Triple bottom line
Over the last 50 years, environmentalists and social justice advocates have struggled to bring a broader definition of bottom line into public consciousness by introducing full cost accounting.
In the private sector, a commitment to corporate social responsibility (CSR) implies an obligation to public reporting about the business's substantial impact for the better of the environment and people.
In 1981, Freer Spreckley first articulated the triple bottom line framework in a publication called Social Audit - A Management Tool for Co-operative Working.
[8] In this work, he argued that enterprises should measure and report on financial performance, social wealth creation, and environmental responsibility.
Elkington suggests that it can be, particularly in the case of "sustainable capitalism", wherein competing corporate entities seek to maintain their relative position by addressing people and planet issues as well as profit maximisation.
The Detroit-based Avalon International Breads interprets the triple bottom line as consisting of "Earth", "Community", and "Employees".
A TBL company conceives a reciprocal social structure in which the well-being of corporate, labour and other stakeholder interests are interdependent.
An enterprise dedicated to the triple bottom line seeks to provide benefit to many constituencies and not to exploit or endanger any group of them.
The "up streaming" of a portion of profit from the marketing of finished goods back to the original producer of raw materials, for example, a farmer in fair trade agricultural practice, is a common feature.
A TBL business also typically seeks to "give back" by contributing to the strength and growth of its community with such things as health care and education.
In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society.
This is often confused to be limited to the internal profit made by a company or organization (which nevertheless remains an essential starting point for the computation).
[citation needed] Following the initial publication of the triple bottom line concept, students and practitioners have sought greater detail in how the pillars can be evaluated.
The following business-based arguments support the concept of TBL: Government fiscal policies usually claim to be concerned with identifying social and natural deficits on a less formal basis.
The argument is that the Earth's carrying capacity is at risk, and that in order to avoid catastrophic breakdown of climate or ecosystems, there is need for comprehensive reform of global financial institutions similar in scale to what was undertaken at Bretton Woods in 1944.
While the motive of this number was to simply assign responsibility for a cleanup, such stark honesty opens not just an economic but political door to some kind of negotiation — presumably to reduce that ratio in time to something seen as more equitable.
On days when Whole Foods donates 5% of their sales to charity, this action benefits the community, creates goodwill with customers, and energizes employees, which may lead to increased, sustainable profitability in the long-run.
[16] Furthermore, planning a sustainability strategy with the triple bottom line in mind could save companies a lot of money if a disaster were to strike.
[17] Timothy Slater and Tanya Hall identified General Electric (GE), Unilever, Procter and Gamble, 3M and a private company, Cascade Engineering, as examples of businesses using TBL.
The following are the reasons why: In short, the criticisms can be summarised as: In response to these limitations, the concept of the "Triple Depreciation Line" (also called "CARE - Comprehensive Accounting in Respect of Ecology - model") has been proposed [25][26] A focus on people, planet and profit has led to legislation changes around the world, often through social enterprise or social investment or through the introduction of a new legal form, the Community Interest Company.
