Tuesday, August 4, 2009

Another way to view the Triple Bottom Line

We often imagine the Triple-Bottom Line (TBL) as a three legged stool. While that metaphor works on one level, it really isn’t all that helpful. A TBL organization needs to think about and manage all three-legs successfully but it must be noted that each of the three legs are unique with different goals and objectives.

It is my experience that most business organizations tend to focus on the profit and ecological legs of the stool with a lesser focus on the people side. I think this is partially due to the pressing and well known ecological concerns as well as the relative simplicity of measuring, monitoring and making changes to the environmental forces. Dealing with people is always more complex and challenging.

When I think about the TBL, I think of each leg uniquely.

I think about the profit leg as fuel. Like a rocket, we go nowhere without fuel in our current capitalistic society. Revenues and profits are only relevant because they provide the necessary resources. In the future, when we’ve figured sustainability out and are living in a different paradigm, I’m not convinced this leg of the stool will still exist.

I think of the people leg as the reason d’etre for a business organization. Why else are we here and engaged if it isn’t to make lives better. Ideally, the purpose of any human endeavor would be the advancement of human wellbeing while creating zero to little negative environmental impact. That is how a sustainable society would operate. Humans have always had an economy and the purpose of a human economy is to meet the social, spiritual and material needs of people. Why operate a business if it isn’t to improve the lives of your employees, the community and other stakeholders?

I think of the environmental leg as the constraint leg. Our society must operate and live within the ecological limits of the planet. The planet is just fine by itself and doesn’t need anything from us except for us to stop doing damage. This should be the goal of every person and business: No damage. The economy must operate within the physical constraints of the Earth, which is a closed-system (except for sunlight).

Therefore, the goal of a TBL firm is to use profits and revenues to meet the social, spiritual and material needs within their community while minimizing any negative environmental impacts. What can your firm accomplish while holding environmental impact at zero?

In my next post I’ll share some examples of how we implement this at TriLibrium.