The Triple Bottom Line

By Amy Miller

Jargon is my nemesis. I rail against it for a living.

But today I will break my own rule because today I want to write about the Triple Bottom Line. I love this concept developed in environmental and overlapping business circles. Basically it says what your mom always told you: it’s not just about the money. And did she also tell you there are no easy answers. It’s about that too.

Like if you hang clothes to dry, you save on energy costs. Plus you extend the life of your clothes. But what about the scratchiness of the towels and your children’s comfort? What about the extra 15 minutes to hang each load. Or when you drive a smaller car to save on gasoline, do you put your children in danger? And now that you can no longer offer rides to other people, how often is another car going and adding to pollution. So many shades of gray.

Well, the triple bottom line, as economists and environmentalists call it, addresses and finally acknowledges – in terms bureaucrats and CFOs understand – that we need to take more than just dollars and cents into consideration when we decide if a new power plant, new box store or boiler system – is worth it.

If paper companies 100 years ago factored in the cost of cleaning the river after it ran red, they may have decided on a different manufacturing system. And if homeowners figured in the cost of dirty lungs and respiratory illness, the $20 price tag on the old wood stove a neighbor is selling might seem a lot higher.

The Economist newspaper said the phrase “triple bottom line” was first coined in 1994 by John Elkington, founder of a British consultancy.” He argued that companies should prepare three separate bottom lines: one for financial profit and loss; one measuring how socially responsible an organization has been; and one measuring how environmentally responsible it has been. Elkington said, the magazine wrote, that “Only a company that produces a TBL is taking account of the full cost involved in doing business.”

Of course the Economist acknowledged how hard this record keeping is. The full cost of a nuclear accident like Three Mile Island cannot really be measured in monetary terms. The cost to society of a lost forest is not quantifiable. The cost of child labor cannot be measured. But the term at least acknowledges the need to account for each of these costs

About the author:  Amy Miller is a writer who works in the public affairs office of EPA New England in Boston. She lives in Maine with her husband, two children, seven chickens, two parakeets, dog and a great community.

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