Living on the triple bottom line

In modern business achieving an outstanding profit result is not enough. Society, communities and governments are now expecting an outstanding reputation in other areas as well. A modern business must be a champion on several fronts. First, it must be a consistent performer with outstanding service and product delivery. Second, it should be deploying sound and truthful reporting that helps ensure it is adding value in both financial and non-financial terms. Finally, it should have systems in place which help guarantee that it can sustain itself and add value to society.

One such demand is that business be socially and ethically responsible. As was discussed in Chapter 3, managers and their businesses must bypass their ego, and the attraction of higher wealth, to build a worthwhile purpose. One example is John Huntsman who has built the US$5 billion, 10 000-employee strong, Huntsman Chemical Corporation. Their mission has moved from what could have been labelled a pure profit motive to one that is quite different. Their current mission includes the following messages: paying off the debt, being a responsible corporate citizen and, finally, relieving human suffering. In recent years the business has been actively involved in many causes which some would argue is not core business. These include donating US$100 million to a cancer centre and building a shelter for the homeless in Armenia after an earthquake. John Huntsman strongly argues that this investment has been worth every cent. Not only is such action going to important causes, it creates a much greater spirit of accomplishment, motivation, unity and teamwork in the business itself.

Whether it is a small business giving money to a local child-care facility or a local artist donating a piece of artwork to a charity, there are many ways we can each make a positive contribution. The goal here is not about being seen to be nice to people, it is about making a worthwhile and positive impact on society, the ecology and the planet. With this focus the impetus for ensuring lasting success takes on a much higher level of importance and intention .

One way of pointing a business on this path is to embrace the triple bottom line. One of the best resources for exploring the triple bottom line on a world scale has been the Global Reporting Initiative at www.globalreporting.org. Here intensive collaboration and co-operation between authorities and experts from the UK, India, Canada, Japan, the USA and Sweden have produced a range of measures for economic, environmental and social performance.

The result has been a voluntary code on how any business or organization can take action. The Global Reporting Initiative has been very careful in making practical recommendations as to how all businesses can respond on a flexible and voluntary basis. For example, there is a phased incremental implementation for smaller businesses. The simple structure provides an easy to maintain process that can be updated and disseminated.

The various indicators that could be listed under a triple bottom line framework include:

• Economic: profitability, productivity, faster research and development, reduced cycle time, high-quality decision-making, lower training and education costs, agile manufacturing processes, faster customer response, increased rate of innovation, reduced learning curve.

• Environmental: including, for example, the impacts of processes, products and services on air, water, land, biodiversity and human health.

• Social: including workplace health and safety, employee retention, labour rights, child labour, community consultation, morale , wages and working conditions of staff in all operations.

For me the idea of the triple bottom line was first introduced to me when studying the pioneering work of the Body Shop. Here is a business that ˜walks the talk in undertaking regular independent reviews of their performance and knowledge in a range of areas including social and environmental performance and animal protection. For example, did the Body Shop deliver on its core values? Did they meet its goals in the protection of the environment and not lead to the harm of animals?

This initial discovery led me to uncover many European companies who are spending much more time ensuring a return of investment to customers, employees and trade unions, not just shareholders. Organizations such as Harley Davidson have successfully combined the profit motive with social responsibility and meaningful work. For more information visit the Business in the Community website at www.bitc.org.uk. There is also a host of businesses who have used the Balanced Score Card of Kaplan and Norton to help improve their capacity for a more sustainable future.

It is my view in the next decade I expect to see rapid increases in the area of reporting on the triple bottom line. Already in Northern Europe auditing the triple bottom line is fast becoming an expected business practice.