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The Corporate Social Responsibility movement

Corporate Social Responsibility (CSR) has become increasingly sophisticated. Businesses that want to get the most out of being socially responsible need to stay on top of the latest resources and best practices. One best practice gaining traction is Environmental Full Cost-Accounting (EFCA or FCA), which examines a business’s profits and costs in a fuller context than traditional accounting. Full-Cost Accounting takes into account hidden costs, future outlays, and the environmental and social factors that lead to the “triple bottom line” (TBL or 3BL) of people, planet, and profit

This way of thinking rejects passing a business’ costs on to future generations, governments, or people who are exploited or damaged by the business’ practices.

  • People: This is the social equity or human capital bottom line. It tracks a business’ costs and benefits to its workers and the community and region in which it does business. An example of TBL thinking in this area is passing a part of the business’ profits upstream to a primary supplier, such as a company that sells coffee, passing a portion of their profits back to farmers who grow and produce the coffee.
  • Planet: Also known as the natural capital bottom line and tracks the sustainability of the company’s environmental practices. A TBL company that reduces its reliance on non-sustainable energy calculates the true cost of equipment on a “cradle-to-grave” basis (accounting for the cost to manufacture, operate, maintain, and dispose of said equipment).
  • Profit: The standard bottom line produced by regular cost accounting.

The goal of Full Cost-Accounting is to have all three bottom lines “in the black.” A modified goal might be to avoid going into the red when all three bottom lines are combined. For that to happen, a business must scrupulously manage the costs of its human and natural capital.

The first two bottom lines are quite non-traditional, and business groups are still working out how to calculate those values. Groups such as the Global Reporting Initiative, CERES, and the Institute for Sustainability develop ways to measure and report these metrics.

John Elkington

John Elkington coined the TBL term in 1994. According to a Forbes article published in 2019, the term and philosophy “is still gaining popularity and it has become part of everyday business language. Reason to be satisfied, one would think. However, despite its increasing popularity, Elkington . . . “recalled” the TBL terminology last year in a short article in the Harvard Business Reviewbecause of the rhetorical misuse of the TBL framework as an accounting and reporting tool. 

Triple Pundit

Yet for those who still believe and want to spread the philosophy in the hope of a better world, there exists the Triple Pundit, a news website devoted to the TBL, self-styled as “The Business for Doing Better.” It was founded in 2006 to catalyze conversations about social entrepreneurship for a business audience. This website currently has about 350,000 readers per month, and recent articles have covered immigration equity, the living wage, biodiversity financing, high-technology non-profits, and sustainable lithium mining. Topical sections include Community Engagement, Data and Technology, Leadership and Transparency, and Business Activism.

Triple Pundit has assembled a remarkable set of resources to help business leaders concerned with the three bottom lines stay abreast of their verticals’ developments. The organization is a morale booster, a guide to current events, and a crystal ball for every aspect of the TBL community.