Thinking Long-Term: 8 Tips To Ensure A Sustainable Triple Bottom Line
Traditionally, business accounting and finance focused on evaluating profit and loss by writing down the net income on the bottom line. However, in the 20th century, this thinking changed as economists and finance experts started reimagining the concept of profitability. While the bottom line usually refers to the profit made by your company, the triple bottom line (TBL) deals with two usually-neglected factors, i.e., environment and society. Let’s understand how the TBL model benefits your company and how you can implement it right.
Sustainability has become important for businesses in the 21st century, and companies cannot succeed if they keep ignoring their impact on the environment. Modern-day enterprises must focus on the three P’s: profit, planet, and people. Ignoring the last two P’s won’t help you become profitable in today’s business environment when people’s purchasing decisions are influenced by whether your company’s ethical or not. So, how does the TBL help your company grow? Some advantages include the following:
- Better global company image and reputation
- Promotes creativity and innovation among employees
- Saves the environment by switching to eco-friendly policies and solutions
- Retains employees (over one-third of them are leaving eco-harming employers)
- Attracts more customers (two-thirds of them are willing to pay more for sustainable products)
Here’s an example to understand how TBL works. Imagine a company recruiting many disabled people and tasking them with recycling things. Another example: A company hires ex-convicts to package its products with plant-based materials. Another example: A company allows workers to stay at home and work, thereby reducing carbon emissions caused by commuting. We will discuss more examples in this article. First, let’s discuss several methods to ensure a sustainable triple bottom line in your organization:
- Adopt the right skills
Learning how to create a sustainable economy isn’t difficult when you are leveraging online courses to enhance your knowledge. An online course can help one acquire the sustainable finance skills one needs to develop eco-friendly financial strategies. These courses show you how business managers can pursue sustainable initiatives to grow a company’s profitability. Managers, executives, and even policymakers can benefit from these short courses and create a sustainable triple bottom line.
- Simplify your message
It’s important to simplify your message and make it your organization’s heartbeat to motivate your workforce to become more eco-friendly. Some experts call it the “action point” as it helps to make a long-term strategy for your organization. Stay attached to your message and let it dictate how you achieve sustainability. Just remember that your company’s message must be clear and short. An easy-to-remember message with a clear CTA can inspire your workers properly.
- Be clear with your values
Companies should focus on defining their values and clarifying what they stand for before they can ensure a sustainable triple bottom line. What’s your purpose as an organization? Which rules and principles are you following? How do you measure the effectiveness of your strategies?
Remember that sustainability isn’t about blindly following what’s popular right now, but you must align your goals with your business objectives. Clarify your company’s vision, elucidate the rules you follow, and the problems you wish to solve. That’s how you can achieve sustainability successfully.
- Work with nature
Work with nature, not against it. This mantra teaches companies how they can do some face-saving and protect their reputation online by preserving nature. For instance, we have the science of green architecture, in which buildings are designed to keep nature intact. You can also find nature-based methods to perform business operations. Even some multinational companies are investing in these ideas to become more profitable by using natural resources to cut costs.
- Find new opportunities
Will the green economy make people lose their jobs? This question makes some startups wary of a TBL-based approach. However, experts believe the green economy will create 24 million jobs by 2030 alone worldwide. Business managers can develop innovative ways to make money, give back to the people (corporate social responsibility), and refrain from harming the planet. In other words, companies can create new job roles that don’t exist today, thereby employing those who don’t have a job right now. For instance, the pandemic inspired people to revamp their business models and find creative solutions to satisfy customers without threatening the environment.
- Unify your employees
Any long-term triple-bottom-lined-based strategy for attaining sustainability should involve employees’ cooperation to become successful. You require team members with diversified strengths to advance the company’s TBL goals. Unify them on the company’s action points and business objectives. Unless your employees commit to the organization’s central message, progress won’t be achieved easily. Therefore, obtain your workforce’s cooperation by inspiring them with your mission statement.
- Learn to adapt
Never neglect the local context and refrain from using green ideas that harm the native population. For instance, experts can design a solar-powered groundwater-pumping machine. But this machine can lead to groundwater resources depleting quickly and hurting local agriculture. Learn how to adapt to this context and come up with local-friendly ideas. Introduce schemes that discourage a person from wasting natural resources. That’s how your company can bolster a sustainable TBL.
For example, people in India devised a system in which the state buys excess power generated by solar-powered pumps. This buy-back scheme profits the state and prevents local farmers from drawing more water than needed. Here’s how this arrangement benefits the three P’s we stated:
- The state makes money (profit)
- Groundwater resources are conserved (planet)
- Farmers sell excess power to generate income (people)
- Learn from examples
We have explained that companies can learn from examples to understand how to improve their TBL and achieve sustainability. Business owners realize that sustainability has become, if not the single most important, then one of the most crucial benchmarks of success in the industry. So, you can:
- Learn from Apple; it claimed to have reached 100% green energy in 2018
- Learn from DHL; the guys there wish to reduce their carbon emissions to 0% by 2050
- Learn from Unilever; all of its packaging is expected to become reusable and recyclable by 2025.
- Learn from Allergen; it started to monitor its water usage in the 1990s and reduced it by a surprising 12% by 2010
- Learn from Ikea; this Swedish brand tops the list by planning to go green, shrink emissions, get recycled materials, utilize sustainable cotton, and buy back their old products.
Elkington – the alleged originator of TBL – has been quoted in an article saying that this term isn’t about accounting only; it’s mainly about the future of capitalism and its impact on nature. He wanted to incite deeper thinking about capitalism and provoke business leaders and how it’s affecting humanity. So, this article explains how companies can ensure the implementation of a sustainable TBL today. Managers should clarify their values, simplify their message, and learn from examples. Work with nature, not against it. A company must discover greener business opportunities and unify its workforce to become eco-friendly. Pursue online courses to teach yourself green finance skills to implement the triple bottom line.