What is TBL (Triple Bottom Line)?
Triple Bottom Line (TBL) Definition
The Triple Bottom Line, or TBL, refers to the 1994 theory by John Elkington that companies ought to operate in consideration of social and environmental consciousness as well as profit.
Elkington believed that companies can and should be managed in a way that earns profits as well as improves the quality of people’s lives and the planet.
Thus, TBL is sometimes used to measure performance in corporate America.
Defining Triple Bottom Line in Simple Terms
The idea behind the triple bottom line is that if a company ignores how it interacts socially and with the environment, it cannot get an accurate sense of the true cost of doing business because it isn’t seeing the full scope of its actions.
Problems in Calculating TBL
One of the challenges involved in gauging a company’s TBL is that it is difficult to measure.
Profits are numerical and so easy to measure, but it can be hard to measure the value of, for example, reducing greenhouse emissions or preventing an oil spill except in terms of the impact to profit.
Furthermore, as Elkington has pointed out, social and environmental responsibility can be somewhat subjective.
Some may interpret a company having a limited impact on the environment as a success, while others might want to see a company actively improving the environment.