Triple Bottom Line Reporting
TRIPLE BOTTOM LINE REPORTING
The term triple bottom line (TBL) was coined by John Elkington (1949–) and colleagues at SustainAbility, a strategy consultancy firm, in 1994. It is part of a historical progression that included the development of the concept of sustainable development in the Brundtland Report, Our Common Future, which proposed the pursuit of financial gains be constrained by the need to maintain social and natural systems at levels sufficient for the needs of future generations.
TBL reporting is a perspective that identifies business performance as affecting three systems that are critical to long-term human survival: economic/financial, social/ethical, and environmental. The term expresses the broadening of accountability for business performance beyond the financial bottom line reported in traditional accounting documents. The term implies the responsibility of businesses for social and environmental, as well as financial, outcomes that result from their operations.
The TBL has become a framework for measuring and reporting business performance. TBL reporting has become formalized and institutionalized by the Global Reporting Initiative, which delineates dimensions for measurement and reporting within each of the environmental, social, and economic domains. TBL reporting is now common for large multinational companies and is often found on their Web sites. Examples of companies using the TBL reporting measures include Anheuser-Busch Companies, Dow Chemical Company, Microsoft Corporation, and Weyerhaeuser Company.
Multiple stakeholders have an interest in triple bottom-line reports: stockholders with an interest in socially responsible investing, employees with a desire to work for a company with exemplary performance in all three dimensions, and customers who wish to purchase from companies they identify as having a social and environmental conscience. Mutual funds that screen for TBL performance are now available. In addition, the Dow Jones Sustainability Indexes and the FTSE4Good Index rate corporate performance on the TBL and accept to their lists only those firms with outstanding performance. These ratings serve as signals to those wishing to invest in companies satisfying TBL criteria.
WEB SITES OF INTEREST
For more information regarding the Global Reporting Initiative: http://www.globalreporting.org
For more information regarding the Dow Jones Sustainability Indexes: http://www.sustainabilityindexes.com
For more information regarding the FTSE4Good Index: http://www.ftse.com/ftse4good/index.jsp
see also Financial Statements