ORGSTUDY 208 Lecture Notes - Lecture 1: Triple Bottom Line, Natural Environment, Social Capital
15 Jun 2018
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Triple Bottom Line (Elkington) - general definition:
● Accounting framework that incorporates three dimensions of performance: social, environmental,
and financial
○ Commonly called three Ps: people, planet and profits
○ Important tool for supporting sustainability goals
● TBL captures the essence of sustainability by measuring the impact of an organization’s activities
on the world: including both its profitability and shareholder values and its social, human and
environmental capital
Calculating the TBL:
● 3Ps do not have a common unit of measure → profits = $$$, but what about environmental
or ecological health?
● Solutions:
○ Monetizing all the dimensions of the TBL, including social welfare or environmental
damage
■ Pro: benefit of having a common unit - dollars
■ Con: question the method of finding the right price for lost wetlands or
endangered species
○ Calculate the TBL in terms of an index -
■ Pros: allows for comparison between entities (i.e. comparing performance
between companies, cities, development projects or some other benchmark)
■ eliminates incompatible units issue
■ Cons: allows for some subjectivity → i.e. how do we weight the index --
which category of 3Ps is considered most important and who decides
○ Do away with measuring sustainability using dollars or using an index - each
sustainability measures would stand alone → i.e. acres of wetland would be a measure,
for example, and progress would be gauged based on wetland creation, destruction or
status quo overtime
■ Con: proliferation (rapid inc. in numbers) of metrics that may be pertinent to
measuring sustainability may make it hard to measure
What measures go into the index?
● No universal standard method for calculating the TBL
● No universally accepted standard for the measures that comprise each of the three
○ Can be viewed as a strength because it allows a user to adapt the general framework to
the needs of different entities (i.e. businesses), different projects or policies (i.e.
educational programs), or different geographic boundaries (i.e. a region)
■ Ex) business and local govt. agency may gauge environmental sustainability
in same terms - amt of solid waste that goes into landfills, but a local mass
transit might measure success in terms of passenger miles → TBL accounts for
these diffs.
● Case specific or broad scope
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Accounting framework that incorporates three dimensions of performance: social, environmental, and financial. Commonly called three ps: people, planet and profits. Tbl captures the essence of sustainability by measuring the impact of an organization"s activities on the world: including both its profitability and shareholder values and its social, human and environmental capital. Monetizing all the dimensions of the tbl, including social welfare or environmental damage. Pro: benefit of having a common unit - dollars. Con: question the method of finding the right price for lost wetlands or endangered species. Calculate the tbl in terms of an index - Pros: allows for comparison between entities (i. e. comparing performance between companies, cities, development projects or some other benchmark) Cons: allows for some subjectivity i. e. how do we weight the index -- which category of 3ps is considered most important and who decides. Con: proliferation (rapid inc. in numbers) of metrics that may be pertinent to measuring sustainability may make it hard to measure.
