Elkington's Triple Bottom Line

What is the triple bottom line?

It is a way of assessing business performance based on 3 important areas?

What are the 3 important areas?

• Profit

• People

• Planet

What is the traditional ‘bottom line'?

• Businesses assumed to be profit-maximisers

• Traditional measure of business success

• Closely linked with business value (e.g share price)

• Often the basis for financial incentives (e.g. bonuses)

How does it suggest there is more to business success than profit?

It aims to measure the financial, social and environmental performance of a business over a period of time

What are features of profit?

• Familiar to manager

• Identified from income statement

• Audited=reiable figure

What are features of the planet?

• Measures the impact of business on the environment

• More tangible- e.g. emissions, use of sustainable inputs

What are features of people?

• Measures the extent to which a business is socially responsible

• It is hard to calculate, report reliably and consistently

What are benefits and value of the Triple Bottom Line?

• Encourages businesses to think beyond narrow measures of performance (profit)

• Encourages CSR reporting

• Supports measurement of environmental impact & extent of sustainability

What are drawbacks and criticism of the Triple Bottom Line?

• It is not very useful as an overall measure of business performance

• It is hard to reliably and consistently measure People & Planet's bottom lines

• No legal requirement to report it - so take-up has been poor