Triple Bottom Line
With so many recent GPI happenings lately, we haven’t had a true blog in a while. So we’re back in business. And speaking of business, a common question raised is how Business can follow similar GPI efforts. Well, they can (and are) through what’s called the Triple Bottom Line.
The first step in understanding “Triple Bottom Line” strategy (TBL) is to consider the meaning of “true cost accounting”. In short, true cost accounting is the practice of logging and publishing all cost-benefit outcomes—financial, environmental and social—of an organization’s business activities. Typically, non-true cost accounting methods overlook environmental and social costs.
The three pillars of TBL are profit, people, and planet. This relatively young business strategy urges corporations to retreat from their traditional and narrow goals of profit maximization and adopt two new objectives: social and environmental responsibility. Three bottom lines are created, but which is the real bottom line? Don’t worry; everyone’s asking this question. Most management gurus say self-sufficiency trumps all, followed by people, then the environment.
Defining this concept is the easy part. The real puzzle is determining the best way to measure an organization’s TBL behavior. The local favorite, the Genuine Progress Indicator or GPI, is one of the most popular and academically supported for government—but you already knew this. The GPI works great for a regional economy, but a small business or large corporation would be best off assessing state and federal regulations, then creating their own scorecard for success.
According to the Center for Creative Leadership, the top three advantages of the TBL approach are increased revenue and market share, increased employee retention, and increased community support. You can refer to the experts on how this plays out, but here’s the take-away: Markets are allowing a number of organizations to adopt pseudo-TBL business models, and often times requiring it.
There are many TBL companies thriving in Maryland. Consider Busboys and Poets, a restaurant in Hyattsville, or these environmentally friendly attorneys in Bowie. Not convinced? Visit the Maryland Green Registry where members have collectively saved $65 million annually by sticking to environmental best management practices. Essentially, the Green Registry promotes a balanced diet for Maryland businesses, offering resources and operational advice to help organizations set and meet their own sustainability goals. The annual Green Registry Leadership Awards applauds the best-performing Maryland businesses in terms of sustainability practices, commitments and results.
Government is also recognizing the value of TBL tactics. As you may have gathered from toying with the GPI Calculator, volunteerism is a valuable part of the community (worth $3.3B annually in Maryland). Governor Martin O’Malley has recognized this by promoting the Stronger Together campaign and encouraging citizens to give more time in their local communities.
And if you think that TBL and volunteerism is for kids, consider this: If every adult in Maryland volunteered one extra hour this year, the GPI would increase by almost $100M. How’s that for an allowance?
Echoing the TBL mantra “profit, people, planet”, the GPI indicators have three groups: economic, social and environmental. A humble prediction: As TBL strategies prove to be a viable business strategy in the future, we will no doubt see significant GPI growth—in Maryland and beyond!
Guest Author: Emery Nelson
Office for a Sustainable Future, DNR
We need to place TBL and GPI under the banner of "ethical business." Part of expanding ethical business in America is the expanded use of TBL and GPI. Ethical business is the frame.
Previous questions and dialogue available below.
- Happiness is Oppressive?
- Location Matters
- Valuation Part II: How We Quantify Full Value
- New Interactive Tools at MD-GPI
- Beyond GDP: Year in Review
- Triple Bottom Line
- DYI GPI: So You Want to be a Czar?
- How Much are Those French Hens?
- The End Game: Happiness & Well Being
- Giving Something Back: Your Time
- Meet the Elephant: Valuation
- Income Inequality & its Effects on the MD-GPI
- The Case for New Measures of Growth & Prosperity
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