Name: Bồ Tường Linh

Student ID: 31201026721

Students answer the following question with no more than 1000 words.

1. What is the triple bottom line? Give an example of a company that used this strategy?
Triple bottom line: a business strategy that includes social, economic, and environmental
criteria. The triple bottom line theory posits that instead of one bottom line, there should be
three: profit, people, and the planet. The triple bottom line seeks to gauge a corporation's
level of commitment to corporate social responsibility and its impact on the environment over
time. To put it simply, TBL is about doing business in a way that not only becomes
financially profitable but also improves people's lives and the environment at the same time.
According to the Triple bottom line theory, companies should be working simultaneously on
these three bottom lines:
- Profit: This is the traditional measure of corporate profit—the profit and loss (P&L)
account.
- People: This measures how socially responsible an organization has been throughout
its history.
- Planet: This measures how environmentally responsible a firm has been.

An example of a company that used this strategy:

IKEA
IKEA, a renowned Swedish furniture company, has also started to use the Triple
Bottom Line. The company published its goals for 2030 focusing on three main areas under
what it called “planet and people positive” when where; healthy and sustainable living,
circular and climate positive, and fair and equal. This is an example of a business that can
make a big impact if it can reach its goals as it currently uses1% of the global production of
woods and cotton. IKEA has a clear and detailed “People and Planet Positive Strategy” to
address a rapidly transforming world around. In IKEA sustainability strategy, the company
mention issues like climate change, abrupt consumption environmental resources, human
rights and overall sustainability issues. Here are some ways in which are planning to make a
change in each area of TBL:
- Planet
1
 An organization's production and manufacturing are heavily reliant on the usage of
natural resources and raw materials. As a result, environmental sustainability is something
that requires ongoing attention in order to safeguard the earth and wildlife. According to
IKEA's "People and Planet Positive Strategy," they are working hard to get products from
ecologically friendly or recycled sources.
In 2016 Ikea started to recycle waste material using old materials to make new top-selling
products, the business to date has achieved 60% renewable materials and 10% recycled
materials.
The company pledged to use 100% renewable or recyclable materials by 2030, investing
in Morssinkhof Rymoplast, a plastic recycling plant in the Netherlands in 2017 to help them
reach this goal.
Invested in R&D in partnership with H&M to develop a new textile fiber based on
cellulose from wood that we call TreeToTextile. The aim is to complement or replace, both
cotton and oil-based fabrics like nylon or polyester.
Aim to extend the life of its goods and send zero waste to landfills by giving product life
extensions such as selling extra covers for their KLIPPAN couch to promote just buying new
covers instead of a new sofa through their buyback plan. It should be noted that Ikea's
business strategy is still focused on low-cost - high-volume sales, so it will be fascinating to
see how they respond to the problem of product life extension when the temptation to buy a
new low-cost item rather than fix an old one is still so strong.
100% commitment to sustainable cotton, and the firm states that all cotton used for IKEA
goods originates from more sustainable sources as of September 1, 2015.
- People
People are a company's most valuable asset. People include both personnel and human
capital, as well as the community in which the organization operates. "People and Planet
Positive Approach" reflect their intrinsic IKEA sustainability strategy. Despite the fact that
IKEA's "People and Planet Positive Strategy" is frequently criticized by experts, it is obvious
that this strategy has been a driver of creativity and transformation for IKEA. IKEA focuses
on taking the lead in creating a better living for the communities and individuals that are
directly touched by their company (Hajmohammad and Vachon, 2016). It is in the best
interests of the corporation to promote human rights and safeguard children.
Aim to inspire 1 billion people to live healthier sustainable lives within the boundaries of
the planet, which they aim to do via the product range they offer. Ensuring international labor

2
standards are met for all its workers through its supply chain both direct and indirect,
implementing IWAY standard 6 in September 2020.

- Profit
Profit is definitely the fundamental goal of every organization. However, the extent to
which organizational operations would preserve the financial system's balance is solely
dependent on the organization's accountability and sustainability elements. Profit, according
to the Triple Bottom Line, is largely dependent on the other two variables, namely People and
Planet.
Ikea’s annual revenue was 36.9 billion Euros in 2020, while revenue has previously been
the top priority for Ikea shifts in its investments and use of the company profits is starting to
show its commitment to the other two bottom lines in People and Planet, such as its
reinvested those profits into waste materials recycling in 2016, increased investment in R&D
to find more sustainable materials and its investment into renewable energy and transitioning
its fleet to 100% electric.

References:
Collings, T. (2021, June 20). What is Triple Bottom Line, and which companies are using it
today? — The Green MBA. The Green MBA. Retrieved August 16, 2022, from
https://www.greenbusinessmba.com/blog/what-is-the-triple-bottom-line
The Influence Of Triple Bottom Line On Ikea Sustainability Strategy. (n.d.). Total
Assignment Help. Retrieved August 16, 2022, from
https://www.totalassignmenthelp.com/free-sample/triple-bottom-line-on-ikea-sustainability-
strategy