ABC of SCP, Triple Bottom Line
The Triple Bottom Line encapsulates a nice idea. Besides just aiming for profit, a modernisation organisation this day should consider three broad areas of impact it has - economic, social and environmental. It is common and simple to measure one of these through financial profit but there is no systematic means of measuring the other two. Therefore, a “triple bottom line” has been introduced to capture beyond the financial bottom line (profit or loss) but the social and environmental impacts of activity.
The influence of the triple bottom line is considerable, and it is both positive and baleful, almost ubiquitous. Especially regarding discussions on the relation of sustainability and businesses.
Profit, profit and profit are the traditional approach for businesses and industries. And who can blame them for doing so? These have always been the goal of enterprises at their core. However, in today where we are all connected and resources are running out, we can’t just equate P for profit anymore.
What is it and how does it work?
People. Planet. Profit.
The TPL is known as a key to sustainability, the concept means that business success is no longer defined by mere monetary gain but also by the impact an enterprise’s activities have on society as a whole. TPL calls for a company to be responsible to its stakeholders rather than shareholders. Stakeholders are anyone who may be affected by a company’s or industry’s practices, from workers to surrounding communities and beyond. It involves consideration of vibrant communities, healthy environment and strong profitability.
Triple bottom line accounting attempts to describe the social and environmental impact of an organisation’s activities, in a measurable way through the use of environmental sustainability and social responsibility criteria when judging the overall performance of a company, in addition to pure financial considerations.