Triple Bottom Line

Definition

"Bottom Line" refers to the final profit or loss performance in a company's statement of accounts. A "Triple Bottom Line" is an overall evaluation of a company derived from the three areas of economic (financial), environmental and social performance.

The concept of Triple Bottom Line was proposed in 1997 by John Elkington of the UK business consultancy SustainAbility *1. Financial performance is evaluated from the share price, profit margin, employment scale, the level of tax payments, and other factors. Social performance is based on how well a company contributes the society as a good corporate citizen through business activities or social contribution programs. Environmental performance is evaluated by how well a company integrates environmental consideration into its business activities.

The concept advocates that companies should balance activities in these three areas to achieve sustainable development. The term has been widely accepted as a good representation of the concept of CSR. More corporations are publishing CSR and sustainability reports as society demands that they show accountability for their actions. GRI guidelines, which is a framework of these reports, are fundamentally based on the Triple Bottom Line concept.