Triple Bottom Line: recognizing challenges and moving forward
By: Rohitha Edara, MSU REI, Graduate Assistant, edararoh@msu.edu
The Triple Bottom Line is a novel and unique concept, worthy of the focus it receives from scholars, practitioners and citizens interested in economic, community and environmental development. However, not all this focus touts Triple Bottom Line as a viable or even, a desirable solution to the serious and immediate problems our planet faces. As REI begins to focus its efforts on understanding and developing the Triple Bottom Line this year, it is also important to recognize its limitations and work towards solutions. Firstly, what exactly is the Triple Bottom Line? Popularly known as the 3BL or TBL, it is an attempt to hold companies accountable for their overall impact on our planet, including societal and environmental impacts, by moving away from traditional frameworks that focus singularly on making profits.It encourages companies to adopt an integrated framework to report their impacts on "profits, people and the planet" (Slaper and Hall, 2011).
However, distinguished researchers in the field, Wayne Norman and Chris MacDonald point out, "what's sound about the 3BL project is not novel, and what is novel is not sound" (2003). Many scholars argue that the idea of accounting for impacts in a wider range of dimensions has been around for a long time. However, even though the 3BL might not be a novel concept, it deserves some credit for garnering widespread support across for-profit, nonprofit and government sectors. Many businesses and non-profit organizations have adopted the TBL sustainability framework to evaluate their performance, and a similar approach has gained currency with government at the federal, state and local levels" (Slaper and Hall, 2011).
In addition, an even more troubling limitation of the 3BL is its inability to be "sound" (Norman and MacDonald, 2003). Though the idea of 3BL is viable, there are no widely accepted frameworks to measure or implement it in real-world organizations. Adding the community and environmental factors into accounting is challenging as they are much more difficult to measure than economic aspects. In addition, even if they were measured, an added complication is finding a common unit of measurement for the three distinct components (Slaper and Hall, 2011). While, some advocate for the monetization of social and environmental factors to combat this, many object to it on moral grounds (How can we put a price?) or practical ones (Even if we try, how do we determine the price of a river tor tree?).
In essence, 3BL has certain limitations in novelty, measurement, and practical usage, which need to be taken into account while using or developing this concept. However, while it may not be ideal, it is definitely, at the very least, a starting point for conversation between profit-hungry businesses, government agencies, development professionals, and environmentalists.
Works Cited:
- Slaper, T.F. & Hall, T. J. (2011). The Triple Bottom Line: What Is It and How Does It Work? Indiana Business Review.
- Norman, W, & MacDonald, C (2003). Getting to the Bottom of "Triple Bottom Line." Business Ethics Quarterly.