A new goal for businesses
Before corporate social responsibility (CSR) became popular many corporations or businesses were not interested or receptive towards the idea of sustainability, which is the framework of what corporate social responsibility is all about. Instead, corporate finance responsibility was the main priority and that happened to be the only bottom line driving force for corporations (Gray et al., 1995). However, evidently today, it is beyond a doubt that most multinational corporations or local businesses are slowly but surely adjusting and adapting to changes toward sustainability. Some have even successfully integrated triple bottom line into their business.
Instead of making the main objectives being just about profits like what it used to, most corporations today have steered towards sustainability in the long-term, which then gives corporations a whole new bottom line driving force. This bottom line is known as the triple bottom line (TBL), which generally relates to sustainability mentioned earlier. In other words, TBL as coined by Elkington (2004) was meant in reference to the understanding of measuring and take into considerations three important business aspects such as economic viability, environmental sustainability and social responsibility. In other words, TBL is more or less an expression, a terminology that is goal oriented to
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In order to better explain the triple bottom line, a firm emphasis on every aspect it covers must be done. Elkington (2004) mentioned that the development of the 3P formulation was closely related to sustainability and the triple bottom line. The three P’s which is associated to TBL as mentioned earlier stand for People, Planet and Profit. The default nature of this principle is extremely useful and practical for any businesses that intend to be more environmental friendly yet maintain its financial status.
This paper will touch on the topic of CSR, briefly discussing the before and after effects of CSR, followed by the advantages of long-term sustainability and the need for sustainability. Subsequently, more emphasis will be placed on the triple bottom line sustainability as an integral measurement of economic, environment and social business aspects. All this is done to address the statement Elkington (1998) had made regarding the triple bottom line and why it should be viewed as a new goal for businesses.
In the last decade or so, corporate social responsibility has been a topic of serious discussion which puts corporations in the spotlight of their involvement in preserving the environment in addition to using up the surrounding environment for their profiting sake (Steger et al., 2007). Due to globalization, corporations and businesses cannot get away with unethical practices or even destructive to the environment without attracting unwanted attention or negative feedback (Gray et al., 1995).
This is because awareness to the general public was made obvious regarding the effects of corporations on its role in polluting the environment in the process of production, many corporations that were exposed fell out of favor with the public which in turn affects the image of that particular corporation. Especially since the media paid ample attention towards corporations and any unethical or wrong doings they committed. Even increased pressure from activists, non-governmental organizations and the rapid flow of global information sharing contributed to pressuring corporations on their stance (Robinson, 2000).
From a stakeholders view point, a change in corporation drive is imminent and focal in ensuring businesses or the corporations themselves are to survive. Hence, a shareholders view of prioritizing profits is no longer a viable approach. Most companies are beginning to realize the importance of practicing proper ethics and incorporate them into their daily operations. This gave birth to a new consciousness which would be known as Corporate Social Responsibility and was known to start as early as the 1970’s.
According to the department of Trade and Industry in the UK, CSR represents “the integrity with which a company governs itself, fulfills its mission, lives by its values, engages with its stakeholders, measures its impact and reports on its activities”. Businesses could no longer focus on traditional economic methods alone as they now have a new responsibility which is balancing traditional economic goals together with social and environmental concerns (Windsor, 2001). In order to do so, the triple bottom line is a tool which is excellent for implementing or integrating sustainability into business agendas.
To reiterate, the triple bottom line measures performance on an economical dimension, social dimension and environmental dimension. The economic dimension would relate to ‘profit’, one of the 3P’s Elkington (2004) mentioned. In other words, the economic dimension or rather, profit refers to financial viability. This profit includes any issues that are pertaining to competitiveness, long term profitability and even job and market creation.
The concept of economic sustainability has increasingly been understood and related to producing added value in a wider sense as opposed to the more common conventional financial accounting (Steger et al., 2007). The advantages then which follow suit through the incorporation of economic and financial sustainability would encompass a set of advantages. These advantages would cover the reduction of operating costs through the systematic management of resources, reduction of cost of doing business while attracting new business integrity policies, increase in productivity through a motivated workforce, the attraction of new investors and last but not least, the ability to offer opportunity for inclusion in socially responsible investment indices (ICC, 2002).
So to conclude, most businesses strive for the very reason as to the profit section that is responsible of creating a commercialized framework of sustainability. To put simply, the ‘profit’ here takes care of economical aspects of that particular business, whilst working hand in hand with the other two sections which are ‘planet’ and people, by incorporating theories of human and nature. Secondly, the environment dimension as Elkington (2004) referred to as ‘planet’ among the 3P’s mainly focuses on the impact of which organizations have on living and non-living natural systems, not discarding the ecosystems, and even including other natural elements such as land, air and water.
However, the care for the environment or otherwise, environmental responsibility is deemed very complex. This is because the environmental responsibility involves more than just compliance with all applicable government regulations. It also covers any initiatives taken towards caring for the environment such as recycling, promoting eco-friendly methods of living or even energy efficiency. With the introduction of this aspect, even supports for eco-friendly disposal of e-waste such as gadgets and devices have surfaced. Newer methods in recycling are discovered which provides a safer alternative to various toxic or hazardous items required in goods production.
In addition to that, environmental dimension also involves “a comprehensive approach to a company’s operations, products and facilities that includes assessing business products, processes and services” (Jamali, 2006). That being said, the concept and outcome of this ‘planet’ factor will aid corporations not only internally but externally as well. The ‘planet’ section is responsible for ensuring that a business is regulated in an environment friendly and safe manner, for everything right from usage of raw materials to the actual process of calibrating production costs and not forgetting, shipping costs. The possibility of corporations that are used to unethical methods of handling in their daily operations have the option to eliminate waste and emissions, maximize the efficiency and productivity of all assets and resources while keeping the practices that might affect the environment in a harmful way to a bare minimum.