What is the triple bottom line business model?
The triple bottom line is a business model that the British author John Brett Elkington created to explain how multi-dimensional the responsibility of corporations can be. According to Elkington’s model, a company should not base its targets purely on profit anymore.
He advocates that every corporation should measure its performance based on profit, people and planet. This means that a company can be only considered successful once it provides a financial, social and environmental return.
Of course, everyone is familiar with the importance of measuring the profit of their business. For many years, companies which are considered successful usually are profit-maximisers. But many still struggle to understand the importance of the two other lines of the model: planet and people.
The “planet” part of the model measures the impact of business on the environment, such as emissions and the use of sustainable inputs. Meanwhile, the “people” line of the model concerns the extent to which businesses are socially responsible. This last part of the triple bottom line model can be somewhat subjective and hard to calculate.
This model has been encouraging corporations to think beyond profit as the unique way of measuring performance. Businesses from different parts of the world have left behind such a narrow way of calculating their success. To do so, many have been using tools such as Optimy that support the measurement of environmental and social impact.