Communique

Triple Bottom Line Framework Simply Explained

March 29, 2021

I was reading the latest book by John Elkington, the Green Swans, and I have to say I was disheartened to read that he has retracted his original Triple Bottom Line model also known as 3BL Framework. In his framework he emphasises the importance of reporting People, Planet and Profit all together and not disjointly. He was not retracting the model because it was not working but because he felt that global organisations used the model as a tick boxing exercise without really mastering the art of reporting the People and Planet aspect.

If you are Founder, a CEO, or a Communicator you will one way or another encounter the 3BL frameowrk so here is what it is simply explained for you.

Traditionally, business leaders concerned themselves with their bottom lines—or, the monetary profits their businesses made. Today, more leaders have begun to think sustainably. The triple bottom line theory expands the traditional accounting framework to include two other performance areas: the social and environmental impacts of their company.

Let’s look at People:

“People” considers employees, the labour involved in a corporation’s work, and the wider community where a corporation does business. Another way to look at “people” is, does the company give back to the society its operating in? A triple bottom line company pays fair wages and takes steps to ensure humane working conditions at supplier factories. Think STEM initiatives with the local schools.

Now lets head to Planet:

The “planet” piece of the triple bottom line indicates that an organization tries to reduce its ecological footprint as much as possible. These efforts can include reducing waste, investing in renewable energy, managing natural resources more efficiently, and improving logistics. (University of Wisconsin)

Challenges of Applying the Triple Bottom Line

A key challenge of the 3BL, according to Elkington, is the difficulty of measuring the social and environmental bottom lines. Profitability is inherently quantitative in $, so it is easy to measure. What constitutes social and environmental responsibility, however, is somewhat subjective. (Investopedia)

Examples of companies that applied Triple Bottom Line successfully:

Ben & Jerry's is the ice cream company that made conscious capitalism central to its strategy. As stated on its website, "Ben & Jerry's is founded on and dedicated to a sustainable corporate concept of linked prosperity." The company supports opposing the use of recombinant bovine growth hormone (rBGH) and genetically modified organisms (GMOs) and fosters myriad values such as fair trade and climate justice. (Investopedia)

The LEGO Group (privately held; Billund, Denmark) has formed partnerships with organizations like the World Wildlife Fund. In addition, LEGO has made a commitment to reduce its carbon footprint and is working towards 100% renewable energy capacity by 2030. (Investopedia)

The Triple Bottom Line concept developed by John Elkington has changed the way businesses, non-profits and governments measure sustainability and the performance of projects or policies. Its flexibility and vagueness in measuring it meant that organisations could adapt the concept in a way that is best suited to where it operates and how it runs its business.

Communique specialises in communicating Environmental, Social, Governance (ESG) strategies. Our work has impacted 150K employees, 200k customers and resulted in £300M investment deals completed. If you need help gaining buy-in from your leadership team or designing your ESG communication strategy get in touch

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