Description

John Elkington (a business writer and founder of the management consultancy SustainAbility) coined the concept of TBL in 1994. Elkington argued that the conventional way of measuring the corporate success – is its net income, i.e., the “bottom line” of its profit and loss account – does not provide a holistic view of an organisation’s actual value and overall performance. In the latter case, an organisation (multinational or SME) can well be financially successful yet may harm the social or ecological environment in which it is operates. Lack of focus on human capital and planet will hold back organisational development and have a severe impact on its success. In such cases, organisations truly cannot account for the full cost of doing business.

It is thus advocated that to ensure the pinnacle of an organisation’s prosperity and attainment, it should expand its ways of measuring corporate performance by adding two more “bottom lines” to the original one. Instead of simply measuring their economic (i.e., net income) bottom line, organisations should also focus and report on a social bottom line, i.e., on their engagement towards welfare endeavours and social equity and inclusion, as well as on an environmental bottom line, i.e., on their ecological impact including green innovation and carbon neutrality. Ensuring the adoption, implementation, and diffusion of TBL concept at its core – is categorically a clear indicator of how well an organisation is meeting its Sustainable Development Goals (SDGs). TBL is not about disregarding the organisational profits or its financial prosperity, rather it encompasses supplementary metrics into an organisation’s overall health picture. An organisation must be financially healthy and stable, and equally successful for people (internal and external stakeholders) and planet to thrive. All three (profit, people and planet) must work in tandem for an organisation to fulfil its TBL commitments.