Triple Bottom Line (TBL) Do you think that Triple Bottom Line reporting can actually lead to separate ‘bottom line’ for social, environment and economic performance of an entity? Explain your view! Presented by: Abrao Soares & Cirilo Mendonca BUSN3043 Government Sustainability & Ethics Aim of Presentation • To define triple bottom line (TBL) • To understand the variation of the triple bottom line measurements • To define who uses TBL BUSN3043 Government Sustainability & Ethics Define TBL • TBL was first coined in 1994 by John Elkington, the founder of a British consultancy called sustainability • TBL consists of 3Ps: Profit, People and Planet • Company should prepare 3 bottom line reporting: - Traditional measure: Profit & Loss accounts - Social measure: People accounts - Environment measure: Planet accounts BUSN3043 Government Sustainability & Ethics TBL Measurements BUSN3043 Government Sustainability & Ethics Economic Measures Economic measures • Economic variables ought to be variables that deal with the bottom line and the flow of money. It could look at income or expenditures, taxes, business climate factors, employment and business factors. Examples • • • • • • Personal income Cost of underemployment Job growth Employment distribution by sector Percentage of firms in each sector Revenue by sector contributing to gross state product BUSN3043 Government Sustainability & Ethics Social Measures Social measures • Social variables refer to social dimensions of a community of region and could include measurement of education, equity and access to social resources, health and well-being, quality of life, and social capital. Examples • • • • • • • • Unemployment rate Female labour force participation rate Median household income Relative poverty Percentage of population with a post-secondary degree Average commute time Violent crimes per capita Health-adjusted life expectancy BUSN3043 Government Sustainability & Ethics Environment Measures Environment measures • Environmental variable should be represent measurements of natural resources and reflect potential influences to its viability. Examples • • • • • • • • • Sulphur dioxide concentration Concentration of nitrogen oxides Selected priority pollutants Excessive nutrients Electricity consumption Fossil fuel consumption Solid waste management Hazardous waste management Change in land used due to business expansion BUSN3043 Government Sustainability & Ethics Who uses TBL? Business • The TBL and its core value of sustainability have become compelling in the business world due to accumulating unreliable evidence of greater long-term profitability. Examples • PT. Musim Mas • McDonald BUSN3043 Government Sustainability & Ethics Who uses TBL? (cont.) Non-for-profit Many non profit org. have adopted TBL & partnered with private firms to address broad sustainability issues that mutual stakeholders. Company recognised that align with non profit organisation make good business sense particularly those non profit with goal of economic propensity, social well being and environmental protection. - Ford foundation - Nike foundation BUSN3043 Government Sustainability & Ethics Who uses TBL? (cont.) Government State and regional and local government are increasingly adopting the TBL and analogous sustainability assessment framework as decision making and performance monitoring tools. - Government need Regulate the busines http://www.youtube.com/watch?v=7BRGj0DwYwA BUSN3043 Government Sustainability & Ethics Can TBL lead to different separate bottom line? Can TBL (profit, people, planet account) can be achieved at same time? BUSN3043 Government Sustainability & Ethics TBL Challenges ? • Economic prosperity -downward prices and wages increase lead wasteful consumption in developed countries. Low price leading to exploitation of labor in third world Environmental sustainability - Environmental regulation enforcement - Non renewable resources exploration Social equity - Technological improvement and automation reducing local employment opportunity. conclusion TBL can achieved if • Business disclosed its CSR • Government put strong sustainability regulation • Consumers consume resources properly (less waste)
