Being Green
Triple Bottom Line
United States companies are increasingly interested in the concept of the triple bottom line (TBL). They understand 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
The concept of TBL 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, including its workers, surrounding communities, and beyond.
Triple bottom line means a consideration of:
- 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, so the costs of pollution, worker displacement, and other factors are included in profit calculations.
- Vibrant communities (People): A corporation 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): 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.