:
- Profit: The financial bottom line is the one that all companies share, whether or not they’re using the triple bottom line method. This is the traditional measure of corporate profit—the profit and loss (P&L) account within a local, national, or international economy.
- People: This “P” covers the most important stakeholders, including employees, the labor involved in a corporation’s work, and the wider community where a corporation does business. It takes everyone’s well-being into consideration and measures how socially responsible an organization has been throughout its operations.
- Planet: Measures how environmentally responsible a firm has been and indicates that an organization tries to reduce its ecological footprint as much as possible. These efforts can include reducing waste, investing in renewable energy, managing natural resources more efficiently, and improving logistics.
By focusing on these three elements, triple-bottom-line reporting can be an important tool to support a firm’s sustainability goals. Unlike the traditional method, the Triple Bottom Line allows you to see your business as a social and environmental entity and measure it along these parameters.
Sounds great! But how can you get started? Learn what Gensuite Environmental Management Application Modules are perfect for hitting each step of your Triple Bottom Line.