15 Jan People, Planet, Profit : Triple Bottom Line
Companies should always consider the three P’s of the Triple Bottom Line while attempting to lead a successful and sustainable business.
The 3P is an accounting framework which takes into consideration 3 key factors: People, Planet and Profit. It is through this framework that a business can attempt to be more socially responsible. Rather than just concerning themselves with money, a business looks at other forms of “capital” or output. Though most would agree that this is a revolutionary and intelligent way to look at business, many people have difficulty figuring out how to measure 2 of the 3 P’s. The money is easy to measure and, therefore, profits, are easy to define and discuss. However, it is not easy to find a unit that can also measure ecological health and human welfare.
Though it can be difficult to measure, the triple bottom line (TBL) is something that is widely accepted in business these days. Businesses set up an index and, within the TBL framework, create a bigger picture of their business’ effect on its employees, the environment and the economy. If you are a corporate business owner or a business leader, you may wonder if and how you can put this into practice. It may be best for you to hire a consultant to help with this or to use tools to get you started.
In the meantime, however, you can become more socially responsible in many simple ways. For the planet, you can work to reduce your carbon footprint and attempt to achieve carbon neutrality through carbon offsetting. Without help, you may not be totally successful, but even the smallest steps and tiniest attempts can make a difference. For people, you can evaluate community work hours, training and charitable contributions. Then, of course, there are profits which you (hopefully) have all figured out.
What is particularly interesting with a triple both line approach, is that studies reveal that there is a correlation between the performance in the 3P. A few years back, people thought from an intuition that firms who would have to “donate” to the community or “care” for the environment would suffer from more costs, therefore impacting their profit. The reality is that this is actually the exact opposite in most cases. Organizations are actually rewarded by the employees (better engagement, leading to better performance) and by the loyalty of their clients (most people really prefer to do business with evidently socially responsible companies). Also, certain things like identifying sources of carbon emissions often lead to cost analysis and optimizations, reducing costs.
So in conclusion, TPL-led firms do not only enjoy the satisfaction of delivering great value for people and great care for the planet (which in itself is such a great morale booster) but they also make more money. What else to ask for?