Rick Crawford
In “Sustainability 101: What is Sustainability?” we defined ‘sustainability’ using the 1987 Brundtland Commission’s definition: “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Similarly, a ‘sustainable business’ takes into account the role it plays in affecting the ability of future generations to meet their own needs.
TRIPLE BOTTOM LINE
But how does a business measure whether it is a sustainable business? The “triple bottom line” was coined by John Elkington in 1994 and basically means that a sustainable business not only looks to have a healthy economic bottom line, but also healthy social and environmental bottom lines. This is also know as: People, Planet, Profit. Historically, businesses only measured their value through their economic bottom line, which includes things like: sales, profits, taxes paid, monetary flows, and jobs created. But how do you measure social and environmental bottom lines?
Social bottom lines can be measured by things like: labor practices, human rights, product responsibility and community impact. A good illustration of measuring a social bottom line related to labor practices, human rights and product responsibility is how outdoor apparel brands like REI are now offering products that are Fair Trade Certified. Social bottom lines can also be measured by community impact, such as the number of volunteer hours an organization donates, or the total financial contributions made to nonprofits. For instance, Flood Tide Company is a member of 1% for the Planet, and donate 1% of sales to their local nonprofit partner, Charleston Waterkeeper. This is good for society and for business.
The environmental bottom line is basically a company’s environmental footprint and typically is measured as greenhouse gas (GHG) emissions, and energy, waste and water usage. For example, there are a number of companies (Nike, VF Corporation) that have committed to 100% renewable energy, which will not only eliminate their GHG emissions that contribute to climate change, but will also reduce their operational costs. There are also companies working towards improving water efficiency in manufacturing operations and zero waste to landfill, which are both better for the environment and the economic bottom line.
To provide you with an example of a company that is taking a triple bottom line approach to their business, and is therefore a sustainable business, look no further than RepYourWater who released their 2017 Sustainability Report earlier this year. Below is a video demonstrating RepYourWater’s environmental and social bottom lines:
RepYourWater is measuring its environmental bottom line by measuring its greenhouse gas (GHG) emissions which contribute to climate change and negatively impacts fisheries around the world; and by diverting waste from the landfill, which prevents contaminates from entering our waterways.
RepYourWater measures its social bottom line through monetary donations to its nonprofit conservation partners and through the number of volunteer hours it provides to nonprofits. By working to minimize its environmental impact and benefiting society through its donations and volunteer hours, RepYourWater has also managed to increase its growth year over year proving that taking a triple bottom line approach and operating sustainably is simply good business.
So, what is a sustainable business? A sustainable business considers the impact its operations and products have on the ability of current and future generations to meet their needs, and a sustainable business measures its impact by taking a triple bottom line approach.