Triple Bottom Line

The idea of the “triple bottom line” (TBL or 3BL) goes back to 1994, when the phrase was coined by John Elkington. He argued that companies should we working toward three equally important bottom lines: profit, people, and planet (3P). This is a major component of the stakeholder value movement of the 21st century.

TBL has become the dominant approach to “public sector full cost accounting.” Usually a corporate commitment to environmental/social responsibility means a commitment to some sort of TBL accounting.

One problem with the triple bottom line is that the three separate accounts cannot easily be added up. It is difficult to measure the planet and people accounts in the same terms as profits—that is, in terms of cash.

The triple bottom line goes beyond the usual measures of success (profits, return on investment, shareholder value) to try and measure environmental and social aspects.

The TBL is an accounting framework that incorporates three dimensions of performance: social, environmental, and financial.

One problem with the triple bottom line is that the three separate accounts cannot easily be added up. It is difficult to measure the planet and people accounts in the same terms as profits—that is, in terms of cash.

There are a few methods with which to determine a unit of measure — one is to monetize all dimensions, and then compare everything in dollars. Another is to create some sort of index. The flexibility of the TBL  is important for these kinds of concerns — its measurements can be adapted to fit the industry or sector being assessed, in order to ensure a detailed assessment.
Economic measures: “variables that deal with the bottom line and the flow of money. It could look at income or expenditures, taxes, business climate factors, employment, and business diversity factors.”

Environmental measures: “Represent measurements of natural resources and reflect potential influences to its viability. It could incorporate air and water quality, energy consumption, natural resources, solid and toxic waste, and land use/land cover.”

Social measures: “could include measurements of education, equity and access to social resources, health and well-being, quality of life, and social capital.

Genuine Progress Indicator (GPI): “consists of 25 variables that encompass economic, social and environmental factors. Those variables are converted into monetary units and summed into a single, dollar-denominated measure.” Researchers emphasize this kind of integrated assessment approach: we shouldn’t fool ourselves into thinking that the three areas are distinct entities, unrelated and separate.

Cascade Engineering is a private company (so it doesn’t have to release the kind of financial information that public companies do) that releases the variables on its yearly TBL scorecard:

  • Economic
    • Amount of taxes paid
  • Social
    • Average hours of training per employee
    • From welfare to career retention
    • Charitable contributions
  • Environmental/Safety
    • Safety incident rate
    • Lost/restricted workday rate
    • Sales dollars per kilowatt hours
    • Greenhouse gas emissions
    • Use of post-consumer and industrial recycled material
    • Water consumption
    • Amount of waste to landfill

The city of Cleveland does its own TBL sustainability assessment, which uses four areas to measure sustainability:

  1. Personal and social environment
  2. Natural environment
  3. Built environment (infrastructure, urban growth)
  4. Business environment

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Idea: Triple Bottom LineThe Economist Online. 17 November 2009.

Wikipedia, “Triple bottom line

Slaper, Timothy F. and Tanya J. Hall. “The Triple Bottom Line: What is it and How Does it Work?” Indiana Business Review 86. 1 (Spring 2011).

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  1. […] emphasizing other types of successful performance — the triple bottom line concept (TBL), for one, and “patient capital” (the monetary equivalent to slow food) […]



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