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The “Triple” Bottom Line

March 27, 2015 by Dr. Jon Warner in Sustainability

The “Triple” Bottom Line

The term “the triple bottom line” (often abbreviated as TBL or 3BL) has been around for around 20 years now. In essence it is an accounting framework with three parts to it: social, environmental and financial. These three divisions are also called the easier to remember three Ps: people, planet and profit. 

In traditional business accounting and common usage, the “bottom line” refers to either the “profit” or “loss” that has been achieved by an organization. But over the last few decades a new debate has gained more and more interest, which essentially says the presence or absence of profit is not enough and there are other measures that we should include if we want to properly measure organizational success. For example, if a construction organization has a healthy profit, but their operations in building assets means that they are using rare or short-supply materials and having lots of safety injuries and even deaths of employees then we cannot say that it is being “successful” in this broader sense. As a result, the triple bottom line adds two more “bottom lines”: Firstly, it adds an environmental bottom line, which looks at how sustainably the organization operates in being good for the planet as a whole. Secondly, it adds a human capital bottom line, which looks at the extent to which an organization’s people are well looked after and feel good about the work that they are doing – this adds “planet” and “people” dimensions and along with “profit” leads to the triple bottom line that we now ideally measure in combination. 

How do we implement a Triple Bottom Line or TBL system?

While organizations of all kinds and sizes have been measuring profitability in detailed ways for hundreds of years, measuring both the people and the planetary realms present a number of challenges that are still hotly debated. Some experts suggest that we should in some way “monetize” all three dimensions of the TBL. While this may have the benefit of having a common unit, many people point out that the assumptions that we have to make about both the people side of the equation and issues relating to sustainability are much more critical to agree first, and don’t necessarily offer easy answers.

Another alternative to a monetary measure is to develop some kind of Index to allow a reasonable comparison between cohorts, companies, cities, countries, and communities, etc. But even here, it is difficult to avoid the need to make a number of subjective assumptions even when using an index and in agreeing which of the TBL factors is deemed to carry the most “weight in any given situation – people over profits or planet over people. At a broad level this may be easy but at the micro-level not so much. 

What measures should ideally go into a possible TBL Index?

Specific suggestions on what any given organization might put into a TBL index are clearly best generated locally and according to particular circumstances which may reasonably apply in that situation, in that industry, in that location and so on. However, we can look at some of the categories that any organization may look at or draw upon in creating a useful index. This includes: 

Possible Profit Measures: Profit measures should obviously deal with an organization’s financial “bottom line” and the flow of cash in and out. It could look at income or expenditures, taxes, business climate factors, employment, and business diversity factors. Specific examples might include:

  • Revenues generated (and the costs of doing so)
  • Expenses incurred
  • Cash-flow
  • Balance sheet strength
  • Value added

Possible Planetary Measures: Planetary measures should ideally incorporate things like the impact air and water quality, energy consumption, natural resources, waste, and land use/land cover. Ideally, having long-range trends available for each of the environmental variables would help organizations identify the impacts a project or policy would have on the area. Specific examples might include:

  • Carbon footprint
  • Volume of Pollutants
  • Electricity consumption
  • Fossil fuel consumption
  • Waste management success

Possible People Measures: People-side measures refer to social dimensions of the organization (and the teams within it) as well as in the community or region where the organization operates. It therefore could include measurements of education, access to information, health and well-being, quality of life, etc. Specific examples might include:

  • Employee and community happiness/satisfaction
  • Male/female split (at all levels)
  • Access to and use of education and training
  • Average commute and leisure times
  • Workforce and community health and safety rates 

Who can and should use the TBL Model?

There are two primary types of organizations that can benefit from a TBL approach and model – businesses of all kinds and non-profit organizations. For businesses, the TBL and its added value of human and environmental sustainability have become extremely compelling due to accumulating anecdotal evidence of greater long-term profitability. For instance, customers will buy more from companies who look after the environment well in a variety of ways or who treat workers and the community well. For nonprofit organizations, especially the ones with goals of economic prosperity, social well-being and environmental protection, TBL allows them to show that they are making a wider impact than would be captured if they only measured funds raised and costs spent. Hence for most organizations, the Triple Bottom Line concept is changing the way that businesses, nonprofits and even local and federal governments measure their contribution and worth. This means that they can more readily show that they are all about “being good” and “being well” and “doing good” and “doing well”. Nicely captured by the diagram below.

“being good” and “being well” and “doing good” and “doing well”

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About Dr. Jon Warner

Dr. Jon Warner is a prolific author, management consultant and executive coach with over 25 years experience. He has an MBA and a PhD in Organizational Psychology. Jon can be reached at

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One Comment

  1. Rusell ChandlerSeptember 12, 2016 at 11:41 am

    Each one of us should have a fair share in Sustainability. There are numerous ways on how to lessen carbon footprint like ewaste recycling and recycling containers.

About the Editor and Primary Author

Jon Warner

Jon Warner is an executive coach and management consultant and in the past has been a CEO in three very different companies. Read more

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