Understanding Sustainability and the Triple Bottom Line

It’s no secret our world and business environments are always changing. More than ever, sustainability is key to giving you a competitive edge in today’s economy—financially, environmentally, and socially.

For this reason, the University of Wisconsin Sustainable Management programs are thoughtfully designed with input from twenty-first-century businesses across the United States. Curriculum is hands-on. Real-world problems are faced head-on. And you learn to develop triple bottom line businesses that balance profitability with the needs of the environment and the wider communities in which we live.

What is sustainability?

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

—World Commission on the Environment and Development

True sustainability requires finding balance among four main objectives:

  • Social progress that takes into account the needs of everyone
  • Protection of the natural environment
  • Careful and considered use of natural resources
  • Steady and increasing levels of economic growth and employment

Already, businesses in Wisconsin and the United States must pay attention to their use of natural resources and the way in which they impact human welfare. Concerns may include escalating energy costs, fresh water supplies, global climate change, or all of the above as they factor into the triple bottom line.

Triple Bottom Line

Key to sustainability, the concept of the triple bottom line means that business success is no longer defined only by monetary gain but also by the impact an organization’s activities have on society as a whole.

Movement toward corporate concern for the “triple bottom line”—financial, social, and environmental performance—requires radical change throughout the corporation. It is not “either/or.” The new paradigm is “and also.” A sustainable business excels on the traditional scorecard of return on financial assets and shareholder and customer value creation. It also embraces community and stakeholder success. It holds its natural and cultural environments to be as precious as its technological portfolio and its employees’ skills.

—Charles Holliday, Stephan Schmidheiny, and Philip Watts, Walking the Talk: The Business Case for Sustainable Development

Triple bottom line demands that a company’s responsibility be to stakeholders rather than shareholders. Stakeholders include anyone who might be affected by a company’s or industry’s practices, from workers to surrounding communities and beyond. It involves consideration of:

  • Vibrant communities (People): An organization has a responsibility to its employees and to the wider communities in which it works. A triple bottom line company understands how its practices affect the corporation, its workers, and wider stakeholders, and it works to promote all of their best interests.
  • A healthy environment (Planet): Without question, committing to sustainable environmental practices is good business. Corporations can save money and reduce their environmental footprints by reducing waste, conserving energy, and maintaining environmentally safe manufacturing processes.
  • Strong profitability (Profit): Clearly, making money is essential to business success. A triple bottom line company, however, recognizes that its own sustainability rests on its ability to work harmoniously in its social and environmental settings. For this reason, the costs of pollution, worker displacement, and other factors are included in profit calculations.

You can help lead the way. Learn more about UW Sustainable Management degrees and certificates.