Week 5

TRIPLE BOTTOM LINE (NON-

PERFORMANCE MEASURE OF
SUCCESS)
OR
3P’S (PROFIT, PEOPLE AND PLANET)
 WEEK 5
TRIPLE BOTTOM LINE (NON- PERFORMANCE MEASURE OF SUCCESS)
OR
3P’S (PROFIT, PEOPLE AND PLANET)
Introduction
• Introduction of Triple Bottom Line as a measure of success for a Company
• Meaning of Triple Bottom Line
• 3P’s (Profit, People, Planet) or Triple Bottom Line
• Users of the Triple Bottom line
• Business
• Non-Profit Organizations
• Governments
• Triple Bottom line in Practice
• Examples – Triple Bottom Line in Practice
Introduction of Triple Bottom Line
• In 1994 John Elkington built upon the concept of the Triple Bottom Line
in hopes to transform the current financial accounting focused business
system to take on a more comprehensive approach to measuring a
business success.

• It’s a bottom line that continues to measure profit, but also measures
the companies impact on people and on the planet.

• The triple bottom line is a way of expressing a company’s impact and

sustainability on both local and a global scale.
Meaning – Triple Bottom Line
• The concept behind the triple bottom line is that companies are
responsible first and foremost to all their stakeholders,

• These include everyone that is involved with the company whether

directly or indirectly, as well as the planet we’re living on.

• This approach sees shareholders as part of the stakeholder group, but

only as part of it.
Meaning – Triple Bottom Line
• Historically, businesses operated solely to their financial bottom line.

• Historically, many stakeholders would use the business financial

bottom line to measure the business success.

• Today, business and stakeholders know success is not just reflected in

the business profit and loss statement.
Meaning – Triple Bottom Line
• To get an accurate measure of a business success, a well-rounded
perspective of a business operations and relationships with the
environment, community and economy is required.

• Triple Bottom Line is beyond the traditional measures of profits,

return on capital, and shareholders value and includes ‘Environmental
and Social dimensions.
Meaning – Triple Bottom Line
• In a nutshell, the Triple Bottom Line captures the essence of
sustainability by measuring the impact of a company's activities on the
world: including both its profitability and shareholder value which is its
Financial/Economic measure and its Social and Environmental capital.

• It incorporates three (triple) dimensions of performance (bottom line):

Social, Environmental and Financial/Economic.

• Now they have been given similar terms to make the dimensions even
more clear:
3P’s (People, Planet, Profit) or Triple Bottom
Line
• Financial/Economic with Profit
• Social with People
• Environmental with Planet

• Hence the Triple Bottom Line model

to measure the success of a company
is also called as the 3P’s model
• Profit
• People
• Planet
Profit
• Profit is the financial/economic value created by the organization after
deducting the cost of all input, including the cost of capital tied up.

• It therefore differs from traditional accounting definition 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.
People
• People (human capital) pertains to fair and beneficial business
practices toward labour and the community and region in which a
corporation conducts its business.

• A Triple Bottom Line conceives a reciprocal social structure in which

the well-being of corporate, labour and other stakeholder interests
are interdependent.
Planet
• Planet (Natural Capital) refers to sustainable environmental practices.

• A Triple Bottom Line company endeavors to benefit the natural order as

much as possible or at the least do no harm and curtail environmental
impact.

• A TBL endeavor reduces its ecological footprint by, among other things,
carefully managing its consumption of energy and non-renewable and
reducing manufacturing waste as well as rending waste less toxic before
disposing of it in a safe and legal manner.
Who uses the Triple Bottom Line
• Businesses

• Non-Profit Organizations

• Governments
Businesses
• Businesses use the TBL, example of business that use the TBL are:
• General Electric
• Unilever,
• Proctor and Gamble
• 3M; and
• Cascade Engineering
Businesses
• For Example: Cascade Engineer has shared its TBL Card which is as
follows:

• Economic
• Amount of taxes paid
• Social
• Average hours of training/employee
• From welfare to career retention
• Charitable contribution
Businesses
• Environmental/Safety
• Safety incident rate
• Lost/restricted workday rate
• Sales dollars per kilowatt hours
• Greenhouse gas emissions
• Use of post-consumer and industrial recycled material
• Water consumption
• Amount of waste to landfill
Non-Profit Organizations
• Many non-profit organizations have adopted the TBL and some have
partnered with private firms to address broad sustainability issues
that affect mutual stakeholders

• Companies recognize that aligning with non-profit organizations

makes good business sense, particularly those non-profits with goals
of economic prosperity, social well-being and environmental
protection.
Governments
• State, regional and local governments are increasing adopting the TBL
and analogous sustainability assessment frameworks as decision-
making and performance-monitoring tools.
Triple Bottom Line in Practice
• If you decide to measure the success of an organization.

• Start out by researching what the organization is doing to make

positive change in the way they do business.

• Look at steps they have taken that will save your business time
brainstorming on ways to improve your own business.
Examples - Triple Bottom Line in Practice
• An international shipment and packaging company has taken drastic
steps to reduce its ecological footprint and currently has about 30% of
its stores using renewable energy.

• An ice cream business has set a goal to reduce its carbon dioxide
emissions by 10% over the next few years. It has also started
investigating more environmentally friendly ways to package its ice
cream, and plans to cut waste by at least 1,000 tons.
Examples - Triple Bottom Line in Practice
• A coffee company only buys its beans from farmers who grow coffee
in an environmentally friendly manner, and it takes pains to ensure
that all its workers are treated fairly and receive a living wage for their
skills.

• A computer company focuses a lot of its community efforts towards

training and education programs. It helps underprivileged kids by
giving them access to technology and has goals to recycle 60% of its
annual waste.