Socially conscious businesses are on the rise because businesses are seeing the benefit to going green and taking care of people instead of focusing purely on profit. And millennials that are seeking employment are looking for new working environments that social businesses offer. There are so many benefits to focusing on a triple bottom line of people, planet, profit instead of just profit. I hope you enjoy this one, my amazing readers!
If you have worked in business for any period of time, then you know what the traditional bottom line is. This is focusing on how a business is performing based on how much money is left over after expenses are paid out of the company's incoming revenue. Measuring a business financial performance is fairly easy because all of the numbers are outlined for us and math is pretty basic.
Welcome to the new world of business! A world where businesses focus not only on their financial performance but on the social and environmental impact that their company is having on society as well.
I give you the "triple bottom line" viewpoint that was originally established in the 1960s but wasn't coined a term until 1994. In the 60s, working conditions were considered to be abhorrent and very unsafe so labor laws were established in order to give American workers the right to fair wages, safer working environments, and a shorter work day for better pay.
In 1994, John Elkington, founder of a British consultancy agency named SustainAbility, coined the term "triple bottom line" and a grassroots movement was started to help businesses lead their company in such a way that is more beneficial to society.
Eventually, large businesses like Nike got involved in this movement by looking at the sources of their raw materials and products in lower income countries and deciding to treat employees better by offering better wages and safer work environments since many of those regions do not have the strict employment regulations for safety that the United States does.
Let's talk about what the triple bottom line actually is...
Financial
This is the one that most people know of already. Your profit and loss statement is what shareholders will look at when evaluating whether or not to invest in your company and will tell you how your business is performing financially. Are you making enough sales to cover expenses or is the business floundering?
People
This metric can be harder to measure but the cool thing is that you can choose the metrics here as long as you can explain those metrics to your advisory board, stakeholders, and employees. Freedom to choose your own metric is amazing! This is meant to measure how socially responsible the company is and how much they put into people socially.
Planet
This metric shows how environmentally conscious the company is. One example of this is choosing to use recycled materials for your products or decreasing the paper products used by the business. Essentially, you are focusing on reducing your overall carbon footprint as an organization.
The major benefit of focusing on the triple bottom line is actually psychological. What you pay attention to is what will change and what you will focus on. So, if your company is focusing on social and environmental metrics and working to achieve those metrics then your people in your organization will be likely to focus on them much more naturally.
With that being said, if you are looking towards starting a socially conscious business then you should focus on finding people for your organization that align with your values and that of your company. Just a brief note to make life more fun!
Thanks so much for reading!