8/13/2019 Literature Review on Triple Bottom Line 2003

1/2

Literature Review on Triple Bottom Line.

The triple bottom line is made up of "social equity, economic, andenvironmental" factors.

"People, planet and profit" succinctly describes the triple bottom lines and the goal

of sustainability. The phrase, "people, planet, profit", was coined by John Elkington in 199while at !ustainability, and was later adopted as the title of the nglo#$utch oil company !hell%s

first sustainability report in 199&. s a result, one country in which the 'P concept took deep

root was The (etherlands.

"People"pertains to fair and beneficial business practices toward labor and the community andregion in which a corporation conducts its business. T)* company concei+es a reciprocal

social in which the well#being of corporate, labor and other stakeholder interests are

interdependent.

triple bottom line enterprise seeks to benefit many constituencies, not eploit or endanger any

group of them. The "up streaming" of a portion of profit from the marketing of finished goodsback to the original producer of raw materials, for eample, a farmer infair tradeagricultural

practice, is a common feature. -n concrete terms, a T)* business would not use child labour andmonitor all contracted companies for child labor eploitation, would pay fair salaries to its

workers, would maintain a safe work en+ironment and tolerable working hours, and would not

otherwise eploit a community or its labor force. T)* business also typically seeks to "gi+e

back" by contributing to the strength and growth of its community with such things as healthcare and education. uantifying this bottom line is relati+ely new, problematic and often

sub/ecti+e. The 0lobal eporting -nitiati+e20-3 has de+eloped guidelines to enable

corporations and(04salike to comparably report on the social impact of a business.

"Planet"2natural capital3 refers to sustainable en+ironmental practices. T)* companyendea+ors to benefit the natural order as much as possible or at the least do no harm and

minimi5e en+ironmental impact. T)* endea+or reduces its ecological footprintby, among

other things, carefully managing its consumption of energy and non#renewable and reducingmanufacturing waste as well as rendering waste less toicbefore disposing of it in a safe and

legal manner. "6radle to gra+e" is uppermost in the thoughts of T)* manufacturing businesses,

which typically conduct alife cycle assessmentof products to determine what the trueen+ironmental cost is from the growth and har+esting of raw materials to manufacture to

distribution to e+entual disposal by the end user. triple bottom line company does not produce

harmful or destructi+e products such as weapons, toic chemicals or batteries containingdangerous hea+y metals, for eample.

6urrently, the cost of disposing of non#degradable or toic products is borne financially bygo+ernments and en+ironmentally by the residents near the disposal site and elsewhere. -n T)*

thinking, an enterprise which produces and markets a product which will create a waste problemshould not be gi+en a free ride by society. -t would be more e7uitable for the business which

manufactures and sells a problematic product to bear part of the cost of its ultimate disposal.

"Profit"is the economic value created by the organization after deducting the cost of allinputs, including the cost of the capital tied up. It therefore differs from traditional

http://en.wikipedia.org/wiki/Sustainabilityhttp://en.wikipedia.org/wiki/Fair_tradehttp://en.wikipedia.org/wiki/Global_Reporting_Initiativehttp://en.wikipedia.org/wiki/NGOhttp://en.wikipedia.org/wiki/Ecological_footprinthttp://en.wikipedia.org/wiki/Toxicityhttp://en.wikipedia.org/wiki/Cradle_to_gravehttp://en.wikipedia.org/wiki/Life_cycle_assessmenthttp://en.wikipedia.org/wiki/Sustainabilityhttp://en.wikipedia.org/wiki/Fair_tradehttp://en.wikipedia.org/wiki/Global_Reporting_Initiativehttp://en.wikipedia.org/wiki/NGOhttp://en.wikipedia.org/wiki/Ecological_footprinthttp://en.wikipedia.org/wiki/Toxicityhttp://en.wikipedia.org/wiki/Cradle_to_gravehttp://en.wikipedia.org/wiki/Life_cycle_assessment

8/13/2019 Literature Review on Triple Bottom Line 2003

2/2

accounting definitions of profit. In the original concept, within a sustainability framework,the "profit" aspect needs to be seen as the real economic benefit enjoyed by the hostsociety. It is the real economic impact the organization has on its economicenvironment. This is often confused to be limited to the internal profit made by acompany or organization (which nevertheless remains an essential starting point for the

computation. Therefore, an original T! approach cannot be interpreted as simplytraditional corporate accounting profit plussocial and environmental impacts unless the"profits" of other entities are included as a social benefit.

8ig Triple )ottom *ine

eferences

13 http::griid.org:;