The triple bottom line, or 3BL, refers to three things: people, planet and profit. In the past companies were almost entirely profit-driven enterprises where every business decision was based on economic prosperity, often at the expense of either communities and/or the environment.
Now, however, there is an increasing focus on the social and environmental impact that businesses have on their stakeholders, local communities and the world around them. This new interest in how companies measure their ‘Social and Environmental Responsibilities’ (SER) reflects the many advantages they hold for the company.
How can being more socially and environmentally responsible help your company grow?
1. High morale and improved productivity
The feeling of self-worth and pride that taking a moral stance can bring to the company’s employees and stakeholders can have a positive impact on productivity and morale.
2. Reducing overhead costs
The company could actually save money. Take the environmental aspect, for example – businesses do not have to begin by thinking on a global scale or changing suppliers to minimize their environmental impact.
They could start by investing in energy-saving lightbulbs, reducing water wastage, going ‘paperless’ and recycling all waste products. These small decisions will save money while reducing environmental impact.
3. Build a committed group of core, repeat customers
Companies can gain a crucial advantage by leveraging their Corporate Social Responsibility (CSR). Responsible consumers are looking for companies that adopt 3BL strategies and are willing and ready to support them – even if it means paying higher prices than competing products.
With the right branding and promotional efforts, companies that implement sustainable practises can become known as ‘green’ and socially responsible, and use this as a competitive advantage in the industry.
The brand image should reflect the company’s values. By incorporating CSR policies into the business strategies, this brand image attracts a whole new segment of consumers, thus increasing profits and allowing the company to grow.
Consider that many businesses, from small to large, are now making sustainability fundamental to their businesses. Companies that fail to keep up with the trend may find they get left behind and are unable to compete in their industries.
4. Attract top talent to grow your company
Businesses that invest in their employees (through training schemes and employee benefit packages, for example), invest in their local communities, and sponsor charities will be more enjoyable places for people to work.
Not only does that make people happier (an end goal in itself) but it will also inspire loyalty and attract talented people to the company. This will in turn benefit the company financially.
There are no true downsides to adopting a 3BL approach to business.
A common misconception might be that by considering the other two factors (people and planet), the third factor (profit) might be diminished. But as we can see, not only is there a growing market for sustainable businesses, but by adopting CSR policies businesses can actually be even more profitable and competitive.
How a “buy one, donate one” CSR model has benefitted two companies
There is an array of different CSR models companies can choose from. A “buy one, donate one” approach has been an effective one for companies in some sectors. Here’s how two companies have leveraged this focus to benefit their businesses, as well as the larger social and environmental consequences.
TOMS Shoes was founded in the U.S. in 2006 by Blake Mycoskie, who has a familiar story for companies that heavily rely on 3BL in their business model. He was travelling in Argentina and observed the hardship endured by children who had no shoes to wear. He came home with his innovative idea of starting up a shoe company where for every pair of shoes they sell, one pair of shoes is donated to a child in need.
The company didn’t stop there though, as a lack of shoes was far from the only issue the founder encountered on his global travels. Soon the company expanded to include three further collections. TOMS Eyewear addresses sight deprivation by providing a pair of glasses/eye treatment to those in need for every pair of glasses bought. TOMS Roasting Co. states that for every purchase of their coffee they will collaborate with their “giving partners” to create sustainable clean water production for deprived communities. Lastly, TOMS Bag Collection aims to provide a safe birth to vulnerable mothers and their children for every bag that is purchased.
All of these are based on their trademarked One for One® system that allows customers to easily understand exactly what their purchase can achieve and gives them positive reinforcement for their purchase.
By selling more than just shoes, TOMS linked their brand with not only a product, but with a service – the service being the “feel-good” factor their consumers purchase with their item. Their One for One® policy is their brand image, more so than the shoes, glasses or bags that they sell. This imbues their products with added value and allows them to position themselves in the market based on this added value and not just the product that they are selling. People might then buy a TOMS bag or glasses based on the feel-good factor that they got when they bought the shoes, or vice-versa.
- Better World Books
This company, founded by three graduates of the University of Notre Dame in 2002, specialises in selling used textbooks, which they ship worldwide for free. For every textbook bought, another is donated to a person in need.
The social aspect of this company is clear from its main policy – it promotes literacy across the globe and partners with several literacy programs to support its donations. Better World Books also considers its own environmental impact as described on their website, “And in case you’re concerned about your eco-footprint, every order shipped from Mishawaka is carbon balanced with Green-e Climate certified offsets from 3Degrees, a leading green power and carbon balancing services firm.”
Importantly, by the very nature of their business they are also reducing the number of old textbooks that might otherwise be sent to landfills.
Championing social and environmental causes can both save and make money
By embracing 3BL as a core value, companies have proven themselves successful in their industries, thus covering the “profit” part of the equation, and they also address both social and environmental concerns.
This is possibly a consequence of the public interest.
It’s easier to touch your customers’ hearts when they can clearly see their purchase easing immediate suffering (such as the “buy one, donate one” policies).
This can be more impactful than the more abstract concept of saving the planet by reducing our carbon footprints, reducing waste and using bio-degradable materials.
By winning over dedicated customers, improving employee loyalty, attracting top talent, and reducing overhead costs, this strategy could be your ticket to success.
The only question left is: what steps will your business take next to move towards this goal?