1. Triple bottom line
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The triple bottom line (abbreviated as TBL or 3BL, and also known as people, planet, profit or
the three pillars[1]) captures an expanded spectrum[further explanation needed] of values and
criteria for measuring organizational (and societal) success: economic, ecological, and social.
With the ratification of the United Nations and ICLEI TBL standard for urban and community
accounting in early 2007,[2] this became the dominant approach to public sector full cost
accounting. Similar UN standards apply to natural capital and human capital measurement to
assist in measurements required by TBL, e.g. the EcoBudget standard for reporting ecological
footprint.
In the private sector, a commitment to corporate social responsibility (CSR) implies a
commitment to some form of TBL reporting. This is distinct from the more limited changes
required to deal only with ecological issues.
Contents
1 Definition
2 Bottom lines
3 Supporting arguments
4 Criticism
5 Legislation
6 See also
7 Notes
8 Further reading
9 External links

2. Definition
For reporting their efforts companies may demonstrate their commitment to CSR through the
following:
Top-level involvement (CEO, Board of Directors)
Policy Investments
Programs
Staffing resources
Signatories to voluntary standards
Principles (UN Global Compact-Ceres Principles)
Reporting (Global Reporting Initiative)
Triple bottom line (TBL) accounting expands the traditional reporting framework to take into
account social and environmental performance in addition to financial performance. In 1981
Freer Spreckley first articulated the triple bottom line in a publication called 'Social Audit - A
Management Tool for Co-operative Working'.[3] In this work, he argued that enterprises should
measure and report on social, environmental and financial performance.
The phrase was coined by John Elkington in his 1997 book Cannibals with Forks: the Triple
Bottom Line of 21st Century Business.[4][5] Sustainability, itself, was first defined by the
Brundtland Commission of the United Nations in 1987.
1988 also marked the foundation of the Triple Bottom Line Investing group by Robert J.
Rubinstein, a group advocating and publicizing these principles.
The concept of TBL demands that a company's responsibility lies with stakeholders rather than
shareholders. In this case, "stakeholders" refers to anyone who is influenced, either directly or

3. indirectly, by the actions of the firm. According to the stakeholder theory, the business entity
should be used as a vehicle for coordinating stakeholder interests, instead of maximizing
shareholder (owner) profit.
Bottom lines
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The triple bottom line is made up of "social, economic and environmental" factors.
Graphic describing the bottom lines
"People, planet and profit" succinctly describes the triple bottom lines and the goal of
sustainability. The phrase, "people, planet, profit", was coined by John Elkington in 1995 while
at SustainAbility, and was later adopted as the title of the Anglo-Dutch oil company Shell's first
sustainability report in 1997. As a result, one country in which the 3P concept took deep root was
The Netherlands.
"People" pertains to fair and beneficial business practices toward labour and the community and
region in which a corporation conducts its business. A TBL company conceives a reciprocal
social structure in which the well-being of corporate, labour and other stakeholder interests are
interdependent.
A triple bottom line enterprise seeks to benefit many constituencies, not exploit or endanger any
group of them. The "upstreaming" of a portion of profit from the marketing of finished goods
back to the original producer of raw materials, for example, a farmer in fair trade agricultural
practice, is a common feature. In concrete terms, a TBL business would not use child labour and
monitor all contracted companies for child labour exploitation, would pay fair salaries to its
workers, would maintain a safe work environment and tolerable working hours, and would not
otherwise exploit a community or its labour force. A TBL business also typically seeks to "give
back" by contributing to the strength and growth of its community with such things as health
care and education. Quantifying this bottom line is relatively new, problematic and often
subjective. The Global Reporting Initiative (GRI) has developed guidelines to enable
corporations and NGOs alike to comparably report on the social impact of a business.

4. "Planet" (natural capital) refers to sustainable environmental practices. A TBL company
endeavors to benefit the natural order as much as possible or at the least do no harm and
minimise environmental impact. A TBL endeavour reduces its ecological footprint by, among
other things, carefully managing its consumption of energy and non-renewables and reducing
manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and
legal manner. "Cradle to grave" is uppermost in the thoughts of TBL manufacturing businesses,
which typically conduct a life cycle assessment of products to determine what the true
environmental cost is from the growth and harvesting of raw materials to manufacture to
distribution to eventual disposal by the end user. A triple bottom line company does not produce
harmful or destructive products such as weapons, toxic chemicals or batteries containing
dangerous heavy metals, for example.
Currently, the cost of disposing of non-degradable or toxic products is borne financially by
governments and environmentally by the residents near the disposal site and elsewhere. In TBL
thinking, an enterprise which produces and markets a product which will create a waste problem
should not be given a free ride by society. It would be more equitable for the business which
manufactures and sells a problematic product to bear part of the cost of its ultimate disposal.
Ecologically destructive practices, such as overfishing or other endangering depletions of
resources are avoided by TBL companies. Often environmental sustainability is the more
profitable course for a business in the long run. Arguments that it costs more to be
environmentally sound are often specious when the course of the business is analyzed over a
period of time. Generally, sustainability reporting metrics are better quantified and standardized
for environmental issues than for social ones. A number of respected reporting institutes and
registries exist including the Global Reporting Initiative, CERES, Institute 4 Sustainability and
others.
The eco bottom line is akin to the concept of Eco-capitalism.[6]
"Profit" is the economic value created by the organization after deducting the cost of all inputs,
including the cost of the capital tied up. It therefore differs from traditional accounting
definitions of profit. In the original concept, within a sustainability framework, the "profit"
aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real
economic impact the organization has on its economic environment. This is often confused to be
limited to the internal profit made by a company or organization (which nevertheless remains an

5. essential starting point for the computation). Therefore, an original TBL approach cannot be
interpreted as simply traditional corporate accounting profit plus social and environmental
impacts unless the "profits" of other entities are included as a social benefit.
Supporting arguments
This section needs additional citations for verification. (June 2009)
The following business-based arguments support the concept of TBL:
Reaching untapped market potential: TBL companies can find financially profitable niches
which were missed when money alone was the driving factor. Examples include:
Adding ecotourism or geotourism to an already rich tourism market such as the Dominican
Republic
Developing profitable methods to assist existing NGOs with their missions such as
fundraising, reaching clients, or creating networking opportunities with multiple NGOs
Providing products or services which benefit underserved populations and/or the environment
which are also financially profitable.
Adapting to new business sectors: Since many business opportunities are developing in the
realm of social entrepreneurialism,[7] businesses hoping to reach this expanding market must
design themselves to be financially profitable, socially beneficial and ecologically sustainable or
fail to compete with those companies who do design themselves as such. For example, Fair
Trade and Ethical Trade companies require ethical and sustainable practices from all of their
suppliers and service providers. A business which is planning to work with Fair Trade or Ethical
Trade companies must design their business model to be TBL.
Fiscal policy of governments usually claims to be concerned with identifying social and natural
deficits on a less formal basis. However, such choices may be guided more by ideology than by
economics. The primary benefit of embedding one approach to measurement of these deficits
would be first to direct monetary policy to reduce them, and eventually achieve a global
monetary reform by which they could be systematically and globally reduced in some uniform
way.

6. The argument is that the Earth's carrying capacity is itself at risk, and that in order to avoid
catastrophic breakdown of climate or ecosystem, there is a need for a comprehensive reform in
global financial institutions similar in scale to that undertaken at Bretton Woods in 1944.
Marilyn Waring has been a major proponent of this reform.
With the emergence of an externally consistent green economics and agreement on definitions of
potentially contentious terms such as full-cost accounting, natural capital and social capital, the
prospect of formal metrics for ecological and social loss or risk has grown less remote through
the 1990s.
In the United Kingdom in particular, the London Health Observatory has undertaken a formal
programme to address social deficits via a fuller understanding of what "social capital" is, how it
functions in a real community (that being the City of London), and how losses of it tend to
require both financial capital and significant political and social attention from volunteers and
professionals to help resolve. The data they rely on is extensive, building on decades of statistics
of the Greater London Council since World War II. Similar studies have been undertaken in
North America.
Studies of the value of Earth have tried to determine what might constitute an ecological or
natural life deficit. The Kyoto Protocol relies on some measures of this sort, and actually relies
on some value of life calculations that, among other things, are explicit about the ratio of the
price of a human life between developed and developing nations (about 15 to 1). While the
motive of this number was to simply assign responsibility for a cleanup, such stark honesty
opens not just an economic but political door to some kind of negotiation — presumably to
reduce that ratio in time to something seen as more equitable. As it is, people in developed
nations can be said to benefit 15 times more from ecological devastation than in developing
nations, in pure financial terms. According to the IPCC, they are thus obliged to pay 15 times
more per life to avoid a loss of each such life to climate change — the Kyoto Protocol seeks to
implement exactly this formula, and is therefore sometimes cited as a first step towards getting
nations to accept formal liability for damage inflicted on ecosystems shared globally.
Advocacy for triple bottom line reforms is common in Green Parties. Some of the measures
undertaken in the European Union towards the Euro currency integration standardize the

7. reporting of ecological and social losses in such a way as to seem to endorse in principle the
notion of unified accounts, or unit of account, for these deficits.
Criticism
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While many people agree with the importance of good social conditions and preservation of the
environment, there are also many who disagree with the triple bottom line as the way to enhance
these conditions. The main arguments against it are summarised below.
Reductive method: In the triple bottom line, a corporate-oriented approach, the social—that is,
the way in which humans live and relate to each other and the environment—is secondary. The
economic as a domain is given an independent status which is ideologically assumed rather than
analytically argued. In the most problematic versions, the economic is elevated to the master
category and defined in terms that assume the dominance of a singular, historically specific,
economic configuration—modern globalizing capitalism. Concurrently the environment comes
to be treated as an externality or background feature, an externality that tends not to have the
human dimension build into its definition. Thus, in many writings, even in those critical of the
triple-bottom-line approach, the social becomes a congeries of miscellaneous considerations left
other from the other two prime categories. Alternative approaches that treat the economic as a
social domain, alongside and in relation to the ecological, the political and the cultural are now
being considered as more appropriate for understanding institutions, cities and regions.[8]
Division of labour is characteristic of rich societies and a major contributor to their wealth.
This leads to the view that organisations contribute most to the welfare of society in all respects
when they focus on what they do best: the baker exchanges his loaves with the shoemaker rather
than making his own shoes - to the benefit of both and by extension the whole of society. In the
case of business the expertise is in satisfying the needs of society and generating a value added
surplus. Thus the triple bottom line is thought to be harmful by diverting business attention away
from its core competency. Just as charitable organizations like the Red Cross would not be
expected to attend to environmental issues or pay a cash dividend, and Greenpeace would not be
expected to make a profit or succor the homeless, business should not be expected to take on
concerns outside its core expertise, provided the business doesn't do obvious harm to people or
the planet.

8. Effectiveness: It is observed that concern for social and environmental matters is rare in poor
societies (a hungry person would rather eat the whale than photograph it). As a society becomes
richer its citizens develop an increasing desire for a clean environment and protected wildlife,
and both the willingness and financial ability to contribute to this and to a compassionate society.
Support for the concept of the triple bottom line itself is said to be an example of the choices
available to the citizens of a society made wealthy by businesses attending to business. Thus by
unencumbered attention to business alone, Adam Smith's Invisible Hand will ensure that
business contributes most effectively to the improvement of all areas of society, social and
environmental as well as economic.
Nationalism: Some countries adopt the view that they must look after their own citizens first.
This view is not confined to one sector of society, having support from elements of business,
labour unions, and politicians.
Libertarian: As it is possible for a socially responsible person to sincerely believe that the
triple bottom line is harmful to society, the libertarian view is that it would be arrogant to force
them to support a mechanism for the improvement of society that may, or may not, be the best
available. That is, those who would not force Greenpeace and the Salvation Army to generate a
profit should not force businesses to take responsibilities outside their area of expertise. At least
in areas where a business doesn't do obvious harm to people or the planet.
Inertia: The difficulty of achieving global agreement on simultaneous policy may render such
measures at best advisory, and thus unenforceable. For example, people may be unwilling to
undergo a depression or even sustained recession to replenish lost ecosystems.
Application: According to Fred Robins' The Challenge of TBL: A Responsibility to Whom?
one of the major weaknesses of the TBL framework is its ability to be applied in a monetary-
based economic system. Because there is no single way in monetary terms to measure the
benefits to the society and environment as there is with profit, it does not allow for businesses to
sum across all three bottom lines. In this regard, it makes it difficult for businesses to recognize
the benefits of using TBL for the company, itself.

9. Criticism from the Left: TBL is viewed as an attempt by otherwise exploitative corporations to
avoid legislation and taxation and generate a fictitious people-friendly & eco-friendly image for
PR purposes.
Legislation
Legislation permitting corporations to adopt a triple bottom line is under consideration in some
jurisdictions, including Minnesota and Oregon.[9]
Some businesses have voluntarily adopted a triple bottom line as part of their articles of
incorporation or bylaws, and some have advocated for state laws creating a "Sustainable
Corporation" that would grant triple bottom line businesses benefits such as tax breaks.[10]
The triple bottom line was adopted as a part of the State Sustainability Strategy,[11] and
accepted by the Government of Western Australia but its status was increasingly marginalised by
subsequent premiers Alan Carpenter and Colin Barnett and is in doubt.