The Triple Bottom Line (TBL) is a sustainability framework that evaluates the results of a business based on the “three Ps”: Profit, People, and Planet. And it all must be integrated into the company strategy.
This means several things. To start, that a company cannot be financially profitable long term without taking care of the social and environmental parts. But it also implies that for a business to be sustainable there’s no need to give up financial profit. In many cases, this scheme is related to Social Corporate Responsibility, but TBL goes one step further.
These three dimensions are usually viewed as the image above, with three overlapping circles ideally merging in a balance of sustainable development in the center. But the TBL can also be thought of as three concentric circles: that way, the planet is the base for everything, including society, which at the same time counts economy as a part of it.
Those dimensions actually break down into 9 different parts to account for to achieve a correct balance:
- In the social part, we find employees, investors and society.
- On the financial side, we have costs, benefits and investment.
- And the environmental one includes culture, design and ecosystem.
How to calculate it?
We are used to calculating the financial profit of our businesses, but it is not so common or even easy to do so for the other two factors. They could seem somewhat intangible concepts to quantify, but there are many measurable points such as the percentage of employees who are part of a minority or in risk of exclusion, the number of work accidents per year, the carbon footprint, the waste treatment policies or the employment conditions that the company offers.
And to gauge all those points there are several methods. Let’s review the three more commonly used:
- Global Reporting Iniciative (GRI): it’s an organization promoted by the sustainability program of the United Nations, to help and motivate every type of organizations to use sustainability reports.
- Social Return on Investment (SROI): it’s a method used to calculate the social value created in comparison to the economic investment. It’s about analyzing how the communities are involved in the business’ activity, who or what is it affecting and how, the transparency of your actions, and the long-term strategy set. This tool is focused on providing the shareholders of social companies with information since they will be looking not only for a monetary return but also a social one.
- The Common Good Matrix: it’s a tool used by organizations that are part of the Common Good Economy (CGE) to evaluate their success and contribution to the Common Good. With this matrix, the relation between the main groups of interest for a company (suppliers, owners, employees, customers, and social environment) and the main values of the CGE (human dignity, solidarity and social justice, environmental sustainability, and transparency and co-determination) is measured.
If this topic interests you, this short video explains it in a very visual way:
And of course, we would love to hear what you think in the comments or through our contact page!
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