People, Planet, Profit: The Triple Bottom Line Approach (Opinion)

Each and every day, it is the sole duty of a community bank president to keep an eye on the numbers. Any retailer, small-business owner, nonprofit executive, consultant or supplier worth his salt is doing the same thing: watching the bottom line and keeping the profit and loss statement in the black.

So, it can prove daunting to consider a triple bottom line approach: a business strategy focused on people, planet and profit.

The phrase was coined in 1994 by John Elkington, a British consultant. The concept began to spread exponentially around 1999, and became commonplace among corporate social responsibility proponents and sustainability advocates. In 2007, the United Nations ratified the triple bottom line approach for full cost accounting as a true measure of social, ecological and economic success. In 2009, Wal-Mart Stores Inc. introduced aggressive sustainability goals, including a product index and achieving zero waste.

Suddenly, it wasn’t just the innovators and the envelope-pushers discussing it, and the idea of a triple bottom line began to permeate email subject lines and internal memos in more traditional companies.

Customers are becoming more savvy and far more demanding of businesses and service providers. Whether a consumer’s desire is motivated by a true concern for the future of the planet or the need to keep up with trends, sustainable business practices can no longer be reserved for tree-hugging outliers.

The Economist called triple bottom line, in essence, the ultimate balanced scorecard, referring to Robert Kaplan’s edicts that “what you measure is what you get” and the idea that a company must consider the customer’s perspective and its own internal perspective, and place innovation and improvement as a central focus.

Elkington wrote: “In the simplest terms, the TBL agenda focuses corporations not just on the economic value that they add, but also on the environmental and social value that they add — or destroy.”

This seems like a concept we can all get on board with and pursue enthusiastically. But then there is that incessant (and necessary) guarding of the bottom line. What the successful organization needs is a plan, following that premise. Unless you measure it, you cannot improve it.

From the environmental standpoint, there are systems in place. Buildings have LEED (Leadership in Energy and Environmental Design) certification and appliances have Energy Star. For businesses, there are self-guided initiatives such as the Green Plus certification from the Institute for Sustainable Development in North Carolina, or the GreeNWAy initiative of the Fayetteville Chamber of Commerce.

For individuals, excellent programs such as Practically Green deliver a roadmap for sustainable progress, and for nonprofits, the NWA Emerging Leaders program’s Sustainability Workgroup offers a plan for event waste reduction among other innovative initiatives in the works.

In fact, there are literally dozens of effective and attainable resources available, whether a business prefers to follow a proven path with a formula that guarantees results or develop its own strategy based on executive leadership and buy-in coupled with the input of team members.

As for the social portion of the triple bottom line approach, a company’s human capital is its most valuable resource. Without investment in the well-being of the people, there can be no bottom line ecological or economic success.

At a time when many businesses are working just to keep their doors open, words like sustainability, green, planet and social may seem like distractions worthy only of playing second fiddle to one key word — profit. Do a little more homework, or find a passionate team member to lead a triple bottom line initiative for your organization.

You can be certain that Walmart, HP, Nike, Procter & Gamble and Starbucks aren’t pursuing sustainability and triple bottom line initiatives because they are trendy or for the warm fuzzies. A well-rounded approach that considers people and planet alongside profit makes sense and cents.

Bethany Stephens has worked in tourism, economic development and the nonprofit sector, and currently serves as a consultant for two small firms. She can be reached at [email protected].