Social and environmental issues play a greater role in consumer and B2B choices than ever before. The “Green” movement was on the fringes of mainstream culture just a few years ago. Today, global warming, eco-sensitivity, fair trade and sustainability are issues that can have a tremendous impact on businesses of all sizes. A relatively new marketing model — the triple bottom line — offers businesses of all sizes an opportunity to create sustainable businesses that benefit people, the plan and corporate profits.
While the traditional marketing model’s success is typically judged by increased revenue, there is a new approach adopted by companies who want to become sustainable businesses. The triple bottom line – economic, social and environmental – creates a framework for marketers to use their knowledge of customer attitudes about sustainability and environmental issues to inform and influence a company’s external communications and executive-level decision-making. As communicators within an organization, technology marketers play a lead role in the triple bottom line process, acting as the touch point between the business and its customers.
What Is the Triple Bottom Line?
The triple bottom line refers to an accounting model in which environmental and social considerations are measured along with financial performance. The concept shifts corporate responsibility from shareholders’ profits to stakeholders’ interests. In other words, the triple bottom line focuses on anyone who is affected by an organizations decisions, rather than focusing on investors.
Because it includes social, economic and environmental considerations, the triple bottom line’s goal is sustainability. Socially, a triple bottom line organization is characterized by fair business practices that benefit many stakeholders while exploiting none. Economically, the “profits” from the triple bottom line, including clean air, improved safety, clean water, etc., are shared by the society, as well as internal corporate profits that keep the business running. Environmentally, a triple bottom line organization works to reduce its carbon footprint and be responsible for the entire life cycle of its products.
Pros and Cons of the Triple Bottom Line
In addition to the apparent ecological benefits of sustainable corporate practices, proponents of the triple bottom line cite the following arguments:
- Untapped market potential, such as eco-tourism, offer profitable business opportunities
- Providing sun ovens and wind-powered generators create triple bottom line opportunities
Many organizations agree that social and environmental concerns are very important, but they disagree with the ‘Triple Bottom Line’ as the way to improve these conditions for the following reasons:
- Business best serves society when it is engaged in its core competency (i.e. making widgets). The triple bottom line diverts business from its core competency.
- Wealthy nations are concerned with the social and environmental issues while the rest of the world is more concerned with starvation.
- Businesses should not be forced to be stewards of the environment.
While the green movement continues to gain momentum, many businesses have voluntarily adopted triple bottom line models for sustainability. As consumers and other stakeholders become more aware of the impact of an organization’s business practices on their daily lives, the demand for greater corporate responsibility will grow and more companies will adopt practices to support the triple bottom line.