The Triple Bottom Line: People, Planet, Profit
The Triple Bottom Line: People, Planet, Profit
Every day, we interact with businesses and corporations at various levels. From the coffee you grab in the morning post-workout to the doors of the company you walk into for your workday, many of these organizations drive society and establish our social culture as we know it. But where did those coffee beans come from? Who was responsible for their harvest? How did they arrive at the shop to ultimately end up giving you the energy boost needed to kickstart your day?
In a world dominated by commerce and the web of our global economy, it’s critical that we consider a business’ impact across its entire scope of operations. The triple bottom line (TBL), or the ‘three Ps of sustainability,’ offers a framework for company management that equally prioritizes social, environmental and financial performance. This challenges the conventional business model approach, where a company focuses solely on its profit or earnings.
What Is the Triple Bottom Line?
The TBL structure is built foundationally around sustainability, considering supply chain management, strategic partnerships and environmentally conscious practices, among others, for optimal business management. Simply put, a TBL matrix considers the implications of conducting business in an intersectional, holistic way. Let’s look more closely at what each of these approaches entails to better understand the definition of the triple bottom line:
People have a stake in all corporations and at all levels of a company’s supply chain and business operations. As such, this pillar of the triple bottom line architectural framework assesses the organization’s social impact, measuring how companies create value for all groups that interact with the company. This includes a broad spectrum of demographics, from employees and consumers to contractors and suppliers. This may manifest itself in a number of ways, with relevant, company-sanctioned volunteer opportunities as an example of this.
This pillar considers how we interact with our planet and what are the positive and negative implications of this relationship. Since the beginning of the Industrial Revolution over 200 years ago, society began relying on fossil fuels for energy, powering the global economy as we know it today. However, fossil fuel combustion is extremely carbon-intensive and has resulted in the highest levels of carbon dioxide (CO2) expelled into the atmosphere in the past 3 million years. Companies and global organizations are uniquely positioned to effect change in the way they conduct business and advance solutions to mitigate environmental impacts. This can manifest across a company’s supply chain in a number of ways, ranging from equitable and environmentally responsible resource extraction and waste management practices to renewable energy use and meaningful supplier relationships that prioritize limiting harmful emissions like carbon dioxide and methane.
A key indicator of a successful enterprise is its financial performance, or profit. It’s no secret that companies want to maximize profit and a lot of businesses center their operations, goals and deliverables around economic growth as a way to demonstrate fiscal responsibility to their shareholders. Within the triple bottom line framework, profit continues to exist as a bottom line, but is weighed just as equally as social and environmental impact. This considers the ways in which a company can sustain itself financially and grow, while also investing in sustainable practices and initiatives that enhance the experience of the organization’s employees and stakeholders. In practice, a company may source locally or invest in small businesses within its community, all in an effort to generate greater economic wealth, which is broadly beneficial. Beyond this, the profit pillar also provides a tangible tool for firms to quantify the People and Planet risks and opportunities mentioned above. While creating financial metrics for these impacts may be difficult, they create a common language to understand overarching business performance.
Triple Bottom Line in Practice
Our planet’s global economy is a deep, interconnected web of relationships that provides us with access to the resources we’ve grown accustomed to and rely on daily. However, in a world where there is climate uncertainty and an urgent need to decrease greenhouse gas emissions, it becomes increasingly important that we ignite a widespread transformation that looks at operating businesses and our economy holistically and in a revolutionized way. There’s an enormous economic benefit to this, too. In fact, studies demonstrate that there is a positive trend and demand for a sustainable market, with projections claiming a green economy could generate more than $12 trillion in sales by 2030. Businesses, nonprofit organizations, and governments at the state, local and regional levels can all implement the principles of TBL into their organizational structures and put the triple bottom line definition into practice.
Far beyond it being a compelling investment, the TBL challenges us to ignite an entire systems change at the foundational level, and in a way that considers and upholds the interconnectedness of the planet, and the people and profits that govern it. The triple bottom line is a sustainability framework that measures the value added or destroyed by an organization’s economic, social and environmental operations, and must be considered as an integral and necessary component, rather than as a system of trade-offs. At AIR COMPANY, we are fueled by the promise of innovation and prioritize taking a solutions-oriented approach to addressing some of our world’s most complex and pressing issues.