Triple Bottom Line

Triple Bottom Line

People. Planet. Profit. These are the three pillars that one may think of when it comes to developing an understanding for what is known as the triple bottom line. The triple bottom line is also referred to as TBL or 3BL, and for the purpose of this paper it will be called TBL.

John Elkington coined the phrase “TBL” in his 1997 book entitled Cannibals with Forks: the Triple Bottom Line of 21st Century Business (“Triple Bottom Line”, n.d.). His argument was that companies should be preparing three different bottom lines. These lines are in place to measure the financial, social and environmental performance of the corporation over a period of time.

The first bottom line consists of a profit and loss account. The second bottom line deals with the people account within a company. This line in particular consists of a measure in some shape or form of how socially responsible an organization has been throughout its operations (“Idea: Triple Bottom Line”, November 2012). The last bottom line is the planet account, and this focuses on the measuring of how environmentally responsible an organization has been.

The three levels to TBL like aforementioned are the people, planet, and profit. Yet, the words and definitions go beyond that. The actual definition of TBL calls for the actual titles to be labeled as social, ecological/environmental, and economic. This framework takes into account those social and environmental performance measures in addition to financial performance (“Triple Bottom Line”, n.d.).

Giving consideration to the company’s social, economic, and environmental impact instead of just the financial aspect is vital for a company’s image and overall representation. The concept of TBL suggests that a company’s responsibility is with the stakeholders rather than shareholders (“Why the Triple Bottom Line Matters More Than Ever”, January 8, 2010).

Stakeholders are anyone that is influenced by the actions of the firm, whether it is directly or indirectly. According to the actual stakeholder theory, it suggests that the business entity should be used as a vehicle or aid in coordinating stakeholder interests, instead of focusing on the maximizing of their own shareholders profit.

Many companies are now volunteering to be held publicly accountable by abiding by the triple bottom line (“Triple Bottom Line for a Sustainable Economy”, n.d.). This forces those companies to not only prioritize their own profits, but also people and the planet as well. Brand loyalty increases when consumers feel as though their