The triple bottom line is something that I have been reading about that really excites me, and makes me wonder why all businesses are not set up this way. It is a way of accounting that looks at economy, ecology, and equity, or another way to phrase it is it looks at people, profit, and planet.
The idea is that a company assigns value to natural capital (planet), and to human resources (people), and then incorporates their overall costs and benefits into the bottom line. There is a theory that companies do the best in the long run if they base their accounting not just on cash, but on the overlap of profit, environment and society.
I have read about some companies that are great examples of this method of accounting the the book Global Profit and Global Justice. I would like to share a few of their stories with you.
Church and Dwight Company (aka Arm & Hammer, etc) started using recycled packaging as early as 1907, and now use over 80% recycled papers in all aspects of their business. They also use only 4 chemicals in all their manufacturing facilities; that is impressive considering how many chemicals we all likely have in our homes. A great example of focusing on environment.
Wainwright Bank, from Boston have focused on the social aspects of responsible business. Here are some of their initiatives:
- Affordable housing (committing financing to a wide range of housing projects)
- Health services (helping with HIV/AIDS by aiding non-profits)
- Environment (partnerships with environmental groups)
- Homelessness and hunger (providing loans to shelters)
- Women’s Issues (education activities and banking relationships with organizations helping women)
- Diversity (50% of the work force is women, and 30% is visible minorities)
- Social activism (stakeholder in Trillium Asset Management Co., which is an investment management firm that only deals in socially responsible investments)
Cisco Systems has provided the routers and switching gear that has enabled the rapid growth of the Internet. This is a very wealthy company, but right away they set up a Foundation to give back. Their giving mostly revolves around education, and one of the programs aims to bring education and Internet-age job skills to participants in 33 of the 48 least-developed countries in the world. They also created a really cool partnership when they hit a bit of a recession. What they did, because they valued their employees, is offer them an option to work at a non-profit for reduced pay (1/3 wages), but still maintain their employee health benefits and stock options. Many were hired back at Cisco when the recession ended, but a few opted to stay at the non-profits.
Interface Inc. a large flooring company has also redefined how they are going to be a sustainable company and leader. Here are their seven steps:
- Eliminate waste (ie the concept of waste)
- Benign emissions
- Renewable energy
- Closing the loop (so materials used flow cyclically)
- Resource-efficient transportation
- Sensitivity hookup (community that is sustainably aware)
- Redesign commerce (so service and value are the focus not material)
I think my part in this is taking a deeper look at the companies that I patronage. Do they deal in the triple bottom line – or does cash rule the business decisions? It does make me excited to see that some clever people are making such smart choices, and if I can, I want to support that type of thinking.