Triple Bottom Line

Description of Triple Bottom Line. Explanation.

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Definition Triple Bottom Line. Description.

Triple Bottom Line (TBL) is a term coined in 1994 by John Elkington. TBL is used to indicate that the performance of companies should not only be reported and judged on purely financial considerations, but also on Environmental Responsibility and Social Responsibility.

The 3 Bottom lines: People, Planet and Profit

People (Human Capital) pertains to fair and beneficial business practices toward labor and the community and region in which a corporation conducts its business.
Planet (Natural Capital) refers to sustainable environmental practices. A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and curtail environmental impact.
Profit (Financial Capital) is the bottom line shared by all commerce, conscientious or not. In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the economic benefit enjoyed by the host society. It is the lasting economic impact the organization has on its economic environment. This is often confused to be limited to the internal profit made by a company or organization. Therefore, a TBL approach cannot be interpreted as traditional corporate accounting plus social and environmental impact.

The concept of TBL demands that a company's responsibility should be to all Stakeholders rather than only to the Shareholders.

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End of description Triple Bottom Line. An explanation.