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Triple Bottom Line

investopedia.com · 2,922 words · saved by 1 readers

In economics, the triple bottom line (TBL) maintains that companies should commit to focusing as much on social and environmental concerns as they do on profits. TBL theory posits that instead of one bottom line, there should be three: profit, people, and the planet. A TBL seeks to gauge a corporation's level of commitment to corporate social responsibility and its impact on the environment over time. In 1994, John Elkington—the famed British management consultant and sustainability guru—coined the phrase "triple bottom line" as his way of measuring performance in corporate America. The idea was that a company can be managed in a way that not only makes money but which also improves people's lives and the well-being of the planet. 1 In finance, when speaking of a company's bottom line, we usually mean its profits. Elkington's TBL framework advances the goal of sustainability in business practices, in which companies look beyond profits to include social and environmental issues to meas

Table of Contents Expand Table of Contents What Is the Triple Bottom Line? Understanding the TBL The 3 Pillars Measuring the TBL Pros & Cons Examples FAQs The Bottom Line The concept, also known as "People, Planet, Profit," was popularized by John Elkington in 1994. Mira Norian / Investopedia Close Definition The triple bottom line (TBL) is a framework in business that evaluates a company's impact and success by considering social, environmental, and financial factors equally. Key Takeaways The triple bottom line (TBL) evaluates financial, social, and environmental company performance.

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