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The Triple Bottom Line & How It Can Help Your Business

The Triple Bottom Line

The term "triple bottom line" may be familiar to some, while unfamiliar to others. In terms of business, it can be a very common concept. Essentially triple bottom line is a term that allows an organization to measure their sustainable growth, since this can be very difficult. First conceptually discussed by Freer Spreckley in the early 1980s, and more full by John Elkington in the mid 1990s, the triple bottom line allows organizations to measure three different aspects of their performance: social, environmental, and financial.

Financial impact is the traditional way of measuring a company's profit; however, by also taking into account the social and environmental impacts of the company, they are allowing themselves to function in the bigger picture and measure success on more than one level. Another name for this concept is "The Three P's" - People, Planet and Profit.

Though it is easy to measure profit in terms of cash, it can be difficult to capture the social and environmental aspects. Due to these different gauges, each section of growth has to be measured on its own as opposed to being lumped in together and then compared. By measuring a company or organization's progress not only in terms of profit, they are able to gauge the sustainability of the company as a whole and perhaps even more accurately predict future goals and create an optimal path. For example, if a company is providing products that harm the environment, they may not make as much of a profit as they might if they were to make a product or provide a service that helps or does no harm to the environment. If they give back to a community in some way, that also can increase the likelihood that people will buy their products or services and, therefore, ultimately enhancing their profits as well.

Though each is measured on its own terms, the three "P's" are connected in the way that they all can help one another. To maximize income, an organization or company can use this strategy to build something that is sustainable.