Triple Bottom Line

An extension of the three overlapping circle model can be found in the application of the Triple Bottom Line (TBL) concept, which demonstrates a way of pursuing activities in the context of sustainability. The triple bottom line is a term used to refer to the three prongs of social, environmental, and economic accountability. The notion of reporting against these three components (or bottom lines) of performance is directly tied to the concepts and goals of sustainable development. Triple bottom line reporting, if properly implemented, will provide information to enable others to assess how sustainable an organization's or community's operations are. For an organization (or a community) to be sustainable (a long run perspective) it must be financially secure (as evidenced through such measures as profitability); it must minimize (or ideally eliminate) its negative environmental impacts; and, it must act in conformity with societal expectations. These three factors are obviously highly inter related.

Integrated TBL accounting and reporting implies that the three measures of value added are incorporated into a single, all encompassing measurement. So, for example, economic value added measures would be adjusted for the environmental and social dimensions. Such approaches imply moving towards a single set of accounts. The near term challenge, is to identify a limited set of key performance indicators for each bottom line, with a constant eye on the degree to which and how progress can be measured and integrated into this overall set of accounts.