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Tripple Bottom Line

What Is the Triple Bottom Line (TBL)?

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



  • The concept behind the triple bottom line is that companies should focus as much on social and environmental issues as they do on profits.
  • The TBL consists of three elements: profit, people, and the planet.2
  • The triple bottom line aims to measure the financial, social, and environmental performance of a company over time.
  • TBL may result in retaining employees, increasing external investments, boosting sales from ESG-interested customers, and gaining long-term operational efficiencies.
  • TBL may also be difficult to measure, costly to implement and cause competing strategies across triple bottom-line components.

Understanding the Triple Bottom Line (TBL)

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 measure the full cost of doing business. Triple-bottom-line theory says that companies should focus as much attention on social and environmental issues as they do on financial issues.


TBL theory also says that if a company focuses on finances only and does not examine how it interacts socially, it is not able to see the whole picture and therefore cannot account for the full cost of doing business.


The 3 Ps of the Triple Bottom Line

According to TBL theory, companies should be working simultaneously on these three bottom lines:

  • Profit: This is the traditional measure of corporate profit—the profit and loss (P&L) account.
  • People: This measures how socially responsible an organization has been throughout its history.
  • Planet: This measures how environmentally responsible a firm has been.2


In the context of the triple bottom line, profit can mean more than just how much money a company makes. A company must ensure it earns its income in an ethical, fair manner. This includes soliciting business partners and vendors with which it aligns philanthropically. It also defines how a company develops its strategy or financial operating plan. For instance, profit also ties to a company's responsibility to pay its lenders, creditors, and employees what is due to them and to have a sense of financial responsibility for these obligations.


Some users of the triple bottom line may also say profit refers to not only a company's profit but the profit of those around the company. This specifically refers to the community in which the business operates. This may include:

  • Ensuring the company is paying its fair share of local, state, or federal income taxes on a timely basis
  • Making sure the company is fostering economic wealth within its community by shopping locally or utilizing small businesses.
  • We are committing to financially investing in the community through partnerships, developments, or corporate sponsorships.


In the context of the triple bottom line, people refer to every individual that is in touch with a company. This includes but is not limited to the following:

  • Employees. This means ensuring workers receive a fair wage in a safe environment that encourages professional development.
  • Vendors. This means ensuring a diverse set of suppliers is used and prioritizing small businesses or minority owners when appropriate.
  • Customers. This means ensuring customers have fair access to products and that their feedback regarding equity or safety is considered.

Traditionally, a company would prioritize investors or shareholders. The triple bottom line shifts the focus to individuals potentially not financially invested in the company but still tangentially involved with its operations. Now, instead of attempting to create value by only increasing investor returns, the triple bottom line strives to create value by encouraging volunteerism of its employees or support or business success of small suppliers, for example.



The most significant deviation from purely financial reporting relates to reporting on environmental impacts. Often, a company must be forced between a lower-cost option or a more environmentally-friendly alternative. A company may also choose between a less favorable alternative; for example, eco-friendly transit will likely be slower than aircraft.


Instead of reporting a company's positive changes to the planet, it is often much easier to assess the impacts of the alternatives elected by the company. Imagine a company that redesigned its distribution channels to reduce its energy use; such an activity would be reported as saving a certain amount of greenhouse gas emissions.


Some users of the triple bottom line may replace 'profit' with 'prosperity'; both terms are meant to be interchangeable and refer to the long-term health of the company and its programs.