Triple Bottom Line: Explained

Addressing challenges such as climate change, inequality, and poverty requires urgent and sustainable solutions. Business leaders are recognizing that sustainable practices go beyond mere goodwill gestures; they serve as a strategic advantage that addresses critical issues and propels business growth.

One of the ways to understand a corporation’s sustainability efforts is using a concept known as the Triple Bottom Line.

What is TBL (triple bottom line)? And how did it come into the picture?

In 1994, an authority on corporate responsibility and sustainable development John Elkington coined the term "triple bottom line" as a way to move beyond the traditional focus on profit as the only measure of success. He argued companies should also track their social and environmental impact.?

In finance, when speaking of a company's bottom line, we usually mean “profits”.?

Think of TBL as a three-legged stool: People, Planet, and Profit. Instead of solely focusing on profit, TBL companies set goals in all three areas. They strive for social fairness, environmental responsibility, and financial success.

Let’s dive a bit deeper to understand these 3 P’s?

Planet: To make a positive impact on the planet?

• Businesses have historically harmed the planet, but many now realise their responsibility to be part of the solution. Not just large corporations, but all businesses can help by reducing their environmental impact.?

• Simple steps like using eco-friendly materials, saving energy, and optimising shipping make a difference in the long run.

Profit: Not the only metric to value success!

• While financial success is important in a capitalist economy, TBL emphasises looking beyond profit alone. TBL encourages strategic planning initiatives that promote positive change without compromising financial performance.?
• In many cases, adopting sustainability initiatives has proven to drive business success.

People: ?To have a positive societal impact

Traditionally businesses have heavily focused only on profits for shareholders, but now they're realising they can do more. Today, many companies want to create positive change for everyone they touch, like customers, employees, and even the community.?

Some easy ways companies can make a real difference for people that the concept of TBL encourages can include:

• Treating everyone fairly: Hiring everyone based on skills, not background, and encouraging volunteering opportunities for employees.
• Making sure employees receive a fair wage?
• Looking outward: Partnering with nonprofits, and small businesses to support them and on shared goals to create bigger change.

Why does TBL matter?

Companies today face pressure to consider more than just profit. Consumers expect transparency and responsibility towards society and the environment. This is where the Triple Bottom Line (TBL) comes in.

Why does this matter to you?

• As a consumer: TBL means clearer choices. You can support companies that align with your values, knowing they treat workers fairly and respect the environment. Higher-quality products and long-term sustainability often come hand-in-hand.
• As an investor: TBL companies invest in the future. Studies show they often perform better in the long run, attracting loyal customers and investors who appreciate their holistic approach.

Ultimately, TBL is about creating a win-win. Companies do good while being profitable, and everyone benefits in the long run.

For example, all projects by Pyse offer the investors a rationale for why you should invest in that project. This rationale is backed by facts that highlight exactly how your investment is creating a visible impact and why your money helps create a sustainable society. So the next time someone tells you that they are working towards being sustainable, ask them how their actions are really promoting and affecting the triple bottom line.