Triple bottom line approach

In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. Examples of stakeholders include employees, customers, suppliers, local residents, government agencies, and creditors. According to the stakeholder theorythe business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder owner profit.

Triple bottom line approach

In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. Examples of stakeholders include employees, customers, suppliers, local residents, government agencies, and creditors. According to the stakeholder theorythe business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder owner profit.

A growing number of financial institutions incorporate a triple bottom line approach in their work. It is at the core of the business of banks in the Global Alliance for Banking on Valuesfor example. The Detroit -based Avalon International Breads interprets the triple bottom line as consisting of "Earth", "Community", and "Employees".

Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. April Learn how and when to remove this template message The triple bottom line consists of social equity, economic, and environmental factors.

The phrase, "people, planet, and profit" to describe the triple bottom line and the goal of sustainabilitywas coined by John Elkington in while at Sustain Ability, [10] and was later used as the title of the Anglo-Dutch oil company Shell's first sustainability report in As a result, one country in which the 3P concept took deep root was The Netherlands.

People, the social equity bottom line[ edit ] The people, social equity, or human capital bottom line pertains to fair and beneficial business practices toward labour and the community and region in which a corporation conducts its business.

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 "upstreaming" 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.

In concrete terms, a TBL business would not use child labour and monitor all contracted companies for child labour exploitation, would pay fair salaries to its workers, would maintain a safe work environment and tolerable working hours, and would not otherwise exploit a community or its labour force.

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. Quantifying this bottom line is relatively new, problematic and often subjective. Planet, the environmental bottom line[ edit ] The planet, environmental bottom line, or natural capital bottom line refers to sustainable environmental practices.

The Triple Bottom Line - The TBL 3Ps from ashio-midori.com

A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and minimize environmental impact. A TBL endeavour reduces its ecological footprint by, among other things, carefully managing its consumption of energy and non-renewables and reducing manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and legal manner.

Currently, the cost of disposing of non-degradable or toxic products is borne financially by governments and environmentally by the residents near the disposal site and elsewhere.

In TBL thinking, an enterprise which produces and markets a product which will create a waste problem should not be given a free ride by society. It would be more equitable for the business which manufactures and sells a problematic product to bear part of the cost of its ultimate disposal.

Ecologically destructive practices, such as overfishing or other endangering depletions of resources are avoided by TBL companies. Often environmental sustainability is the more profitable course for a business in the long run.

Arguments that it costs more to be environmentally sound are often specious when the course of the business is analyzed over a period of time.

Generally, sustainability reporting metrics are better quantified and standardized for environmental issues than for social ones. The ecological bottom line is akin to the concept of eco-capitalism. It therefore differs from traditional accounting definitions of profit.

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. It is the real economic impact the organization has on its economic environment.

BREAKING DOWN 'Triple Bottom Line (TBL)'

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. Therefore, an original TBL approach cannot be interpreted as simply traditional corporate accounting profit plus social and environmental impacts unless the "profits" of other entities are included as a social benefit.The triple bottom line theory expands the traditional accounting framework to include two other performance areas: the social and environmental impacts of their company.

These three bottom lines are often referred to as the three P’s: people, planet, and profit. And one approach to building a company like this, and monitoring what it does, is to use "the triple bottom line." What Is the Triple Bottom Line? The triple bottom line was first fully explained by John Elkington in his book, "Cannibals With Forks: The Triple Bottom Line of 21st Century Business.".

Triple Bottom Line Understanding People, Planet & Profit for Responsible Business. The Triple Bottom Line – the core of what we cover here at TriplePundit considers the social, environmental and. The benefits of a triple bottom line approach are many.

Some adherents can even be found in the financial sector. "I'm a firm believer in the long-term superiority of looking well beyond quarterly profitability," said Gary Duell, founder of Duell Wealth Preservation, a financial planning firm based in Happy Valley, Ore. The phrase “the triple bottom line” was first coined in by John Elkington, the founder of a British consultancy called SustainAbility.

His argument was that companies should be . Sep 14,  · The triple bottom line (also known as 3BL, the three Ps and the three pillars) puts into concrete terms what we already know: there’s more to business than just making money. You could even say.

Triple bottom line approach
The Triple Bottom Line: People, Planet, Profit