Loading

Module 1: Introduction à la viabilité de l'entreprise

Notes d'étude
Study Reminders
Support
Text Version

Récapitulatif de la leçon

Set your study reminders

We will email you at these times to remind you to study.
  • Monday

    -

    7am

    +

    Tuesday

    -

    7am

    +

    Wednesday

    -

    7am

    +

    Thursday

    -

    7am

    +

    Friday

    -

    7am

    +

    Saturday

    -

    7am

    +

    Sunday

    -

    7am

    +

Introduction to Sustainable Business

The Triple Bottom Line

What is the Triple Bottom Line?

Ideally, the sustainable business seeks to have a positive social impact, environmental impact, and economic impact. Taken together, a business’s contribution to social justice, environmental quality, and economic prosperity is collectively referred to as the triple bottom line.[1]

The triple bottom line (social, environmental, economic) is sometimes referred to as people, planet, profit.

This approach to business will be increasingly relevant to students of business and in other fields as global populations and demand for energy, water, and other resources increase and our planet faces resource shortages.

The Triple Bottom Line

Dimensions of a Sustainable Business

Rethinking the business in terms of its triple bottom line impact and performance (social, environmental, and economic) is critical in establishing the foundation for sustainable business. This requires a shift away from thinking of a business only in terms of its financial profit to shareholders.


While financial profit is necessary for survival, the sustainable business applies a broader view of the business, its responsibilities, and its performance. Therefore, the sustainability of business is discussed in terms of three interrelated and interconnected dimensions: social, environment, and economic.

The Triple Bottom Line


Focusing on the Triple Bottom Line

For businesses that consider TBL and sustainable business practices, it is increasingly not about deciding whether to focus on (earning) profits, or (saving) the planet, or (caring about) people. Instead, it’s about focusing on all three.

In the longer term, all businesses rely on the sustainability of societies’ resources, including energy, food, and material resources, for their success and survival. Thus it can be in all businesses long-term interest to act with concern for the sustainability of society’s resources.


The Triple Bottom Line

McDonald’s

Reducing Costs
When McDonald’s uses less packaging for their hamburgers, French fries, and other food items than in the past, this reduces their costs of materials and disposal costs while at the same time it helps the environment. Reducing packaging is an example of a sustainable business practice that can benefit a private company and also society at large.

Helping Others
When McDonald’s reduces the packaging with their food, they help the environment, contribute to public health (by reducing toxics in the atmosphere), and they also help their economic bottom line. Enlightened self-interest occurs when companies (or individuals) help others and, in the process, help themselves.

Gulf Oil Spill

What Happened
The 2010 Gulf of Mexico oil spill-the disaster that quickly became the largest oil spill in US history [2] -offers a vivid example of how sustainability issues affect profits, people, and planet. The spill (as of June 2010) was estimated to have leaked at least triple the amount of oil as compared to the Exxon Valdez spill in Alaska during 1989.

Oil Spill in the Gulf of Mexico
Credit: Jeffrey Warren, Grass Roots Mapping project, via Wikimedia Commons.

Mistakes/Lessons
BP could have at some short-term cost avoided the Gulf oil spill. Instead, the company chose not to put in place some safety features and then delayed responding to signals that there were problems in the pipeline, which resulted in a major pipeline break with catastrophic implications for the environment and significant economic costs to the company. From when the drilling rig exploded on April 20 through June 2, 2010, the company lost a third of its market value, or about $75 billion, and the company had spent almost $1 billion on cleanup efforts. One analyst calculated that in a worst-case scenario, BP’s cleanup liability would be around $14 billion, which would account for the entire loss of all fishing and tourism revenues for coastal states closest to the spill.[4]

The BP Gulf of Mexico situation highlights why sustainable business is of increasing interest and importance to students of business and also students in science, government, public policy, planning, and other fields.




Effects
BP put itself into a very difficult and controversial position. BP had a history of accidents that were harbingers of the Gulf spill, including having to pay $25 million in fines for a spill on the north shore of Alaska in 2006. Then in 2010 under financial and time pressure, BP failed to properly cap it’s Gulf Coast well from which they had been drilling. BP hastened through procedures to detect excess gas in the well, skipped quality tests of the cement structure around the pipe, and even assigned an inexperienced manager to oversee final well tests.[3]

While most of the company’s actions were not best practices, they were within acceptable industry standards and believed by many to be legal. The oil released from the uncapped well threatened the valued ecosystem of the Gulf in very serious ways. The oil adversely impacted populations of fish, marine birds, and other aquatic wildlife and threatened fragile wetland ecosystems.

Bibliography


[1] Elkington, J. (1997). Cannibals with forks: The triple bottom line of 21st century business. Oxford: Capstone.
[2] “Estimates Suggest Spill Is Biggest in U.S. History,” New York Times, May 28, 2010, http://www.nytimes.com/2010/05/28/us/28flow.html?ref=us.
[3] “BP Decisions Set Stage for Disaster,” Wall Street Journal, May 27, 2010, http://online.wsj.com/article/SB10001424052748704026204575266560930780190.html?KEYWORDS=It+was+a+ difficult+drill+from+the+start.
[4] Jad Mouawad and John Schwartz, “Cleanup Costs and Lawsuits Rattle BP’s Investors,” New York Times, June 1, 2010.



The Triple Bottom Line

Untitled Slide
End of Unit:
Click Next to proceed to next Unit.