The role of triple bottom line (TBL) in the sustainability agenda

The world has evolved with a focus placed on how people must do business in a more socially and environmentally conscious manner. In time past, companies were more interested in financial performance for the interest of their shareholders, employees, customers, suppliers, neighbours, communities etc.

This new trend of awareness can partly be attributed to environmental issues like climate change, which has become more pressing. Due to this, many businesses are finding ways to build a more sustainable future. This ranges from sourcing raw materials, means of production, packaging, waste management and recycling.

The triple bottom line (TBL) is a concept credited to address the gap as identified based on social and environmental awareness and advocacy. The TBL is a type of sustainability framework that assesses business performance based not only on economic impact but also on societal and environmental impact. The TBL was built on 3 pillars namely; profits, people, and planet. They are usually referred to as the three P’s.

The reporting framework for triple bottom line now includes ecological and social aspects and their impact on people and the environment. In the quest to achieve success, businesses should not focus only on profits maximization but also on broader impact like how their business operations affect the world.

Profit: This is the “P” most commonly associated with business success. Conventionally, it refers to a business’s financial success. However, in the context of TBL, profit refers to the economic aspect of sustainability. Ideally, a business will achieve financial success while still adhering to socially ethical and environmentally responsible business practices. At the same time, profits need to be sustained to ensure long-term growth and financial viability.

People: People as referred in this scenario addresses social/societal impact of sustainability. This means giving attention to how business practices impact stakeholders like employees and customers, as well as communities as a whole. As a matter of relevance, a business must promote social well-being, address social issues, and improve equity at all levels.

Planet: Planet refers to environmental sustainability. A business is expected to minimize any negative impact of its activities. For example, by sourcing raw materials locally, businesses can reduce their carbon footprint (whereas if they source goods from afar, there are carbon emissions associated with airplane and truck delivery). Other ecological-friendly practices could include using renewable energy or conserving resources, recycling, waste management etc.

Sustainability is a globally accepted phenomenon and very critical for long-term business success and growth. The TBL approach encourages businesses to take a bigger view of how their strategic decisions impact society and the environment, which also translates to an impact on profits.

Creating a healthy environment is important for the sustainability of every business. Businesses need to create positive impacts that will guarantee the overall social well-being of the people within the communities they have footprints. Businesses should ensure that certain quota of jobs are allocated to the people within the communities they operate.

Consumers are very conscious of the impact of the activities on their lives and nature. They are therefore particularly interested in businesses with realistic and positive sustainability strategies. Customers are now expressing loyalty and attachment to businesses that projects their interest and environment.

TBL has enormous benefits and notable amongst them are; boosting customer loyalty, improving employee recruitment and reducing turnover, enhancing employee morale, reducing risk amongst other.

Nevertheless, TBL has its setbacks which poses as a challenge for easy adoption and implementation on the TBL framework. Issues of lack of standardized metrics and cost associated with implementation is a hindrance to the TBL agenda. Again, businesses have not adopted to its acceptance and use making it difficult to determine a much broader measuring mechanism.

It is important that both employees and management are motivated by more than just profit but the impact their business operations have on the environment and the people. To ensure a successful implementation, TBL must be an integral part of the corporate culture of any business entity. Everyone must be interested in ensuring that we impact the world in a more positive manner especially for future generations.

Source: Bright Ampadu Okyere (An SDG Advocate), https://www.imd.org/blog/sustainability/triple-bottom-line/, https://www.business.com/articles/triple-bottom-line-defined/, SDG Alliance Email: [email protected], [email protected], Twitter: @ghanasdg, Facebook: SDG Alliance-Ghana Tel. # 0244204664

 

 

 

 

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