Elkington's Triple Bottom Line (Profit, People, Planet)

Last updated Jun 14, 2023 Edit

• Business

A way of assessing business performance based on three important measures: people, profit and planet.

• Businesses assumed to be profit-maximisers
• Traditional measure of business success
• Closely linked with business value (eg, share price)
• Often the basis for financial incentives like bonuses

• It aims to measure the financial, social and environmental performance of a business over a period of time

• Profit
  • Familiar to managers
  • Identified from income statement
  • Audited—reliable figure
• Planet
  • Measures impact of business on environment
  • More tangible, eg emissions, use of sustainable inputs
• People
  • Measures extent to which business is socially responsible
  • Hard to calculate & report reliably & consistently

• Profit
  • Novo Nordisk is already highly profitable so does not need to work heavily in this area
  • Primary objective is to develop and market treatments
• People
  • Novo Nordisk Foundation has the majority of the voting power in their shareholder structure
  • Develop/provide life saving medications
• Planet
  • Commit to 100% renewable production sites
  • Investing in research
  • Zero environmental impact by 2030

• Encourages businesses to think beyond narrow measure of performance (profit)
• Encourages CSR reporting
• Supports the measurement of environmental impact and the extent of sustainability

• Not very useful as an overall measure of business performance
• Hard to reliably and consistently measure people & planet bottom-lines
• No legal requirement to report it so take-up has been poor

Business