The Triple Bottom Line: A look back – and forwards by Adrian Zicari.

Sure, the readers of our magazine do not need a presentation of the Triple Bottom Line (TBL). The tool, and indeed, the concept of different, simultaneous, yet complementary corporate results is well known. This is the kind of common knowledge that we take for granted in any business conversation. However, it always helps to have some historical perspective about the TBL, why it was created and what really remains of it today. TBL is forever associated with John Elkington, a business author and consultant, who popularised this tool in his now classic book, published in 1997.

The Triple Bottom Line was revolutionary

At the time, the idea was revolutionary. Companies should not be measured solely on their financial results, that is, their economic bottom line. They would also need to achieve good results in two other bottom lines: environmental and social ones. At least, a company should not be profitable (positive economic bottom line) because it is, for instance, polluting (negative bottom line) or not treating their employees well (negative bottom line).

Otherwise said, the TBL alerts about the tensions between profit and sustainability. Furthermore, it reminds us of the risk of cross-subsidisation among the three bottom lines. Not only the economic bottom line, but all the three of them should be positive.

TBL: A long road

As any other human invention, the TBL has its share of limitations. Some of them are well known. For instance, the time perspective is not present. While economic results happen right now, environmental and social results may take years to realise, and in any case, remain far more difficult to grasp and measure.

Moreover, comparisons among the three kind of results are conceptually impossible, and no one would like to engage in trade-offs among them (for instance, less social results in exchange for more environmental results). Indeed, the same Elkington, some years ago, called for a “recall” of his idea, claiming that it has been badly used.

TBL: And a good cause

In any case, as it happens with any well-intentioned inspiration, what matters is what we learn out of it. I would say that the TBL had the merit of illustrating the tensions between economic objectives and other, non-financial objectives. These tensions, which correspond to the complexity of leading a coalition of shareholders and stakeholders, remain at the heart of today’s management.

At the CoBS, we are aware of such tensions, of such complexity. Students in our schools can no longer learn those elegant, abstract, idealised economic models that assumed pure economic maximisation. Those models may be nice, but they fail to represent the new economic and social realities. That is precisely why the Global Voice magazine has something to say, in this moment of change, challenge and hope. Welcome to the new edition of the GV.         

Prof. Adrian Zicari, ESSEC Business School, Academic Director, Council on Business & Society.

Global Voice magazine #28 and its inside cartoon section in tribute to the Triple Bottom Line:

Useful links:

• Download the latest issue of Global Voice magazine, winter issue #28 from the CoBS website or this blog
• Link up with Prof. Adrian Zicari on LinkedIn
• Read a related article: Moving with and beyond CSR: The 6 Ps of conscious business.

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