The so-called “triple bottom line” has become sufficiently widespread that misconceptions about it must be corrected, and the way we talk about it must reflect a consensus about what it is. These things must happen because current discussions of the triple bottom line may be doing more harm than good.
Before I get to how this is happening, a quick review: A company is said to be targeting the triple bottom line (I shorten it to TBL) when it addresses the environmental, social, and financial consequences of its actions. This three-pronged concern is popularly expressed as “people, planet, profit.” The TBL is tied very closely to – and for some people is indistinguishable from – sustainable business operations.
The greatest flaw in the formulation of the TBL as “people, planet, profit” is its implicit proposition that profit is somehow distinct from people and planet. That isn’t just wrong, it’s harmfully wrong, because it perpetuates a misconception that is held by business leaders (as one might expect) and also by environmental and social activists and commentators (as one should not expect – but is very real and, in fact, rampant).
The misconception is two-fold:
- that profit does not flow from a company’s attention to environmental (planet) and social (people) concerns and
- that a company will lessen its profits when it pays attention to planet or people.
As an example, I’ll quote from an article titled “Getting Up to Speed on Triple Bottom Line Reporting,” by freelance writer Debbie Van Der Hyde (with apologies for picking on her and the person she quotes, as I encounter many instances every month that misstate what the TBL is and does). Debbie writes:
- “[Laura] Musikanski [executive director of Sustainable Seattle] indicated … ‘In the industrial era, we used the language of profit. In this new era of sustainability, we need a common language for what we’ve done so far and what we want to do.’”
- “Looking ahead at what is to come with triple bottom line reporting, Musikanski said: ‘I’m truly hopeful since I see companies setting — and meeting — goals beyond profitability.’”
I say: Wrong on both counts. The language of sustainability is “the language of profit.” And companies that set and meet environmental and social goals aren’t going “beyond profitability,” they are going to enhance profitability.
I could illustrate this assertion with dozens of examples that show how a company’s attention to environmental or social responsibility contributes to enhanced profitability, but I’ll restrict myself for the moment to the always inspiring example of Jackie Robinson, who, with the concurrence of then-Dodgers general manager Branch Rickey, broke the racial barrier in Major League Baseball in 1947. As recounted by Wall Street Journal columnist William McGurn in his August 24, 2010, commentary, “What Baseball Can Teach Business”:
“My grandfather never accepted any effort to recognize him as a champion of civil rights, because he believed that you don’t accept awards for doing what’s right,” says Branch Rickey III. … “His partnership with Jackie was perhaps the most daring in American sports history, but he knew, too, that it was a good business move, and he never ran away from that justification.”
Branch Rickey’s attention to a social concern – that is, the exclusion of African-American athletes from big league baseball – brought increased profitability not just to the Brooklyn Dodgers of 1947, but to all of organized North American baseball ever since – every team, every year. So please don’t make the mistake of thinking that corporate social (or environmental) responsibility is practiced at the expense of corporate profitability; it is instead a real, and increasingly essential, contributor to corporate profitability.
I’ll further state my case for the death of “people, plant, profit” in future posts.