The term "triple bottom line" was coined in 1994 by renowned British management consultant and sustainability expert John Elkington to measure corporate America's performance. The concept was that business could be run to enhance human well–being and environmental sustainability in addition to generating profit. The Triple Bottom Line (TBL) is an accounting framework that considers social, environmental, and financial performance dimensions, also known as the 3Ps: people, planet, and profits.
People: In the context of the triple bottom line, "people" encompasses everyone connected to a company, including employees, vendors, and customers. This approach shifts the traditional focus from solely prioritizing investors or shareholders to ensuring that all stakeholders, even those not financially invested, benefit from the company’s operations. It involves providing fair wages and safe working conditions for employees, supporting diverse suppliers, and considering customer feedback on equity and safety. Instead of solely driving investor returns, the triple bottom line aims to create broader value, such as by fostering employee volunteerism and supporting small businesses.
Planet: The environmental aspect of the triple bottom line has gained unprecedented relevance, especially as companies increasingly face decisions between lower-cost options and more environmentally friendly alternatives. Rather than simply highlighting positive changes, it is often more impactful to assess the environmental consequences of the choices companies make, such as redesigning distribution channels to reduce energy use, which directly lowers greenhouse gas emissions. Key metrics like carbon footprint, energy use, water consumption, and waste production are crucial in measuring a company’s environmental impact. To minimize this impact, businesses can reduce reliance on fossil fuels, opt for eco-friendly transportation, enhance waste management, use ethically sourced materials, and implement energy-efficient technologies.
Profit: In the context of the triple bottom line, profit goes beyond just financial gains; it encompasses the ethical and fair methods by which a company earns its income. This includes aligning with business partners and vendors that share the company’s philanthropic values, meeting financial obligations to lenders, creditors, and employees, and fostering economic growth within the community. Profit also extends to ensuring timely tax payments, supporting local businesses, and investing in community development. Ultimately, profit is not just about how much money a company makes but how it makes it, emphasizing responsible and ethical business practices that benefit both the company and its surrounding community.
At Oxano Capital, we partner with businesses that align with the triple bottom line, putting people, planet, and profit at the forefront of growth. Let's collaborate to drive sustainable development and achieve meaningful results. If your company is committed to creating positive social, environmental, and financial impacts, we invite you to connect with us. Reach out today to explore investment opportunities.