So What's Up With the Triple Bottom Line?

Previously, I've mentioned that social entrepreneurs are architects of social enterprise. But what really is a social enterprise? Wikipedia defines social enterprise as  "organizations which trade in goods or services, and link that trade to a social mission. The need to deliver on financial, social and environmental performance targets is often referred to as having a triple bottom line."

The triple bottom line (or 3BL) are: people, planet, profit. 3BL in accounting means "expanding the traditional company reporting framework to take into account environmental and social performance in addition to financial performance."

3BL is a core principle of Corporate Social Responsibility (CSR). CSR is closely linked with the principles of sustainability.

In his book, The Triple Bottom Line, author Andrew Savitz argues that,

The centerpiece of The Triple Bottom Line is the concept of sustainability. The term originated around a growing awareness, in the 1980s, that nations had to find ways to grow their economies without destroying the environment or sacrificing the well-being of future generations. Sustainability has since become a buzzword for an array of social and environmental causes, and in the business world it denotes a powerful and defining idea: a sustainable corporation is one that creates profit for its shareholders while protecting the environment and improving the lives of those with whom it interacts. It operates so that its business interests and the interests of the environment and society intersect.

Savitz goes on to say,

Sustainability is not about philanthropy. There's nothing wrong with corporate charity, but the sustainable company conducts its business so that benefits flow naturally to all stakeholders, including employees, customers, business partners, the communities in which it operates, and, of course, shareholders.

....

But a sustainability vision is more than catchy words. It requires you to see how to incorporate the Triple Bottom Line and its emphasis on environmental, social, and economic prosperity into every decision made throughout the organization, to think about how it takes hold at the operating level. Having a vision means constantly seeking answers to questions like these: What resources does your business take from the environment? How are those resources replenished? What are the biggest economic and social issues you face? How do you interact with the community? It may sound as if we are advocating that businesspeople become part-time philosophers. In a way, we are. All of us are living in a time of transition. An older vision of business, in which financial performance is seen as the only way to evaluate your actions, is being exposed as inadequate to the demands of an interdependent world and, in the long run, self-defeating. A new vision, still in its formative stages, is taking hold, and no consensus has yet emerged on many of the important details.

So there, from social entrepreneurs to social enterprise to corporate social responsibility to sustainability, all are interlinked and flow naturally, with all participants consciously circulating wealth back into the triple bottom line.

And the entrepreneurship week continues...

posted by: ~C4Chaos