Triple bottom line

Definition

Triple bottom line (TBL) is a framework for measuring organizational success through three dimensions: social, environmental, and financial performance. It encourages businesses to give equal priority to people, planet, and profit in their decision-making processes.

5 Must Know Facts For Your Next Test

1. The Triple Bottom Line emphasizes sustainability by focusing on social equity, environmental health, and economic prosperity.
2. John Elkington coined the term 'Triple Bottom Line' in the mid-1990s to broaden the focus of business performance beyond financial metrics.
3. Social performance in TBL assesses a company's contributions to community well-being and fair labor practices.
4. Environmental performance measures how well a company manages natural resources and minimizes its ecological footprint.
5. Economic performance in TBL still includes traditional financial metrics but also considers long-term viability and ethical financial practices.

Review Questions

• What are the three dimensions of the Triple Bottom Line?
• How does the Triple Bottom Line framework contribute to sustainability?
• Who coined the term 'Triple Bottom Line' and why is it significant?

Related terms

Sustainability Reporting:

A process where companies disclose information about their environmental, social, and governance (ESG) activities and impacts.

Corporate Social Responsibility (CSR):

A business model where companies integrate social and environmental concerns into their operations and interactions with stakeholders.

Environmental Impact Assessment (EIA): A procedure used to evaluate the potential environmental effects of a proposed project or development before decisions are made.