The Triple Bottom Line, or otherwise known as TBL or 3BL, is a three part business framework. These three parts consist of social, environmental and financial performance, and the framework is used as an evaluation tool for organizations to monitor their performance and impact on their surroundings.
The term Triple Bottom Line was first used in 1994 by John Elkington, an entrepreneur and author of the 1997 book Cannibals With Forks: The Triple Bottom Line Of 21st Century Business. Triple Bottom Line is particularly associated with the need for sustainable development, as it takes into consideration not just the financial performance of an organization but also social and environmental performances. The phrase 'People, Planet and Profit' is likewise associated with this three-pronged approach, and has come to define good business practice in an era where Corporate Social Responsibility, climate change and fair trade are high-profile topics.
TBL stemmed from the difficulties in measuring sustainability in business. While traditional accounting methods could clearly be used to measure financial performance, the TBL framework provided a new approach to incorporate other increasingly important indicators. In measuring environmental performance, indicators such as fossil fuel consumption, hazardous waste management and change in land use are considered. In social performance, factors such as unemployment rates, life expectancy and the percentage of women in the labor force are among the areas to be evaluated.
One of the primary advantages of adopting the TBL is the symbiotic relationship between social responsibility, engagement and profitability. Research suggests that by creating a framework which looks beyond profit as a measure of success, long-term benefits in high levels of employee engagement, a greater capacity for innovation and increased trust in an organization's brand can be reaped. That these in turn then lead to greater profits is hailed by supporters of TBL as justification enough to adhere to the three part framework encouraged by the concept.
Despite this new framework offered by the TBL, it is argued that TBLs are difficult to measure due to their lack of common unit of measurement. While financial performance can be measured in dollars or pounds, there is debate as to how best to measure environmental health or social capital and the inability of the framework to allow for comparison between Bottom Lines. Criticism also remains that the above-mentioned advantages of TBL are based purely on anecdotal evidence, and it cannot be proven that increased social and environmental responsibility in turn leads to increased profitability.