Triple Bottom Line: Metaphor or Measurable?

I’m pondering the concept of the Triple Bottom Line. I first heard the term when I was working with a visionary and I loved the idea – that organisations should care about PEOPLE, PLANET & PROFIT.  Sadly, I was left feeling that it was mere rhetoric. Maybe this was because at that particular organisation people were hired and fired and left so often that I could see “people” were of little import. Or perhaps it was when I realised that planting a vegetable garden does not, on its own, constitute an effective planet-saving initiative. Or when I looked at what we were doing and how much it cost and realised we could have outsourced our entire operation to another better-established institution for less money. Yes, I became she of little faith.

Now, many years on, I’m endeavouring once again to figure out whether the Triple Bottom Line is well-intentioned but meaningless rhetoric or whether it does in fact constitute a valuable goal towards which all organisations should aspire.

The concept of the Triple Bottom Line (also referred to as 3BL) has been gaining traction steadily in the last 10 years. It refers to the idea that that corporations “should (and can) manage not just the good old fashioned bottom-line (i.e. the financial bottom line) but also their social and environmental “bottom lines” too.

Chris MacDonald and Wayne Norman have written a PHD about it. In a summary they write:

On the face of it, this is an attractive idea: it is easy to agree with the idea that corporations have obligations that go beyond financial success. Unfortunately, we find that without exception the 3BL rhetoric fails to live up to its promises. Adding up the financial plusses and minuses is just a lot easier, as it turns out, than totting up, say, the ethical achievements and shortcomings of a firm. Any attempt to arrive at a calculation of a net social or environmental performance is likely to run head-on into just what it is that separates the management of finances from the management of social and environmental impacts. In the financial realm, money provides a common unit of measure that permits expenses to be subtracted from revenues. So while it makes perfect sense to take the costs of labour and materials and subtract those from sales revenues, it makes little sense to talk about (for example) taking a social “minus” such as a sexual harassment lawsuit and subtracting that from a social “plus”, like having engaged in corporate philanthropy. How big a charitable donation do you think it takes to off-set the social “cost” of a sexual harassment suit? Of course there’s no obviously uncontroversial way to make this sort of calculation. In other words, there’s no real social “bottom line”. The kinds of issues that arise in social and environmental domains can be (and regularly are) managed , but they will never be reducible to the kind of common unit of measure that would allow for straightforward bookkeeping.

Their PHD explores whether this really is a practical concept or a mere metaphor. And if it is a metaphor, is it a useful one?

Having spent many months of last year studying the new Companies Act, but ultimately deciding  that my calling is not drafting a perfect Memorandum of Incorporation, I’m intrigued  by the intersection of the new Companies Act, The King Reports on Corporate Governance and my yearning for a conscious Integral Approach to law. These all tie-in to the Triple Bottom Line concept in a way I am not yet fully able to articulate.

I don’t feel I have any insights to offer yet. However the beauty of a blog is that it allows a space in which to air one’s thoughts, even if not completely formed.  So I’m throwing the concept of the Triple Bottom Line out there – as I read further. And I will read the PHD and give a summary of it.  I’m open to any engagement on the issue but it must be thought-provoking!  There’s tons of stuff written about the triple bottom line, in a nutshell I am only interested in the bits that will make me go “wow”.

Tall order? Maybe, but there is so much information available these days that I’m becoming more discerning. I need to be wowed.


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