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Triple Bottom Line the way forward to rehumanize the businesses of the world

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Triple Bottom Line the way forward to rehumanize the businesses of the world

  1. 1. “The Triple Bottom Line” is a must for the survival of the inhabitants of the planet By Maxwell Raansinghe
  2. 2. • The triple bottom line is a business concept that advocates firms should commit to measuring their social and environmental impact—in addition to their financial performance(Profit), the standard “bottom line.” • It can be broken down into “three Ps”: profit, people, and the planet. • As such, the triple bottom line (TBL) uses the power of three — people, planet, and profit — to measure the health and quality of a business’ impact • It is the way forward to rehumanize businesses in the world
  3. 3. The Triple Bottom Line
  4. 4. Profit • In a capitalist economy, a firm’s success most heavily depends on its financial performance, or the profit it generates for shareholders. • Strategic planning initiatives and key business decisions are generally carefully designed to maximize profits while reducing costs and mitigating risk. • In the past, many firms’ goals have ended there. Now, purpose- driven leaders are discovering they have the power to use their businesses to effect positive change in the world without hampering financial performance.
  5. 5. People • The second component of the triple bottom line highlights a business’s societal impact, or its commitment to people. • It’s important to make the distinction between a firm’s shareholders and stakeholders. • Traditionally, businesses have favored shareholder value as an indicator of success, meaning they strive to generate value for those who own shares of the company. • As firms have increasingly embraced sustainability, they’ve shifted their focus toward creating value for all stakeholders impacted by business decisions, including customers, employees, and community members.
  6. 6. The Planet • The final component of the triple bottom line is concerned with making a positive impact on the planet. • Since the birth of the Industrial Revolution, large corporations have contributed a staggering amount of pollution to the environment, which has been a key driver of climate change. • A recent report by the Carbon Majors Database found that 100 companies in the energy sector are responsible for roughly 71 percent of all industrial emissions.
  7. 7. • While businesses have historically been the greatest contributors to climate change, they also hold the keys to driving positive change. • Many business leaders are now recognizing their responsibility to do so. • This effort isn’t solely on the shoulders of the world’s largest corporations—virtually all businesses have opportunities to make changes that reduce their carbon footprint. • Adjustments like using ethically sourced materials, cutting down on energy consumption, and streamlining shipping practices are steps in the right direction.
  8. 8. WHY IS THE TRIPLE BOTTOM LINE IMPORTANT? • To some, adopting a triple bottom line approach may seem idealistic in a world that emphasizes profit over purpose. • Innovative companies, however, have shown time and again that it’s possible to do well by doing good.
  9. 9. • The triple bottom line doesn’t inherently value societal and environmental impact at the expense of financial profitability. • Instead, many firms have reaped financial benefits by committing to sustainable business practices that considers Tripple Bottom Line as a major performance indicator
  10. 10. • The definition of “business success” is evolving • The saying, “business as usual” now holds a new meaning. It is in the eyes of consumers, employees, and other stakeholders compliance standards. • Understanding and operating through a triple bottom line opportunities for optimization, innovation, and improvement sectors. • Engaging a business model with comprehensive consideration and prosperity will ultimately lead to increased resilience and cost savings, decreased organizational risk (i.e. supply chain decrease in unforeseen costs, and overall success
  11. 11. • While new business models continue to evolve, there is still much work for sustainability professionals within every organization, no matter the industry, sector, or job position. • Through triple bottom line theory, sustainability change makers have the opportunity to strategically engage colleagues and leadership. • As a result, we all can make measurable, sustainability-focused progress in virtually everything we do.
  12. 12. How can businesses implement triple bottom lines Businesses need to reevaluate what is meant by ‘success’ at all evels Broader view point of TBL, it is clear that our ‘money makes the world go round’ days are numbered Businesses have to embed sustainability into their strategic vision TBL thinking should be applied to strategic decision making in every aspect of your business They need to assess the current status of their business and how have they considered TBL in their business processors
  13. 13. • They need to find gaps in the core operations and the operations that needs to be made to sustain TBL • Companies need to develop sustainability objectives in all sectors,such as production,distribution,pricing, promotion,processors, people and physical evidence • Employees from the top management to lowest level should know the sustainability goals • Find strategies to attain sustainability objectives • Necessary funds need to be allocated to achieve objectives • Implement, monitor and control sustainability initiatives • Evaluate the overall benefit of sustainability initiatives
  14. 14. • As such, it requires both buy-in and action from stakeholders at all levels — from suppliers to the shop floor. • Practically, departmental heads and executives will need to ensure that all measures of success are tied to the overarching people-planet-profit objectives. • On a truly operational level, personal performance and employee development goals will also need to be reassessed in confluence with the new sustainability criteria.
  15. 15. How to measure TBL in action • As business leaders, measurement is hard-wired into the culture of capitalism ( Profit) ; we have daily check-ins, weekly metrics, monthly assessments and annual reports. • But when it comes to people and planet, how can we calculate the impact our business has on both? • Need to have measurements at operational level like the metrices that are used to calculate profit
  16. 16. Impact on Planet • Environmentally, a business should ideally know the quantifiable effect of its carbon emissions, electricity consumption, waste output, biodiversity impact, and habitat destruction. • These metrics will need to be as specific, measurable and actionable similar to measuring targets like revenue and profits within your business.
  17. 17. • Impact on People • What is the current human cost of a company’s policies and practices on the people that work within the company ( Internal) and people connected to supply chain ( external) • Internal level, that means holding internal procedures to account: maternity allowance, fair pay, pension schemes, better working conditions, gender equity and diversity and many more. • External level : Audit and ensure that you have an ethical supply chain that practices good practices in their own operations
  18. 18. Cost and Control • How can we truly cost and control the financial worth of human and environmental capital? • Some say a better (more comprehensive and more meaningful) option is to abide by a globally recognised index, which plots independently verified data points for cross-industry comparison.
  19. 19. • Some say a better (more comprehensive and more meaningful) option is to abide by a globally recognised index, which plots independently verified data points for cross-industry comparison. • Currently, 75% of the largest 250 companies in the world use the Global Reporting Initiative (GRI) to measure sustainability. • Increasing efforts are made to encourage SMEs to do the same. • Businesses of any size can take advantage of free B Impact Assessment tools to “measure its impact on its workers, community and environment, and customers”.
  20. 20. B Impact Assessment. https://www.bcorporation.net/en- us/programs-and-tools/b-impact-assessment/ • Used by more than 150,000 businesses, the B Impact Assessment is a digital tool that can help measure, manage, and improve positive impact performance for environment, communities, customers, suppliers, employees, and shareholders; receiving a minimum verified score of 80 points on the assessment is also the first step towards B Corp Certification.
  21. 21. Challenges • Major challenge is to get the commitment of business leaders to practically adopt sustainable practices rather than just the talk • Voluntary action is preferred over legal enforcements • Attitude of the shareholders need to be changed that there is a well established business case to be sustainable • Civil society needs to put pressure on businesses to adopt sustainable practices • Eco literacy as a subject should be taught at school level and in adult education to create awareness among all citizens of the world to make “ TB”L is a very important concept for the sustenance of the world they live.
  22. 22. Strategic Sustainable Plan for assignment

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