A triple bottom line (TBL) report provides a quantitative summary of a corporation’s performance in terms of its economic or financial impact, its impact on environmental quality and its impact on social performance. The principle of TBL reporting is that a corporation’s true performance must be measured in terms of a balance between economic (profits), environmental (planet) and social (people) factors; with no one factor growing at the expense of the others.
A corporation’s sustainable development is about how these three factors can grow and be combined so that a corporation is building a reputation as being a good citizen. The contention is that a corporation that accommodates the pressures of all the three factors will enhance shareholder value by addressing the needs of its stakeholders.
Whereas TBL reporting is a quantitative summary of the corporation performance in the three factors over a previous time period, say a year, sustainable development tends to be forward looking and qualitative. Therefore TBL provides the measurement tool to assess a corporation’s performance against its stated aims.
Each factor can be assessed or measured using a number of proxies. The economic impact can be measured by considering proxies such as operating profits, dependence on imports and the extent to which the local economy is supported by purchasing locally produced goods and services. Social impact can be measured by considering proxies such as working conditions, fair pay, using appropriate labour force (not child labour), ethical investments, and maintenance of appropriate food standards. Environmental impact can be measured by considering proxies such as ecological footprint, emissions to air, water and soil, use of energy and water, investments in renewable resources. |
