Traditional economic theory dictates that ultimately any business or corporation will be successful only if it can make a financial profit; that is, keep the bottom financial line in the black. On the face of it, this makes a lot of sense. After all, if you keep on losing money it will be impossible to continue operating indefinitely.
However, increasingly the concept of maintaining a “triple bottom line” in your business venture is gaining traction around the world. This term was first coined by John Elkington in 1994. “His argument was that companies should be preparing 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 operation. The third is the bottom line of the company’s ‘planet’ account – a measure of how environmentally responsible it has been.”
By the turn of the century this focus on the three P’s – Profit, People and Planet – was beginning to catch on, especially as the hidden social and environmental costs of transferring production and services to low-cost countries began coming to light.
In 2010, this movement got a significant boost with the publication of the book, People, Planet, Profit: How to Embrace Sustainability for Innovation and Business Growth, by Peter Fisk. In his book, Fisk made the case that successful businesses of the future will need to embrace this triple bottom line if they are to remain sustainable. Of course, these three bottom lines must be measured differently from each other, but Fisk says that we need to develop ways of doing so because an increasingly informed and concerned global population is demanding it be done. Businesses insisting on staying with the single bottom line paradigm will find themselves increasingly moved to the edges.
In State of the World 2014, Colleen Cordes documents the growing number of corporations around the world that are adopting the paradigm of the triple bottom line. She notes that, “A remarkable new breed of business is volunteering to be held publicly accountable to a triple bottom line: prioritizing people and the planet, while also promoting profits.”
A striking example of what can be done is that undertaken by Waste Management Phoenix Open at the world’s highest-attended golf tournament. “For the second consecutive year, the Waste Management Phoenix Open has diverted 100 percent of waste away from landfills amid this year’s record attendance of 563,008 fans… In total, the combined recycling, composting and waste-to-energy efforts avoided 346 metric tons of greenhouse gas emissions and recycling efforts conserved: 632 mature trees, 368,690 gallons of water, 471,248 kilowatt-hours of electricity, and 969 cubic yards of landfill space.”
Of course such a venture requires a lot of planning and moral and political will. But it demonstrates that there is a positive way forward by focusing on the triple bottom line.
ACAN seeks to educate and inspire sustainable practices in our community.
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