Sustainability has become a trendy catch-all “do good” business marketing term. It can mean wildly different things with no objective measurement or substance.
In reality, sustainability should signify that an organization practices the triple bottom line strategy. This is the concept of aligning non-financial aspects within business practices for the maximum benefit of people, planet, and prosperity.
Through the triple bottom line strategy, sustainability leaders have the opportunity to consciously engage coworkers, leaders, and other stakeholders. Operating through this framework with metrics and standards in place offers opportunities for optimization, innovation, and improvement across industries and sectors. As a result of focusing on the triple bottom line, we all can make measurable, sustainable progress globally.
Before getting into all the ins and outs of this strategy and its benefits, let’s first discuss what the triple bottom line is.
What is the Triple Bottom Line
In 1997, John Elkington coined the business concept of the triple bottom line (TBL). It transformed the existing financial accounting-focused business system to take on a more comprehensive approach in measuring success.
In the past, businesses tended to focus strictly on their financial bottom line. Today, however, many organizations understand success goes beyond their profit and loss statements. This is where the triple bottom line strategy comes in. It expands business success metrics to include contributions to environmental health, social well-being, and an equitable and just economy.
To get a well-rounded perspective of business operations, organizations must fully account for all costs associated with doing business by going beyond profits and mere code compliance.
Certified B Corporations are a prime example of the triple bottom line concept. B Corps become legally required to consider impacts on all stakeholders, including employees, customers, suppliers, community, and environment. They are a community of businesses that drive a global movement of people using business as a force for good.
“The triple bottom line wasn’t designed to be just an accounting tool. It was supposed to provoke deeper thinking about capitalism and its future.”John Elkington, in his Harvard Business Review article
The three “P’s” is another way to refer to the triple bottom line. It stands for: people, planet, and prosperity.
Breaking down the 3 P’s
The 3 P’s of the triple bottom line are designed to be interconnected with a deliberate focus on the alignment and success of the overlapping areas for optimal sustainability.
The people category considers all stakeholders, not just shareholders. This includes employees, individuals throughout the supply chain, communities impacted by how and where the organization and supply chain operates, future generations, customers, and more.
Triple bottom line focused organizations typically take up initiatives that align with the business activities to advance human rights; address poverty and hunger, diversity, equity, and inclusion; gender equity; ensuring a healthy and safe work environment; and community engagement and volunteerism.
Corporate social initiatives benefit stakeholders, but adopting this business strategy is essential for genuinely sustainable business success. For example, Florida For Good and Impact Mission Miami creates a robust community by pooling businesses’ resources to maximize impacts and unite B Corps to advance the movement in Florida.
Consumers are increasingly aware of the climate change and social justice consequences businesses have on the environment, community, and economy. According to a 2020 Climate Change in the American Mind survey, “Nearly six in ten (roughly 58 percent) of Americans are now either ‘Alarmed’ or ‘Concerned’ about global warming. From 2014 to 2019, the proportion of ‘Alarmed’ nearly tripled.”
“6 in 10 of Americans are now either ‘Alarmed’ or ‘Concerned’ about global warming”
In an age where there is so much information sharing on social media and other forms of activism, consumers are demanding transparency and accountability from brands. Consumers. reward organizations for their positive impacts through brand loyalty. On the other hand, consumers hold organizations not aligned with eco-friendliness through actions such as boycotting.
We’ve witnessed leading sustainable businesses adopting practices that help minimize environmental impact and a step further down the path by creating a net-positive or regenerative impact on the environment and society. For example, industry power-house activist Patagonia & 1 Percent for the Planet make it easier for stakeholders to hold organizations accountable for their actions.
Prosperity (Originally Called Profits)
Prosperity includes creating employment, generating innovation, paying taxes, wealth creation, and any other economic impact an organization has. This not only keeps with the traditional measure of corporate profits but also, expands into stakeholder prosperity (not simply corporate income).
The triple bottom line strategy creates economic progress in connection with overall well-being. For example, the United Nations (U.N.) created Sustainable Development Goals (SDGs) that “ensure all human beings can enjoy prosperous and fulfilling lives and that economic, social, and technological progress occurs in harmony with nature.”
The SDGs serve as a guide to improve a wide range of areas related to the environment, people, and economic opportunities. Prosperity-focused goals aim to provide decent work with safe working conditions, living wages, and economic growth.
Examples from the U.N.’s SDGs of how businesses can help support the prosperity of their stakeholders include:
- By 2025, take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking. Additionally, prohibit and eliminate all forms of child labor, including recruitment and use of child soldiers.
- By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products.
Triple Bottom Line and the Future of Business
Consumers and other stakeholders are no longer satisfied with meager attempts at corporate social responsibility via feel-good marketing and no real action.
Instead, we are moving towards a shift in the outdated business model with careful and transparent consideration for people, planet, and prosperity. This is leading to increased resilience, decreased organizational risk, and increased overall success and satisfaction for all stakeholders involved.