ORGSTUDY 208 Study Guide - Summer 2018, Comprehensive Midterm Notes - Supply Chain, Greenwashing, Waste Management
12 Oct 2018
School
Department
Course
Professor
ORGSTUDY 208
MIDTERM EXAM
STUDY GUIDE
Fall 2018
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
○ Level of the entity, type of project and geographic scope will drive many of the decisions
about what measures to include - data availability will drive TBL calculations, thus
driving the decisions
● Economic Measures:
○ Deal with the bottom line and the flow of money
■ ex) income or expenditures, taxes, etc
● Specific examples:
○ Personal income
○ Job growth
○ Employment distribution by sector
● Environmental Measures:
○ Represent measurements of natural resources and reflect potential influences to is
viability
○ Having long-range trends for each of environmental variables helps organizations
identify the impacts a project or policy would have on the area
■ Specific examples:
● Sulfur dioxide concentration
● Electricity consumption
● Solid waste management
● Social Measures:
○ Social dimensions of a community or region and could include measurements of
education, equity and access to social resources, health and well-being, quality of life and
social capital
■ Specific examples:
● Unemployment rate
● Median household income
● Average commute time
● Violent crimes per capita
○ Data is analyzed at large or local level (depending on what is more relevant)
○ Approaches to secure stakeholder participation and input in designing TBL framework:
■ Develop a decision matrix to incorporate public preferences into project planning
and decision-making
■ Use a “narrative format” to solicit shareholder participation and comprehensive
project evaluation
■ Have stakeholders rank and weigh components of a sustainability framework
according to community priorities
● ex) community may think an important measure of success for a program
is the # of woman-owned companies
○ Up to org to produce a final set of measures applicable to the
task
Variables to the TBL:
● Huge problem with TBL approach:
○ how to make an index that is both comprehensive and meaningful and how to identify
suitable data for the variables that compose the index
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.
