Our “New Normal” and the Triple Bottom Line Perspective
When companies value people, prosperity, and the planet, over profit alone—we all win.
This month we watched hotels, restaurants, and other non-essential businesses close their doors and lay off staff. Business owners must now analyze how the global pandemic disrupted "business as usual" to create space for systematic change in the operation of companies. When the economy resumes, businesses have a unique opportunity to evaluate processes and pivot to a triple bottom line approach. Because when companies value people, prosperity, and the planet, over profit alone, we all win.
After working as the Marketing Director for the only bank in the Southeastern United States that operated with a triple bottom line, I can attest that companies that are purpose-driven gain more trust and lasting brand supporters in their industry than any other.
The triple bottom line (TBL) was coined in 1994 by John Elkington and is a framework or theory that recommends that companies commit to focusing on social and environmental concerns just as they do on profits. The idea was that a company could manage in a way that not only earns financial gains but also improves people's lives and the planet.
If a company focuses on finances only and does not examine how it interacts socially, it cannot see the whole picture, and thus cannot account for the full cost of doing business. A holistic approach is essential to running a business when your goal is to increase your consumer base and profit.
Pioneering companies work in tandem in three areas:
When companies focus on these three interdependent elements--prosperity, people, and the planet, triple-bottom-line reporting can be an essential tool to support a firm's sustainability goals.
When you share how potential investors view CSR, your board of directors and shareholders will likely react favorably to the triple bottom line principle. In an article in Corporate Board Member, they report that "there is a growing number of socially conscious investors who see positive environmental, social, and governance issues as critical for investing and meeting financial performance goals. Today's investors are not only avoiding investing in industries that do not align with their values (fossil fuels) but are also using their influence to push for positive corporate change with a broader scope of social impact."
The University of Scranton recommends evaluating your business's initial triple bottom line with the following measures:
- Average incomes
- Local Supply Chain
- Revenue by sector
- Greenhouse gas emissions
- Amount of waste generated
- Use of post-consumer, recycled material
- Water and electricity consumption
- Fossil fuel consumption
- Waste management
- Company-wide community volunteer hours
- Employee healthcare
- Diversity & inclusion
- Job growth rate
There are two globally accepted standards for the measurement that encapsulate the three categories: the B Impact Assessment (BIA) and the Sustainable Development Goal Action Manager (SDG AM). B Lab creates both assessments; both share fifty percent of the same questions and aggregate the answers into each other. Both of these assessments are credible, but I'm more familiar with the BIA, so that's what I'll touch on.
"I think one of the greatest hurdles is knowing where to start. There are so many ways a company can make an impact and so little direction on how to measure and manage social and environmental performance. However, with bimpactassessment.net, we hope to encourage all businesses to measure what matters using the free and confidential B Impact Assessment."
The BIA, created in 2006, became a DIY tool for measuring company impact in five categories: workers, governance, community, environment, and suppliers. Today, over 70,000 companies use this tool to benchmark and track performance. Businesses that have already adopted the triple bottom line and are ready to take things to the next level may want to consider becoming a Certified B Corporation.
You answer a series of questions to evaluate your company and learn ways you can improve. It will also reveal how your company stacks up against the competition. You can take your score in each of the five categories and compare them to other Certified B Corporations, like Patagonia or Ben & Jerry's.
To qualify for a B Corporation certification, your organization needs to score at least 80 out of 200 points on the B Impact Assessment. The information is self-reported, but each year, B Lab randomly selects 10% of its certified companies for onsite reviews. Over 3,285 companies in 150 industries and 71 countries have achieved certification as a B Corporation.
Companies making decisions to benefit their shareholders, their employees, customers, suppliers, and the community more broadly will maximize both stakeholder and shareholder value long term. This is the triple bottom line, and this is what consumers are expecting from companies in our "new normal."
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