Globally, for decades, it has become almost a ritual for corporations to produce their financial performance reporting to their stakeholder annually, though in a view of sustainable growth of the organizations, financial reporting alone would not suffice the overall social and environmental performance. It is therefore; ‘Triple Bottom Line’ reporting becoming increasingly accepted way for businesses to demonstrate their strategies for sustainable growth.
What is Triple Bottom Line?
“Reflection of company’s overall economic, social and environmental performances”
Triple Bottom Line emphasis financial profitability, environmental integrity and social equity. It is a form of reporting that takes into account the impact a business has in terms of social and environmental values along with financial returns. Whereas traditional models were all about profit, profit and more profits.
± The social bottom line refers to how an organization approach issues such as ethnic and gender diversity, working hours, wages, staff security and its contribution to the community services.
± The environmental bottom line refers to the impact of the company’s products or operations on the environment, along with their approaches to deal with the nature of emission and waste generated.
± The economic bottom line emphasis not only to the financial performances but also to the philosophies behind company’s business strategies.
The below Figure-1, demonstrates the relationship between superior social, environmental and economic performances. The balancing the Triple Bottom Line is very important as without all three aspects of Triple Bottom Line- it would only be bearable, equitable or viable and when all three spheres intersects, the sustainable growth is achieved.
Benefits of Triple Bottom Line
Triple Bottom Line serves as a conceptual framework to help organizations shape their own socially responsible approaches and it bring numerous opportunities and benefits on its full implementation. From the organization’s perspective, there are three major benefits of Triple Bottom Line:
± Increased Revenue and Market Share
± Increased Employee Retention Rate
± Increased Community and Environmental Support
“Triple Bottom Line emphasis financial profitability, environmental integrity and social equity.
Another holistic benefit of triple bottom line is to share the importance of the good social conditions and preservation of the environment, as a society becomes richer its people develop an increasing desire for a clean environment and protected wildlife, and both the willingness and financial ability to contribute to this and to a compassionate society.
Triple Bottom Line is the most structured framework for the organization to fullfill their social responsibilities.