What is Triple Bottom Line (TBL) ?

The dynamic nature of this world and the business environment is quite evident to one and all. In the present day economy, sustainability has become a vital element to provide competitive edge to the firms financially, socially and environmentally. The notion of triple bottom line, which is an important aspect of sustainability, describes that the level of financial profit is not the only parameter to define the success of the firm, but the firm's activities towards the welfare of overall society also reflect its success.

Meaning of Triple Bottom Line

The concept of "Triple Bottom Line" (3BL or TBL) outlines that firms and various generate value in different dimensions. John Elkington gave the concept of Triple Bottom Line in 1994 while dealing with the concept of 'eco-efficiency' that includes the monetary and environmental aspects of performance. In addition to this concept, social impacts are also included in TBL along with the broader economic influences which are seldom mentioned in the financial bottom line.

The concept of sustainability is integrated in the business decision-making with the help of triple bottom line. It is considered as an accounting framework which consists of social, environmental (or ecological) and financial dimensions. These dimensions are commonly known as three Ps - People, Planet and Profits, also referred to as the "three pillars of sustainability". The concept of TBL is gaining popularity in different business sectors including profit, non-profit and government sectors. In fact, it is being utilized by many organisations for the evaluation of the performances in a more comprehensive manner.

In conventional business accounting and regular usages, either the 'profit' or the 'loss' is the main concern in case of 'bottom line' as they are recorded at the bottom of revenue and expense statements. There have been a lot of attempts by the environmentalists and social justice advocates for bringing the comprehensive concept of "bottom line" among the common public with the help of full cost accounting

Triple Bottom Line Example, if a copper mine is creating water pollution and the government is spending no money on river cleaning and healthcare of the general public, while the company is earning lots of profit, on what basis a full societal cost benefit analysis will be performed by the firm? Thus, two additional bottom lines, i.e., social and environmental (ecological) concerns are also introduced by the triple bottom line.

The Council of the Bars and Law Societies of the European Union (CCBE)'s CSR Guide mentions following three main Triple Bottom Line (TBL) duties, referred to as "3 Ps" :
1) People
2) Planet
3) Profit



The social dimension of Corporate Social Responsibility consists of various dimensions that are both internally (the manpower of the firm) and externally (the outside society) oriented. The concern for this aspect originates from creating good labour relations, providing opportunities to employees to execute their own personal responsibility, augmenting the work and care responsibilities, improving employability and including minorities in workforce activities. The societal aspect is often directed at the immediate environment of the firm.

For example, for the development of secured living and safe working environment, the assistance and involvement of companies in various projects will be required. This will certainly help in the upliftment of neighboring areas, particularly with reference to urban policies. Respecting the human rights and basic labour standards abroad and improving the labour relations in developing countries are the essential elements of the societal policy.

A socially-aware company is a firm whose business operations are properly integrated with the societal aspects, thereby leading to a proactive approach. Such a company will focus upon its people and will have major concern on the following : 
  1. Labour rights forced, slave, or, compulsory labour, freedom of association/collective bargaining, proper rest, child labour, non discriminative or equal opportunities, leisure, and holidays, suitable wages, health and safety. 
  2. Right to life. 
  3. Right to work, i.e., vocational/technical training, protection against unfair dismissals and guidance. 
  4. Development rights, i.e., health related rights, education rights, rights to clothing, rights to adequate food and fair distribution of food, housing rights. rights to enjoy technological development, social security. 
  5. Rights to hold opinions and freedom of thought, expression, religion and conscience.
  6. Privacy rights, e.g., personal information, drug testing, surveillance, etc.
  7. Right to a family life. 
  8. Right to participate in political life. 
  9. Right to peaceful assembly.
  10. Informed consent to medical/biological trials. 
  11. Cultural rights, rights to religious practice, and language.
  12. Material and moral interests from inventions.


The ecological aspect of Corporate Social Responsibility means that the firm's business operations are concerned with the welfare of natural environment. The transformation from end-of-pipe technologies to process-integrated technologies in order to control the adverse environmental impacts is the main part of this dimension. For this purpose, the design and the production process will include the environmentally beneficial aspects and impact on environment will be analysed throughout the entire life cycle of the product. Thus, strategic corporate environmental management also includes integrated chain management or eco-efficiency, i.e., products and services satisfying the human needs thereby helping in the improvement of life quality and simultaneously creating lesser burden on raw materials and the absorption capacity of the ecological system. The following elements are included under this dimension :
  1. U.N. convention on biodiversity - in-situ and ex-situ conservation, effect on diversity, using genetic material, technology transfer.
  2. Precautionary Principle (i.e., if there are the chances of negative impact of any action on environment - abstain). 
  3. Utilising and implementing GMOs (Genetically Modified Organisms).
  4. Impact on global warming and air emissions. (greenhouse gases). 
  5. Influence on the ozone layer (Montreal Protocol Annexes). 
  6. Banning the use of certain materials and substances, hereunder safe handling/transport of dangerous substances.
  7. Locating production sites far from residential neighbourhoods. 
  8. Contamination of soil, ground water, and surface water.
  9. Treatment and reduction of waste water.
  10. Water leakage and consumption. O 'Eco efficiency', consumption of raw materials, and energy. 
  11. Export and recycle of waste materials.
  12. Subsidising environmental projects (e.g. protection of the rain forest). 
  13. Welfare of animals.


Creating value with the help of production of goods and services along with employment and income generation is called profit. The monetary returns of a company reveal the customers' appreciation of its products and the efficiency of its production factors, while for the investors these returns are the factors which can be used to evaluate the performance of the company (shareholder value). The continuity of the firm in terms of monetary aspects is supported by the long-term profit motives. Both the basis and the prerequisites used for the realization of two other dimensions of Corporate Social Responsibility are formulated by the profit. The following elements are included under it :
  1. Asset creation, economic growth and financial profit. 
  2. Conflict of interest, business ethics, corruption and bribery. 
  3. Direct and indirect effect of spending power (customers, investors, suppliers, tax payments and investment) and the influence of geographic economics on the society.
  4. Economic impact resulting from various business processes outsourcing, knowledge, innovation, and social investments in employees and consumers. 
  5. Monetary support for political activities including political parties, lobbying, etc. 
  6. External economic influence from internalization of externalities, value of consuming products, pollution. 
  7. Stock exchange behavior including insider trading. 
  8. Tax incentives, economic regulation, re distribution.
  9. State contracts and subsidies. 
  10. Intellectual property rights, hereunder patents, pricing, impact on economic and societal development potential. 
  11. Anti-trust and competition, including alliances and market impact.
  12. Board and executive remuneration along with the role of accountants.
  13. Donations.
  14. Taxes, including "transfer pricing".

Criticism of Triple Bottom Line

The various criticisms of TRIPLE BOTTOM LINE (TBL) are stated below: 

1) Reductive Method : 
Unlike corporate approach, secondary importance is given to social, i.c., the living style of citizens and the manner in which they interact with each other and with the external environment in case of triple bottom line. An independent status is provided to the economics which is considered merely as an ideology rather than an analytical concept. Primary importance is provided to the economics in most of the problematic situations and it is expressed as a dominating factor of singular, historically specific economic configuration, which is mainly a modern globalising capitalism, while, the environment should be treated as an externality or background characteristic, an externality which primarily includes the human aspect in its definition. Thus in many researches which are quite critical in dealing with this concept, they treat the society as the combination of different concerns which are not considered by the two vital categories.

2) Inertia : 
The accomplishment of global agreements on various policies is quite difficult. This will render various methods at best advisory and thus cannot be enforced. For example, in order to replenish the lost ecosystems, individuals would avoid long periods of recession.

3) Application : 
TBL's ability of being implemented in a finance-oriented economic system can be seen as one of its major limitations. All the three bottom lines cannot be implemented and combined by any firm since there is no single method of evaluating the monetary benefits to the society and environment. 

4) Criticism from West Nations : 
Triple Bottom Line can be seen as a method which can be used by unfair firms for neglecting important laws and tax policies. Such firms can also develop an imaginary societal-friendly image for the purpose of maintaining good public relations.

Overall, the notion of Triple Bottom Line (TBL) tends to avoid the fact that if someone is not adding any value to the society, it is deducing value. Hence, by generating the third bottom life of being planet-friendly, firms are often left with the division of societal bottom line.