For a while now, the term Corporate Social Responsibility has become quite common. However, companies should take into account the following aspects:
- Economical, since the shareholders expect to obtain financial results with the minimum risk.
- Social, according to what the society requests, more job security, better working conditions, among other concerns.
- Environmental, requests to control the impact of business activity and implement the circular economy within it.
All this leads us to believe that a company will survive only if it is economically viable, socially responsible and environmentally sustainable. Becoming in this way the three parties of the Triple Bottom Line, denominated by John Elkington in his work Cannibals with Forks in 1997, where he details the need to attend to the diverse groups of stakeholders through the Triple Bottom Line (economic, social and environmental).
Various factors have led to CSR being implemented in companies, such as society’s awareness in light of the many social scandals, whether for business reasons such as improving work conditions, reducing waste, or lowering energy consumption, among others.
It is well known that there are currently different types of CSR standards, norms and codes to enable companies to implement these measures and thus contribute to social and environmental improvement, while maintaining a constant dialogue with their stakeholders.
It is understandable that for every company the economic aspect is primordial, since the company’s existence depends on it. Nevertheless, it is important to emphasize the importance of the employees for the achievement of this objective, for if they feel part of the organization, it is more likely that by willingness, – independently of the salary -, they will decide to collaborate, support and be more productive with their tasks. Therefore, the Triple Bottom Line values these three concepts, people, planet and profit.
Triple Bottom Line
Although the concept of the Triple Bottom Line emerged in 1997, it was not until 2008 with the financial crisis and climate change that ethics and Corporate Social Responsibility began to be taken into account. It was then that companies began to view “doing business as usual” from a different perspective.
For companies, having to change their practices to minimize risk and combat climate change requires a lot of time and money, but it is of utmost importance to invest in sustainability to solve climate problems. A study by MIT revealed that the companies that implemented CSR as their philosophy were the ones that obtained the most benefits that year.
The success of the Triple Bottom Line depends on talented employees who know how to translate this triple bottom line from theory to reality. They must also possess knowledge such as accounting and economics, environmental sciences, and have leadership skills and the ability to make strategic business decisions.
Is it important to measure the Triple Bottom Line?
Explaining the results of the activities carried out by the company is interesting given that it allows all its stakeholders to analyse and understand the benefits generated by these activities on an economic, social and environmental level. This allows the company to improve its reputation, the level of commitment of its employees and to obtain support from public institutions as agents of good practice.
Finally, it is important to measure these activities, as this provides evidence of both good and bad or regular practices. This new approach in the companies’ philosophy, generates confidence and reinforces the value chain, however, there are two strands of thought regarding this new practice, those who think that reducing the environmental impact and improving the quality of work of their employees is a way of “washing their image” or greenwhasing. The other strand is based on the belief that this approach will, through raising awareness among companies, produce a greater impact on society.