A Critical Examination of the Triple Bottom Line

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ENVS 6114 TERM PAPER A Critical Examination of the Triple Bottom Line ENVS 6114: Sustainable Development Submitted to: Professor Rob Deacon Submitted by: Richard Marx November 12, 2003 The triple bottom line framework has become increasingly popular in management and accounting circles for integrating sustainability into the business agenda. The paradigm measures a corporation’s success not just by the traditional financial bottom line, but also by its social and environmental performance (Elkington, 1999). Broadly defined, the triple bottom line (TBL) captures the full range of economic, environmental and social values a firm must embrace and balance together. In practical terms, the TBL accounting process identifies, assesses and reports business activities against economic, social and environmental dimensions (SustainAbility Online, 2003). The triple bottom line (TBL) is best thought of as a metaphor which manages, measures and publicly reports performance along multi-dimensions. Yet there are no consistent standards for the presentation, measurement and verification of triple bottom line reporting. A standardised reporting of the TBL would facilitate a better communication and benchmarking (comparison) of corporate performance within particular sectors and between similar sized firms. This paper serves to critically examine the TBL framework within the corporate context. First, in order to appreciate how the corporate sector should contribute towards sustainable development, recommendations from a number of primarily non-business sources were considered. Then, an exploration of what is meant by the triple bottom line metaphor, what its supporters advocate, and what it means for businesses will follow. The Global Reporting Initiative (GRI) is proposed to enhance and augment TBL accounting. Finally,

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