Has the Triple Bottom Line Failed, Mr. Elkington?
“No” would be my one-word answer to the editors’ question. Indeed, the very fact that the editorial team of the International Global Compact Yearbook decided to commission this essay – some 15 years after the genesis of the “triple bottom line” agenda – itself speaks volumes. Success and failure are relative, of course, reflecting initial expectations and ambitions. In coining terms like “environmental excellence” (1984), “green consumer” (1986), or “triple bottom line” (1994), I was simply trying to help us all expand our minds for new possibilities. The second of these terms set a high bar, with our book The Green Consumer Guide selling something like one million copies worldwide, but even though Cannibals with Forks – the book in which I introduced the triple bottom line concept to a wider world – sold 95 percent fewer copies, I consider it to have had an equal, or even greater, impact.
But what metrics or benchmarks of success should we use here? For me, one key consideration is this: Whatever business language we now use, the idea that corporations and financial institutions need to track and manage value creation (or destruction) in multiple dimensions is no longer as alien as it once was. In that sense, at least, the triple bottom line concept has helped open-out business, financial, and governmental horizons.
Just for a moment, recall what the business agenda was like in this sector back in 1994. The leading edge of thinking focussed on what was called eco-efficiency – a term coined by the World Business Council for Sustainable Development two years prior. The idea here was that business should simultaneously pursue a reduction in the material- and energy intensity of goods or services, alongside greater durability, improved recyclability, and maximum use of renewable resources. All perfectly splendid and – as the recent energy crunch underscored – there is a great deal still to be done on those fronts.
But my motivation in coming up with the triple bottom line reflected a very personal frustration that eco-efficiency – at the time often presented as shorthand for business sustainability – missed a trick (some would say deliberately so) by focussing on the interplay between financial and environmental factors. In the process, it created (or aggravated) potential blind spots in business thinking, ignoring at least two key components of business and market performance: the broader economic and social dimensions of value creation.
At a time when a surprising number of otherwise sane American business leaders chose to see sustainable development as akin to socialism – even communism – this was a gamble: Perhaps we risked confirming their fears and forcing a general retreat. But I had already had a very positive response to a paper I had produced for the California Management Review in 1994, which spotlighted the potential for what I called “win-win-win” strategies and solutions. The triple bottom line language was an attempt to communicate this wider sustainability challenge to business people; the rather more populist version I came up with in 1995 – “People, Planet, Profit” – helped the concept go viral, particularly when Shell used it as the title of its first-ever sustainability report in 1997.
Before long, various new institutions were adopting triple bottom line frameworks in their work, among them the Dow Jones Sustainability Indexes (where, to disclose an interest, I have been on the Advisory Board since the outset) and the Global Reporting Initiative (where I helped shift the original concept of environmental reporting to a triple bottom line focus – and now serve as a member of the Board). The concept also spurred the establishment of many other organizations, among them Robert Rubenstein’s TBLI Group, which organizes major conferences on related themes for the financial world.
Over time, in addition to Shell, we have seen a growing array of companies building triple bottom line thinking into their values and strategies – with Denmark’s Novo Nordisk integrating it into its very chartering. In turn, the concept spurred the evolution and spread of related terms, including “double bottom line” (financial and social), “quadruple bottom line” (with the fourth dimension being anything from ethics to governance), the 3-D agenda of “environment, society, and governance” (ESG), and Jed Emerson’s concept of “blended value”. Whether in this last formulation or the World Resources Institute’s concept of the “next bottom line”, the quest was on for ways of accounting for and managing multi-dimensional value creation,
Before long, literally thousands of companies were producing annual reports that embraced the triple bottom line approach, to some degree. Over time, these have evolved into a level of sophistication that would have been inconceivable a decade earlier. In parallel, socially responsible investment firms – and even mainstream financial institutions – began to open out their thinking and metrics, though the pace of development here has often been frustratingly slow. You might even argue that this new line of business thinking helped pave the way for later initiatives like the UN Global Compact.
Academics and researchers have piled in behind, studying the different approaches. Triple bottom line case studies have been written and books published that critically evaluate progress to date. Among the latter, a key contribution was The Triple Bottom Line: Does it All Add Up? – Assessing the Sustainability of Business and CSR, published by Earthscan (London, UK) in 2004. As the publishers explained, it reviewed what the concept had “already achieved by stimulating change and bringing business to appreciate the importance and benefits of corporate social responsibility (CSR) and good environmental performance.” The contributors then explored what still needed to be done through regulation and legislation.
Overall, I am not unhappy with progress on the triple bottom line agenda, which I see gaining a new lease on life at the moment, particularly in some of the BRIC countries. But before I rest my case, I should underscore the fact that Cannibals with Forks was one of a trilogy, followed in 2001 by The Chrysalis Economy and in 2008 by The Power of Unreasonable People.
The second volume went on to say that corporate responsibility was a necessary – but not sufficient – condition of sustainable development, with a major economic transformation likely during the second decade of the new century. The third volume explores the work of some of the potentially disruptive innovators and entrepreneurs who are evolving the new mindsets, technologies, and business models that will underpin any sustainability transition. This work was taken further in our 2009 report, The Phoenix Economy: 50 Pioneers in Social Innovation. So I see the triple bottom line as a work in progress – not a museum exhibit – and as a continuing challenge to the thinking of decision-takers and policymakers. Watch this space.
John Elkington is Co-Founder of SustainAbility and as an author he coined the term “triple bottom line” in 1994.