Walking the (Triple Bottom) Line

When I first heard the term “Triple Bottom Line” I said something like “uh-oh… another way for managers to claim a bonus without making their numbers.” Happily, I was wrong.

Sustainability guru John Elkington’s concept of a Triple Bottom Line provides the most used framework for discussing Sustainability. Elkington proposed that businesses should measure and report Return on Assets Deployed information for natural (ecological) assets deployed and for social assets deployed, as well as the usual financial assets (capital) deployed figures. The three “bottom lines” represent the business’s net effects on planet, people and profit. This is obviously a more comprehensive view. Perhaps more significant is the implication that the business should show positive results which indicate enhancement to the environment and society, beyond doing no harm.

Andrew Savitz and Karl Weber’s book, The Triple Bottom Line extends Elkington’s idea by representing the three “bottom lines” as intersecting circles. The areas of intersection are termed “sweet spots”, meaning synergetic opportunities. For example, when power efficiency is improved, profits are improved due to lower power cost, while the environment benefits through reduced carbon dioxide emissions. So, improvements in the planet and people “bottom lines” are not necessarily at the expense of the profit “bottom line”.

Triple Bottom Line

Let’s look at this using a zoom lens, like a camera.

First, zoom out to the wide screen macro view. Consider the entire planet, all of humanity, and the entirety of world industry, where “industry” includes manufacturing, mining, agriculture, forestry and any other activity the produces commercial “stuff” (goods, not services). Humanity currently consists of about 6.8 billion of us, expected to grow to 9.5 or 10 billion by 2050. Many are very poor. Almost all want to become richer and consume more, which is happening. So, the total demand for commercial “stuff” continues to increase.

However, the earth isn’t getting any bigger. The sum total of natural resources isn’t growing either. Nor is the space available for waste disposal. The natural world is under duress, and increasing demand for “stuff” is going to increase that pressure. So, the ecological “bottom line” improves when environmental impact decreases, while the social “bottom line” improves when the welfare of humanity improves.

It is for industry to resolve these two: to create value, in the form of the “stuff” that rising prosperity demands, while also enhancing the natural environment upon which humanity relies. And, in doing so, to earn sufficient profits to keep the improvement process going. That’s the big picture view of what Sustainable Development is all about.

Now, let’s zoom all the way in, to a micro view. Consider a smaller manufacturing firm striving to survive and prosper in a global economy. To improve all three “bottom lines” while also enjoying the benefits of doing so requires a well thought out plan of systematic actions, sustained over time. The Getting Started tab in the www.JeraSustainableDevelopment.com website provides the information you need to get going.

Jera Logo white with caption centeredThoughtful comments are always appreciated.

… Chuck Harrington

Image Credit: Cleveland Museum of Natural History, Creative Commons