An MBA’s

Guide to the

Triple
Bottom
Line
An MBA’s Guide to the Triple Bottom Line

Sustainability What is the Triple

for People, Planet Bottom Line?
and Profits Triple bottom line refers to the last line on a
balance sheet that measures profit or loss.
Sustainability, when referring to TBL, describes
Profitability and return on investment are not an organization that respects the needs of
the only measures of success for today’s en- others (community, general public, employees)
terprises. Simply balancing the cost of doing along with its own, which results in strength-
business against revenue boils success down ened relationships between the enterprise
to a single metric that leaves out other key and its stakeholders.
components of a contemporary organization’s
balance sheet. The TBL measures three areas of impact:

Considering social and environmental respon- • People: Measures a company’s social

sibility in bottom-line calculations is a more responsibility, both in the workplace and
holistic way to measure an enterprise’s impact community. TBL enterprises may establish
locally and globally. Actions that are viewed initiatives to assist underprivileged people
as socially responsible generate public good in their community through developmental
will, enhance image and reputation, attract programs or other economic assistance; or
talented employees, and provide competitive help their own staff enhance new career,
advantage, all of which are essential to long- life, or wellness skills, or they may decide
term success of the enterprise. to boycott vendors abroad that rely on
child labor. The people goals are interde-
The United Nations introduced the framework pendent with the goals of the enterprise.
for socially responsible organizations in 1986 • Planet: Establishes business practices
with “Declaration on the Right to Develop- that reduce an enterprise’s environmental
ment at 25.” These guidelines advocate the footprint. This can include employing pro-
development of all people to “… determine duction processes to reduce waste, using
their political status and to pursue their eco- recycled materials whenever possible,
nomic, social and cultural development.” The or educating staff on the importance of
guidelines also promote greater awareness recycling and hiring recycling services for
of environmental impact, along with the free corporate offices.
participation in business and fair and mean- • Profits: Refers to traditional cost account-
ingful distribution of the proceeds. ing reporting.

In 1997, John Elkington, author, speaker, and Elkington’s triple bottom line has changed the
world authority on sustainable organizations, way companies manage operations and mea-
refined the framework in his book Cannibals sure effectiveness. Organizations of all types
with Forks: Triple Bottom Line of 21st Century — publically traded, privately held, health care
Business. Elkington encouraged a broader organizations and nonprofits — that seek to
approach to tracking organizational success, establish sustainability, now understand the
establishing the triple bottom line (TBL). benefits to economic, environmental and so-
cial aspects.

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An MBA’s Guide to the Triple Bottom Line

TBL is a cost-accounting measure, so CFOs,

controllers and accounting directors are respon-
Who is Responsible for sible for tracking measurements and reporting
results. Because the planet and people aspects
the Triple Bottom Line? of TBL may not fall within traditional cost-ac-
counting measures, accountants may have to
TBL requires company-wide adoption to be use another measurement for success, such as
successful. However, specific employees may the percentage of individual, company or com-
have more direct involvement in establishing munity acceptance.
the specific goals, measurements, and steps
to achieve sustainability. Departments that can most affect sustainability
must assess their responsibilities, determine
Executives and company directors establish which actions impact TBL, and brainstorm
organizational goals, suggest benchmarks to about how improving operations can optimize
measure TBL success, and determine how TBL results. These activities may include:
profits will balance with people and the plan-
et. As such, these leaders may ask themselves • Manufacturing
the following questions: • Facilities
• Community outreach
• Should profits, people, and planet be • Engineering
weighted equally, or should the pursuit of • Purchasing
profits be the enterprise’s highest priority?
• Should leaders only consider people and Long-term sustainability requires that each
planet initiatives that support profitable employee be as invested in social outcomes
initiatives? as profitability, which means they must
understand TBL and how they can contribute
to sustainability goals.

Employing the Triple

Bottom Line
After determining overall goals and level of
involvement, a closed-loop management
system model can help teams implement the
pillars of the TBL throughout the organization
by decreasing the exchange of resources
with the outside world. Using this model can
assist with building initiatives focused on goals,
and supports feedback across many business
units during development and beyond
implementation.

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An MBA’s Guide to the Triple Bottom Line

To begin employing the TBL, follow these five

phases of the closed-loop system:

1. Establishment of goals: In addition to initial

Establishment of Goals deliberations about goals, implementation
• Identify internal resources/tools teams identify internal resources and tools
• Create Mission Statement that can be used to support TBL initiatives.
and Code of Ethics This phase involves creation of a mission
• SWOT Analysis statement and code of ethics. The teams may
choose to perform a SWOT analysis to identi-
fy internal strengths, weaknesses, opportuni-
ties, and threats that can affect
TBL implementation.
Strategy Development
• Identify pillar objectives 2. Strategy development: During this phase,
• Identify departments that leaders and stakeholders identify the objec-
advance TBL initiatives tives of each pillar, identify the departments
• Key performance Indicators that will be directly involved in advancing TBL
initiatives, and establish key performance
indicators as they shape the initiatives for the
enterprise. The team may use flow charts to
identify how the procedures work within and
Implementation
between business units.
• Apply strategy
• Identify additional procedures
3. Implementation: Apply strategy to opera-
tions and identify additional procedures to
ensure quality management and process
improvement, as well as the steps to achieve
Monitoring the goals established for the business units
• Monitoring Outcomes and enterprise.

4. Monitoring: As soon as implementation be-

gins, managers closely monitor each step to
evaluate the outcomes from the new proce-
dures and how they affect the business and
Optimization staff.
• Establish processes
5. Optimization: Establish processes to evalu-
ate and improve outcomes.

What are the benefits of using such a model?

Closed-loop systems can expose procedural
shortcomings early in the process of implement-
ing TBL. This allows for quick corrections to be
made during the early phases of the strategy.

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An MBA’s Guide to the Triple Bottom Line

Incorporating Sustainability
Triple Bottom Line and Operational
into a Company Considerations
Mission Statement Sustainability addresses diverse business
concerns, including the environment,
A mission statement that effectively staff, consumer protection, and business
supports the triple bottom line sets the behaviors that can affect a number of
objectives and purpose for the entire social issues. It also follows that developing
organization. The mission statement should processes that weave the interests of
align with the established corporate culture people, planet, and profits into initiatives
by clearly and concisely communicating takes time, effort, and resources.
each of the three pillars. Further, the
mission statement should reinforce the When considering the implementation of
foundation of social responsibility and sustainability processes, some key factors
environmental support for the enterprise that leaders should weigh include
and serve as a guideline for future action the following:
and decision-making.
• Resource availability, projected
Steps for developing an effective mission effort, and return on investment
statement that supports the TBL to inform an enterprise’s level of
may include: involvement. Traditional business
analysis is valuable, but leaders
1. Establish goals for each pillar of the TBL should also consider the value of a
(people, planet and profits). healthy community and sustainable
2. Describe how the enterprise environmental resources in determining
reaches each goal. specific actions.
3. Explain who benefits when goals are • Actions that fulfill the social
reached, including those outside of justice arm of TBL. If an enterprise
the organization, employees and the treats employees fairly and provides
organization itself. reasonable wages, advancement,
4. Clarify the interdependency of each of educational opportunities and benefits,
the pillars and how the sustainability of will those fulfill the people dimension of
people, planet, and profits contributes TBL? Or, is community outreach on local,
to the vitality of the organization, staff, national, or global levels necessary?
and local and global communities. • Whether preference should be given
to vendors who’ve adopted TBL
sustainability. Should companies
choose to do business with vendors
who conduct business in a way that’s
contrary to TBL values? If they only
choose companies that embrace similar
values, how will it impact costs?

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An MBA’s Guide to the Triple Bottom Line

Corporate Social Corporate Social

Responsibility (CSR) Responsibility to
and Employee Communities
Enrichment Some TBL organizations may decide that inter-
nal social responsibility and employee enrich-
Corporate social responsibility in a TBL ment fulfill the people pillar, but for others, the
enterprise refers to a company’s obligations community at large is an important component.
to the public; it is a self-regulating endeavor For these enterprises, employing corporate so-
that measures the positive impact its social cial responsibility in the form of community out-
and environmental initiatives have on reach is a must. And with the impact of social
people and the planet. media and the Internet in general, the commu-
nity at large often means the global community.
TBL organizations employ mission
statements that place importance on For those companies looking to implement an
social responsibility to people and our impactful CSR program, it is important to re-
planet. While the benefits to social groups member that CSR doesn’t just serve the needs
outside of the business are emphasized, of the community. In fact, successful TBL or-
sustainability applies equal importance ganizations have recognized that employing
to the benefits enjoyed by the enterprise corporate social responsibility not only benefits
and its employees. In fact, employee global communities, it also benefits the organi-
enrichment is vital for organizations zation’s stakeholders (creditors, vendors, sup-
interested in sustainability. The organization pliers, employees, and anyone with a “stake” in
must commit to enforcing its mission both the company’s success).
internally and externally.

How can an organization place high In his article “Why CSR? The Benefits of Cor-
importance on employee enrichment? porate Social Responsibility Will Move You
Recognition programs, in-house To Act,” Devin Thorpe, Forbes contributor,
education and tuition assistance, as well relays his conversations with several executives
as opportunities to advance all promote who explained how their respective companies
employee loyalty and longevity, reducing have benefitted both themselves and their
the chances that employees will depart. global stakeholders through various forms of
In addition, the belief that their employer community outreach.
embraces social values and is working
toward the greater good reinforces positive Several extremely successful global enterprises,
feelings about the employer, workplace, and such as Amazon and TOMS have employed
themselves. These sentiments can result in well-known CSR initiatives that have helped not
greater dedication and productivity. only their global stakeholders but also their
own profits. Programs such as these focus on
donating money and goods to those in need,
but that’s not the only way to give back.

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An MBA’s Guide to the Triple Bottom Line

Thorpe spoke with John G. Taft of RBC • Employee satisfaction can be higher with
Wealth Management, a personal wealth sustainable organizations, which can result
management firm that has employed the in greater motivation and loyalty.
RBC Blue Water Project for the last 10
years. This program not only pledges mil- Ultimately, making the decision to become a
lions of dollars per year to help protect water sustainable organization provides a method to
around the world, it encourages RBC employ- measure an enterprise’s influence on people,
ees to get involved through RBC Blue Water planet and profits, identifying its true impact on
Makeovers. local and global community.

Transforming an
Organization with TBL
Sustainability has become a principle of
fundamentally smart management because
it considers the social, economic and
environmental impacts of business decisions
to maintain the long-term health of
the enterprise.

Leaders who want to persuade executives

to adopt the TBL system and sustainability
should emphasize that today’s organization is
responsible to a larger community. In addi-
tion to the return on investment that comes
from contributing to people and the planet,
engaging in corporate social responsibility
may be paid back to the enterprise in differ-
ent ways, such as:

• Promoting a greater connection to all en-

terprise stakeholders, inside and outside
the organization through the sustainabili-
ty model.
• Sourcing new vendors to fulfill the planet
initiative can lead to preserving natural
resources, and may even lead to cost
savings.
• Social goodwill can lead to greater public
recognition and new revenue.

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An MBA’s Guide to the Triple Bottom Line

The University of experience for students to discuss how busi-

ness principles apply to their own real world

Scranton Online experiences.

• Instructor Interaction: Students seeking
individual attention or feedback from
MBA Program instructors will find engaged faculty
members available through phone, e-mail,
The University of Scranton’s online Master discussion forums, and more.
of Business Administration programs pre- • Student Lounge: Looking for a place to
pares leaders to guide their organizations into network with other online students, ask
a more socially conscious and ethical world. questions, find helpful resources that oth-
While countless MBA prgrams focus solely on er students have used, or just make a few
the application of business practices, Scranton friends? The Student Lounge discussion
provides a refreshing addition to business forum can help!
education through the integration of the Jesuit • Personal Support Center: Students who
belief in social justice and environmental re- have questions about the online environ-
sponsibility. ment or are experiencing technical difficul-
ties can find help in the Personal Support
Scranton’s online MBA program provides Center, available 24/7.
students with the opportunity to examine the
issues necessary to implement a sustainable
model for enterprises of all types, includ- Would you like to learn more about the
ing private, publically traded, health care, principles of TBL, sustainability, social justice,
non-profit and more. environmental responsibility and how they
contribute to a successful enterprise? Consider
Students enrolled in the online MBA program the online MBA program at the University
become a part of Scranton’s community of Scranton.
through several means of connectivity:

• Weekly Class Forum Discussions: I Want To Learn More!

Through required weekly discussion forum
participation, students have the opportu-
nity to network with other change-leaders
and solve business problems with fellow
students. These discussions encourage
collaboration on ideas presented during
class sessions and create a classroom-like