People, Planet, And Profits And Projects

By Author: IvaluePlus
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The highly volatile and ever-so dynamic environment around us that aptly characterizes today’s world demands extremely driven organizations which are independently capable of engaging in the process of continuous creation and thought-innovation, adaptation to the newer trends or ways of operation, and constant learning through agile practices. It no longer remains acceptable enough to just create and place new products and services into the marketplace as that no longer is viewed as the benchmark for a successful entity. In fact, it is now increasingly more necessary to recognize and relentlessly pursue new opportunities that create and sustain social value as well. Due to the same, sustainable entrepreneurs and organizations are hence called upon to contribute by identifying unique growth opportunities which would help the society resurge from any possible or existing economic downturn and in turn, promote a prolific, extremely inclusive, and economically sustainable development. To achieve the same, an appropriate and balanced alignment of environmental, social, and economic aspects is therefore vital.
Entrepreneurs ...
... are now realizing the power of sustainable business strategies as it proves to not only address the world’s most pressing challenges, whether it be economical, social, or environmental, but it also shows a direct contribution in driving a firms’ overall success. This is now commonly known as the Triple Bottom Line.

WHAT IS THE TRIPLE BOTTOM LINE?

The triple bottom line is a business concept that posits firms should commit to measuring their social and environmental impact—in addition to their financial performance—rather than solely focusing on generating profit, or the standard “bottom line.” It can be further broken down into “Three Ps”: Profit, People, and the Planet.

Profit

In a capitalist economy, an organization’s success most heavily depends on its financial performance, or the profit it generates for its shareholders. Strategic planning initiatives and key business decisions are generally carefully designed to maximize profits while reducing costs and mitigating risk.

In the past, many firms’ goals have ended then and there. Now, due to the changing times, purpose-driven leaders are discovering that they have the power to use their businesses to effect positive change in the world without hampering financial performance. In fact, in many cases, adopting sustainability initiatives has proven to drive business success, directly leading to higher profits.

People

The second component of the triple bottom line highlights the societal impact of an organization, or its commitment to people.

Traditionally, businesses have favored shareholder value as it was deemed as a sought-after indicator of success, meaning they strive to generate value for only those who own shares of the company. As organizations have increasingly embraced sustainability, they’ve shifted their focus towards creating and emanating value for all stakeholders impacted by business decisions, including customers, employees, and community members as well.
Some simple ways companies can serve society include ensuring fair hiring practices and encouraging volunteerism in the workplace. They can also look externally to effect change on a larger scale. For instance, many organizations have formed successful strategic partnerships with non-profit organizations that share a common purpose-driven goal, while inculcating the ideology of inclusion and diversity as an integral part of the hiring process.

The Planet

The final component of the triple bottom line is concerned with making a positive impact on the planet.

Since the birth of the Industrial Revolution, large corporations have contributed a staggering amount of pollution to the environment, which has been a key driver of climate change. A recent report found that 100 companies in the energy sector are responsible for roughly 71 percent of all industrial emissions.

While businesses have historically been the greatest contributors to climate change, they also hold the keys to driving positive change. Many business leaders are now recognizing their responsibility to do so. This effort isn’t solely on the shoulders of the world’s largest corporations—virtually all businesses have opportunities to make changes that reduce their carbon footprint. Adjustments like using ethically sourced materials, cutting down on energy consumption, and streamlining shipping practices are steps in the right direction.

WHY IS THE TRIPLE BOTTOM LINE IMPORTANT?

To some, adopting a triple bottom line approach may seem idealistic in a world that emphasizes profit over purpose. Innovative companies, however, have shown time and again that it’s possible to do well by doing good.
The triple bottom line doesn’t inherently value societal and environmental impact at the expense of financial profitability. Instead, many firms have reaped financial benefits by committing to sustainable business practices.

“In many situations, it's possible to do the right thing and make money at the same time,” Harvard Business School Professor Rebecca Henderson says in Sustainable Business Strategy. “Indeed, there's good reason to believe that solving the world's problems presents trillions of dollars worth of economic opportunity.”

Beyond helping companies capitalize on a growing market for sustainable goods, embracing sustainable business strategies can be highly attractive to investors. According to Sustainable Business Strategy, evidence has increasingly shown that firms with promising environmental, social, and governance (ESG) metrics tend to produce superior financial returns. As a result, more investors have begun focusing on ESG metrics when making investment decisions.

DOING WELL BY DOING GOOD

As the world’s most pressing challenges evolve, purpose-driven leaders are needed to spearhead initiatives that can spur positive change—but making those changes isn’t an easy task.
“Finding these opportunities and making them successful takes both real courage and grindingly hard work,” Henderson says in Sustainable Business Strategy. “It’s often the firms that have a purpose—beyond simply making money—that make the first move.”
Although the road ahead is long and uncertain, it’s important not to be discouraged. The first steps toward sustainability start with the individual. Little by little, firms can unite around a common cause and have a real, measurable impact.
“It’s not only OK to take your values to work; it's required,” Henderson says. “A shared purpose can make firms both more productive and more innovative. But what's most important is that, in the end, [our values] are all we have.”

References: https://online.hbs.edu/blog/post/what-is-the-triple-bottom-line