Triple Bottom Line

The triple bottom line is a way of assessing business performance based on three important areas:

• Finance (Profit)
• People
• Planet

Profit

• Familiar to managers.
• Identified from the income statement.
• Audited, so the information and figures are reliable.

Planet

• How the business activities impact the environment.
• More tangible - such as emissions.

People

• Assesses how the business is socially responsible.
• Hard to calculate and report.

Benefits of the Triple Bottom Line

• It encourages businesses to think beyond narrow measures (like profit).
• Encourages CSR reporting.
• Supports measurement of environmental impact.

Drawbacks and Criticisms

• Not very useful as an overall measure of business performance.
• Difficult to reliably and consistently measure.
• No legal requirement, meaning that take-up is poor.