25th anniversary of the “Triple Bottom Line” phrase
During my weekly reading, I frequently discover material which truly inspires, entertains or educates me. One of these “gold nuggets” was a recent HRB article by John Elkington: “25 years ago, I coined the phrase “Triple Bottom Line”. Here is why it is time to rethink it.”
Coming originally from a corporate background focused on “single bottom line” profit, I was quite proud when I was asked by my previous employer to help shape the company’s sustainability agenda c. 10 years ago.
After months of work, endless discussions in the team and numerous presentations to the Board we ended up with a sustainability framework that assessed the company’s social, environment, and economic impact. Great data for the annual report!
In our view, we had exactly met the goals of the “Triple Bottom Line” People-Planet-Profit framework and helped with our metrics the company to take into account the full costs involved in doing business.
Today, it was eye-opening for me to learn that John Elkington’s idea was much more radical when coining the Triple Bottom line (TBL) phrase 25 years ago, or as he puts it:
“The TBL wasn’t designed to be just an accounting tool. It was supposed to provoke deeper thinking about capitalism and its future, but many early adopters understood the concept as a balancing act, adopting a trade-off mentality.” Looking back John’s conclusion on the impact of TBL is quite eye watering:
“Together with its subsequent variants, the TBL concept has been captured and diluted by accountants and reporting consultants.”
And he continues…
“Fundamentally, we have a hard-wired cultural problem in business, finance and markets. Whereas CEOs, CFOs, and other corporate leaders move heaven and earth to ensure that they hit their profit targets, the same is very rarely true of their people and planet targets. Clearly, the Triple Bottom Line has failed to bury the single bottom line paradigm.”
Having visited last year’s COP23 exhibition in Bonn I realized how much the sustainability consulting sector has grown. Today, this market segment alone is a 1B dollar industry. So, with all this help and advice, did we move the needle on the UN Sustainability Development Goals?
Well - if we are honest to ourselves we have to accept that the results are mixed, at best! While there have been true success stories, we still consume on many accounts multiple times more than our planet can support, and by that we increasingly threatening our climate, water resources, oceans, forests, soils and biodiversity.
Should we therefore give up? Absolutely not - it’s time to step up!
And there is hope. Did you hear about the B Corps? B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. A vastly growing community of more than 2,500 small and big Certified B Corps from 50 countries and over 130 industries working together toward 1 unifying goal: to redefine success in business. True innovators!
Or as Steve Jobs put it: “Innovation distinguishes between a leader and a follower.”
(*) Harvard Business Review 06-2018. John Elkington - 25 years ago, I coined the phrase “Triple Bottom Line”. Here is why it is time to rethink it.