How the Triple Bottom Line is Redefining Local Businesses
How do businesses measure success beyond profit? More companies are adopting the Triple Bottom Line approach, but what exactly does the term mean?
The term Triple Bottom Line was introduced by John Elkington in 1994. In the past 20+ years, it’s now a significant consideration deciding the futures of modern businesses and carving out their corporate social responsibilities.
What Is Triple Bottom Line?
In the past, the sole focus of the businesses was to make a profit. Triple Bottom Line introduces two new dimensions to how companies operate, i.e., people and planet.
With the financial bottom line being the only area of focus, businesses did not pay much attention to people and planet. What if their efforts to increase profits cause damage to the environment? How does this impact workers’ health, hours and productivity?
With Triple bottom line principles, a business has to hold itself accountable not only for its economic impact but social and environmental as well. A company will not invest in a project where the only gain of the project is financial but at the expense of people or planet, or both. It also communicates to shareholders and a business owner to look at the analytics that gauges the company’s performance based on overall impact.
How Do businesses incorporate a Triple Bottom Line?
With technological advancement, businesses are now doing their best to consider all three factors for success across industries.
Take fashion, for example. A clothing company provides best working conditions and high salaries to its stitching workers in an attempt to do what’s best for “people.” However, it will raise its operational costs and shrink its profits, but with modern machines saving thousands of dollars through energy efficiency, they can still maintain profits – and a triple bottom line.
A packaging company gives perfect working conditions and compensations to its workers, makes a profit every month but the material it uses for packaging is not recyclable. Once they incorporate these principles, they switched to biodegradable materials.
Small businesses should take examples from the large companies that have already started to operate successfully with a sustainable approach.
Examples of Businesses Pursuing Triple Bottom Line
Businesses can become B Corp certified as a way to formally declare triple bottom line principals to their customers, investors, partners, and workers. Becoming a B Corp is somewhat straightforward – companies have to take a performance assessment, meet a legal requirement and then make it official. However, the B Corp certification takes time and has many components of the evaluation. Currently, there are over 2100 certified B Corps in 50+ countries.
Outdoor clothing company Patagonia is a B-Corporation, which means it pledges to its customers to be a triple bottom line business. Patagonia was the first California company to sign up for B certification in January 2012.
Since B Lab is headquartered in Wayne PA, so naturally many local companies have gotten on board to become B Corp certified. Solar States, Yikes, PWP Video, Re:Vision Architecture, Azavea and Mio are just a few examples.
One of our favs, United By Blue, is another excellent example of a business that operates with the value of people and planet as a core to its vision. For every item sold, they pledge to remove one pound of plastic from oceans and waterways, cleaning the earth in the process.
Sustainable Business Network
One place to find local businesses that embrace the triple bottom line principals is the Sustainable Business Network (SBN). Although there are no requirements to screen businesses for these practices, SBN provides events, training, and opportunities to help this community flourish for a just, green and thriving economy.
Best for PHL: B Corp Light
Another program driven by ImpactPHL is getting local companies on board with triple bottom line principals. Best for PHL allows businesses to take an impact assessment and pledge to change one thing about their business. Over 150 local companies have taken this initiative.
With these companies switching to a Triple Bottom Line state of mind, they’ll adapt to the new and better idea of operating and the world will benefit as a whole. Financial growth remains vital for any company, but the environmental and social impacts aren’t too far behind.
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