John Elkington recently “recalled” the Triple Bottom Line (TBL) management framework he created nearly 25 years ago because it hasn’t lived up to its promise. Elkington’s main criticism was that the TBL has been applied too narrowly. He’s right, but from my point of view the failure isn’t with the framework, it’s with its implementation and management.
The TBL concept was intended to be more than a framework for simply checking the sustainability box for investors or other stakeholders. Elkington explained, “...the TBL wasn’t designed to be just an accounting tool. It was supposed to provoke deeper thinking about capitalism and its future, but many early adopters understood the concept as a balancing act, adopting a trade-off mentality.”
We at Third Partners believe that trade-offs are a reality of business and life. Even after 25 years, sustainability is still a relatively new and often misunderstood concept, so it’s natural that business leaders would begin approaching it as a trade-off. Publicly traded companies are at the greatest risk of this mentality because their short-term focus on quarterly targets rarely allows a far enough sightline to adequately anticipate and proactively prepare for the mounting pressures related to environmental, social and governance (ESG) factors.
Sustainability is complicated, and so is effectively integrating multiple voluntary frameworks (not just TBL) that require buy-in from leadership and proper management and implementation throughout a company’s ranks. My colleagues and I have helped many clients move past the box-checking mentality to apply frameworks like TBL more broadly. We no longer have to make the business case for companies to pursue sustainability, now we make the case for how far and wide companies should adopt it.
Some companies are evolving their thinking quickly. Elkington singles out the B Corp movement as an example of shifting beyond the trade-off mentality, of competing to be the best for the world. Many B Corps embrace the motto “using business as a force for good” and design better, more responsible offerings for the marketplace. B Corps, mission-driven companies and the purpose economy are on the rise largely thanks to Millennials demanding more from companies than business as usual.
Such demands have helped sustainability mature, but we have a long way to go. TBL has been an important part of moving us forward, but, as Elkington puts it, “Thousands of TBL reports are now produced annually, though it is far from clear that the resulting data are being aggregated and analyzed in ways that genuinely help decision-takers and policy-makers to track, understand, and manage the systemic effects of human activity.”
Mismanagement of sustainability data is a primary reason leaders are disconnected from sustainability. Rethinking how you collect and communicate sustainability data allows an expansion of analytics which enables executives to tie sustainability to broader corporate goals and develop more effective strategies.
Factors other than data, analytics, and the strategies they shape contribute to what Elkington describes as the way CEOs and CFOs “move heaven and earth” to hit financial targets but not their people and planet goals. There is a lot to unpack here, but I think Elkington placed too much responsibility on the TBL when he wrote, “Clearly, the Triple Bottom Line has failed to bury the single bottom line paradigm.” One framework isn’t going to spark a wholesale shift in capitalism, but frameworks are essential for moving us towards increasingly more responsible ways of doing business.
The point of the recall was to stir the pot. The business and sustainability communities need regular challenges to the ways we think about the motivations, methods, and tools we use to pursue and measure social and environmental progress. These communities need to move beyond low-risk, narrow-minded ideas to embrace change and a growth mindset in order to move the needle on sustainability.
We need thought leaders like Elkington to shake things up and courageous CEOs to advocate for sustainability’s potential. While they pull from the front, it’s up us practitioners to push from within to help our employers and clients ask challenging questions about their motivations, methods, and tools.
Image credit: Giggel/Wiki Commons