Hammer & Pivo (2017). The Triple Bottom Line and Sustainable Economic Development Theory and Practice.

Overview of the Triple Bottom Line (TBL)

The Triple Bottom Line (TBL) is a framework that evaluates the social, environmental, and economic value generated by investments. This concept has become increasingly important within various economic development fields, including business, finance, planning, and real estate. Although TBL's relevance is recognized in literature concerning economic development, a clear definition regarding TBL economic development is often absent, emphasizing a need for additional research into how professionals in this field interpret and implement TBL principles.

The Triple Bottom Line Concept

First coined in the 1990s by John Elkington, TBL seeks to quantify not only financial performance but also ecological and social impacts of business operations. Often summarized as the 3Ps (people, planet, profit), TBL aims to create a more comprehensive understanding of value and resource efficiency. This approach directly aligns with the principles of sustainable development, which advocate for meeting current generations' needs without compromising those of future generations. Inherent to this concept are notions of environmental stewardship and the necessity for equity across generations in the context of resource use.

Importance in Economic Development

The TBL concept's relevance is reflected in the growing number of academic resources and professional organizations focusing on sustainability. Key disciplines influenced include impact investing, responsible property investment, and corporate social responsibility. Despite its importance, the integration of TBL into traditional economic development practices remains limited.

Distinctions Between Economic Development and Growth

Economic development is generally understood as the process of wealth creation, indicated by metrics such as job creation, per capita income growth, and gross domestic product (GDP). However, there is a distinction between economic development and economic growth; the former relates to changing the structure of the economy to facilitate growth or enhance societal conditions, while the latter describes changes in economic size. Recognizing these differences is essential for implementing TBL principles in economic development initiatives.

Human Well-Being and Natural Capital

Furthermore, historical debates have scrutinized the relationship between economic growth and human well-being, questioning whether growth genuinely equates to better quality of life due to limitations inherent in standard economic indicators such as GDP. Measures of economic welfare often overlook valuable contributions such as ecosystem services, which provide essential resources and benefits like flood control and pollination. The need for improved accounting of such natural capital is highlighted by estimates placing the global value of ecosystem services between $125 and $145 trillion annually.

Charges to Economic Development Practices

The traditional approach to economic development has occasionally sidelined social and environmental factors. However, literature encourages a focus on quality of life, equitable development, and social capital, reinforcing that economic vitality cannot solely rely on fiscal metrics.

Definition of TBL Economic Development

The authors define TBL economic development as initiatives that create or retain jobs and wealth while also contributing positively to environmental, social, and economic well-being over time. This perspective merges economic systems with societal needs and ecological constraints, suggesting a necessary reevaluation of conventional development paradigms that often prioritize growth over holistic well-being.

The Role of Practitioners and Survey Findings

Research indicates a gap between the acknowledgment of TBL's importance in economic development and its active incorporation into practice. Surveys of economic development professionals reveal that while there is substantial support for TBL principles, practical engagement with these ideas is limited. For instance, many professionals report a lack of familiarity with the TBL term, especially those serving rural regions compared to urban counterparts.

Perceptions of TBL Importance

Despite discrepancies in familiarity, a significant majority (91%) of surveyed practitioners regard considering TBL dimensions during economic development investments as moderately to very important. Gender differences emerge, with females more likely to view TBL consideration as essential.

Use of TBL Tools

About 57% of respondents express a need for tools to appraise TBL impacts systematically, indicating a desire for greater organizational resources to facilitate comprehensive TBL evaluations.

Current Applications and Observations in Practice

Although many respondents understand the significance of TBL, nearly 75% are unaware of jurisdictions, including their own, that systematically apply TBL in economic development. The term itself often remains unacknowledged even when practices align with TBL principles. The diversity of TBL applications spans various community types and economic development activities, but integrate common themes of inclusive planning and stakeholder collaboration.

Recommendations for Advancing TBL Practice

To enhance the integration of TBL principles in economic development, the authors emphasize the importance of training, assessment frameworks, incentive structures, and research. For example, professional associations should incorporate TBL concepts in certification requirements, and educational programs should offer training to support practitioners in applying these frameworks effectively.

Conclusion

This exploration of the TBL in economic development underscores the critical need to adopt a more holistic approach to economic vitality that recognizes the interplay between environmental, social, and economic factors. By fostering collaboration, enhancing skills, and developing supportive policies, the field can move towards a model of sustainable economic development that aligns with the needs of communities and the environment.