Introduction
In our rapidly evolving world, sustainability has become a focal point. For the first time, the term “sustainability” was used by the World Commission on Environment and Development on 27th April 1987. The commission emphasised the urgent need to act swiftly to mitigate global warming and its devastating effects. Organisations and governments alike are urged to reduce greenhouse gas emissions, with a 10-15 years window to act at a moderate cost to arrest the escalating environmental crisis.
However, failure to cooperate and implement policies that help reduce global warming could push the Earth into an irreversible state. This calls for a shift in the business paradigm, moving from the traditional profit-centric approach to a more holistic one, focusing on the triple bottom line (TBL) of sustainability: people, planet, and profit.
The Rise of Conscious Capitalism and the Triple Bottom Line
Traditionally, businesses were solely invested in generating profits, with little regard for their negative impacts on communities or the environment. This began to change in the mid-1990s when Muhammad Yunus introduced the concept of conscious capitalism. Yunus set up a program in Bangladesh offering micro-loans to poverty-stricken individuals and families. This “socially conscious capitalist enterprise” won him the Nobel Peace Prize in 1995 and sparked a global shift towards sustainability in business.
In the same period, another significant development took place. John Elkington introduced a new accounting framework known as the triple bottom line (TBL) to measure the sustainability performance of corporate companies. Unlike traditional measures of corporate success, which focused solely on profits, returns on investment, and shareholder value, the TBL incorporated social and environmental factors.
The TBL framework revolves around three interrelated dimensions: people, planet, and profit. This approach encourages businesses to consider their social and environmental impact alongside their financial performance, thus promoting a more sustainable and balanced form of capitalism.
The United Nations and the 2030 Agenda
Further reinforcing the importance of sustainability, the United Nations recently outlined the 2030 agenda for sustainable development goals (SDGs). These goals cover various aspects of social, economic, and environmental sustainability, including clean water and sanitation, gender equality, affordable and clean energy, decent work, sustainable communities and cities, and responsible production and consumption.
The United Nations encourages governments and other institutions to form partnerships and leverage technology to mitigate the effects of global warming and achieve the SDGs. This highlights the importance of technology and collaboration in the pursuit of sustainability.
Literature Review: The Triple Bottom Line
The TBL accounting framework has gained significant traction across private companies, government entities, and non-profit organisations in the past two decades. It is a critical tool to support and maintain sustainability goals by developing objectives that impact social, environmental, and economic performance.
The TBL framework encourages companies to measure their success and impact in three separate bottom-line measurements: people, planet, and profit. This approach offers a balanced scorecard for businesses to evaluate their impact on the community and the planet. The relevance and effectiveness of the TBL can be observed across all sectors, proving its adaptability and universal applicability.
Planet
Climate change, primarily caused by human activity, is humanity’s most significant challenge. The leading cause of climate change is the greenhouse effect, where greenhouse gases trap heat within the Earth’s atmosphere, leading to global warming. Addressing the environmental variables’ greenhouse gases, such as halons and chlorofluorocarbons (CFCs), is imperative to achieve environmental sustainability.
These gases, released by various industries, form a thick layer in the upper atmosphere and act as a blanket, preventing the Earth from losing excessive heat. This leads to a rise in global temperatures, resulting in various climatic changes such as melting glaciers and ice caps, changing weather patterns, and rising sea levels.
To mitigate these effects, industries must adopt sustainable practices such as using electric vehicles to reduce harmful gas emissions, investing in toll roads to decrease congestion and travel hours, and implementing carbon capture and storage systems to remove excess carbon from the atmosphere safely.
People
The social dimension of the TBL can be measured through various social variables, including equity, education, access to social amenities, social capital, well-being, health, and quality of life. These variables can help governments, for-profit and non-profit organisations identify significant challenges facing communities or regions, enabling them to formulate and implement policies that show positive results.
However, the lack of sustainability and the effects of global climate change threaten to reverse the progress made in poverty reduction, global health, and eliminating economic inequalities. The impacts of global warming have been becoming more severe, and many governments, especially in developing countries, cannot protect their citizens from the resultant destruction and suffering.
Profit
At the economic level, the TBL measures profits and sustainability concerning the flow of money and the organisation’s bottom line. Some economic variables that ensure sustainability include job growth, employment distribution, personal income, underemployment, the percentage of companies per industry, establishment sizes, establishment churns, and the revenue generated in every sector.
In the era of Industry 4.0, companies that need help to adapt to technological changes face significant challenges in keeping profits afloat. Supply chains have evolved, demanding companies adopt technologies that enable them to be agile and lean to reduce waste. This approach ensures the company’s economic sustainability and contributes positively to environmental sustainability by minimising waste and reducing the company’s carbon footprint.
Applying Digital Technology for Economic, Social, and Environmental Sustainability
Technology plays a crucial role in promoting sustainability as our world becomes increasingly digitised. Various digital platforms and technologies help monitor and mitigate the effects of climate change and promote social and economic sustainability.
For instance, the Global Environment Monitoring System for Air (GEMS Air) helps monitor changes in the concentration of greenhouse gases and informs governments and communities about areas that need mitigation. Similarly, the Freshwater Ecosystem Explorer helps manage freshwater reservoirs by thoroughly examining the state of rivers and lakes across every nation on Earth.
Moreover, the International Methane Emissions Observatory (IMO) helps institutions reduce methane emissions by collecting data from various sources, including scientific studies, satellites, corporate reporting, and ground-based sensors.
These examples underscore the role of technology in achieving sustainability and highlight the importance of digital transformation for corporations aiming to meet their sustainability goals.
Implementing the TBL for Sustainability in the 21st Century
In the 21st Century, organisations must strategically implement the TBL to ensure sustainability. This involves adopting an experience-centred approach instead of solution-centred, outcome-based rather than input-based, lean and agile rather than bureaucratic and large.
Moreover, organisations must shift from technology-obsessed to service-oriented, moving from embracing cut-throat competition to being ecosystem-driven. By implementing these strategies, organisations can achieve sustainability comprehensively and holistically, contributing positively to people, the planet, and profit.
Conclusion
In conclusion, the triple bottom line (TBL) concept provides a comprehensive framework for organisations to achieve sustainability. Organisations can contribute positively to social, environmental, and economic sustainability by focusing on people, the planet, and profit.
Moreover, adopting digital technologies and strategic alliances can enhance an organisation’s sustainability efforts. By embracing the TBL, organisations can fulfil their corporate social responsibilities, contribute to mitigating global warming, and achieve their sustainability goals.
In a world grappling with the impacts of climate change, implementing the TBL is no longer a choice but a necessity for all organisations, regardless of their size or industry. As we move forward, adopting the TBL will play a pivotal role in shaping a sustainable future for all.