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Understanding Triple Bottom Line Theory

The TBL posits that companies should focus on three bottom lines: profits, people, and the planet. It measures a company's financial, social, and environmental performance over time. The TBL aims to gauge a company's commitment to corporate social responsibility and reducing its environmental impact, not just focusing on profits. It was coined by John Elkington in 1994 to advance the goal of sustainable business practices.

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Gujar Dwarkadas
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605 views7 pages

Understanding Triple Bottom Line Theory

The TBL posits that companies should focus on three bottom lines: profits, people, and the planet. It measures a company's financial, social, and environmental performance over time. The TBL aims to gauge a company's commitment to corporate social responsibility and reducing its environmental impact, not just focusing on profits. It was coined by John Elkington in 1994 to advance the goal of sustainable business practices.

Uploaded by

Gujar Dwarkadas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

MFS: Triple Bottom

Line
BY MAYUR D. GUJAR
Introduction of TBL

 The triple bottom line (TBL) is a framework or theory that recommends that companies commit to focus on social and
environmental concerns just as they do on profits. The TBL posits that instead of one bottom line, there should be
three: profit, people, and the planet. A TBL seeks to gauge a corporation's level of commitment to
corporate social responsibility and its impact on the environment over time.
 The triple bottom line aims to measure the financial, social, and environmental performance of a company over
time.
 The TBL consists of three elements: profit, people, and the planet.
 TBL theory holds that if a firm looks at profits only, ignoring people and the planet, it cannot account for the full
cost of doing business
 In 1994, John Elkington—the famed British management consultant and sustainability guru—
coined the phrase "triple bottom line" as his way of measuring performance in corporate America.
The idea was that a company can be managed in a way that not only earns financial profits but
which also improves people's lives and the planet.
Understanding the Triple Bottom Line

 In finance, when we speak of a company's bottom line, we usually mean its profits.
Elkington's TBL framework advances the goal of sustainability in business practices,
in which companies look beyond profits to include social and environmental issues
to measure the full cost of doing business.
 Moreover, the TBL tenet holds that if a company focuses on finances only and does
not examine how it interacts socially, that company cannot see the whole picture, and
thus cannot account for the full cost of doing business.

People + Planet = Social + Environmental Responsibility


 According to TBL theory, companies should be working simultaneously on these
three bottom lines:
Profit: The traditional measure of corporate profit—the profit and loss (P&L)
account.
People: Measures how socially responsible an organization has been
throughout its operations.
The Planet: Measures how environmentally responsible a firm has been.
3Ps

 People: the positive and negative impact an organization has on its most important
stakeholders. These include employees, families, customers, suppliers, communities, and
any other person influencing or being affected by the organization.
 Planet: the positive and negative impact an organization has on its natural environment.
This includes reducing its carbon footprint, usage of natural resources, toxic materials and
so on, but also the active removal of waste, reforestation and restoration of natural harm
done.
 Profit: the positive and negative impact an organization has on the local, national and
international economy. This includes creating employment, generating innovation, paying
taxes, wealth creation and any other economic impact an organization has.
Thanks you

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