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Ethical business 101: what is the triple bottom line and why it matters

Originally introduced in the 1990’s, the triple bottom line for ethical business practices has become more and more mainstream over the years, especially in the largest and fastest-growing businesses around the world. The goal isn’t to constrain or hamper profit, but to encourage it by realizing that factors like people and planet can directly feed profitability and provide evergreen support for the business long term.

The standard business model focuses mainly on profit with little concern for anything else. Think of the tycoons of the nineteenth and early twentieth centuries like Rockefeller and Carnegie. They are huge names in business but were often thought of as villains, especially by those who worked for them under some of the poorest conditions in history, only a sliver above slavery.

That ruthless business model has become obsolete, yet many businesses still drive themselves toward a bottom line concept that focuses only on profit. As a result, businesses are in a constant struggle with suppliers and retailers who can be just as cutthroat if not more so.

At some point in the middle of the last century, savvy professionals realized that people were the backbone of business, and increasing morale and quality of life for those individuals had a direct impact on their profits. Happier businesses not only make more money, but they never want for employees.

The practical upshot is lower training costs and less employee turnover, which add to the profit margin. Who would have thought that investing in your people would lead to more revenue?

The idea continued to evolve to include the third P of the triple bottom line: planet. By helping to maintain environmental integrity many costs can be reduced down the line, and this means less waste and more money in the bank.

Unfortunately, people and planetary impact aren’t as easy to measure compared to a typical P+L statement, but understanding how they influence the strength of a company and acting on that knowledge can enhance a company’s profile and drive higher profit margins. This is why the triple bottom line is important.


This isn’t about base pay, it’s about quality of life and overall morale. Happy employees don’t need to be replaced as often, and there are many ways to facilitate this.

Obviously, pay is the first thing that comes to mind. Again, it’s an easy metric to measure, and thus makes sense on a P+L statement, but what about everything else? People don’t work only for money, but as a fit to their daily life.

Safety is a big concern for manufacturing environments, and oddly enough some of the worlds largest manufacturers have the best safety records. Oilfield work is dangerous, but more workers die in traffic accidents than at the actual job site every year. So what did the oilfield do? They started mandating defensive driving courses for their employees and paying for them.

Driving Productivity and Morale from Within

The trick with developing a happy workforce is going outside the office and doing something to enhance the whole life of the employee, not only the eight hours they are in the office. Sometimes it doesn’t cost anything other than sitting down with someone to discuss a personal problem they are having at home with compassion and empathy.

Of course salary does make a difference. Why do a dangerous job when you could get a dollar more per hour to push carts at Walmart?

There are lots of ways to take care of your people, but one of the best comes down to training. Employees who are given time and mentorship to learn a skill are going to be happier than those that must wing it until they get good enough to stop being corrected.

Another popular trend in big business comes directly from fraternal ideas, where the work force thinks of themselves as a family, and they work for each other. Pride in their work stems from being part of something bigger, a safety culture leads to less downtime and loss, and small award programs can enhance these efforts in a huge way.


It’s quite chic to be environmentally friendly, and as a result, most business owners think of this as an added expense to keep customers happy, but ultimately not something that affects the bottom line very much.

The fact is that some of the biggest corporations in the world would focus on environmentally friendly business practices whether their customers care or not. Sustainable practices affect not only your customers’ feelings, but also the future of your company.

The simple fact is the more support that your company gives to sustainable resources, the more stable it is to fluctuating market conditions.

People are going to continue using plastics forever. Buying plastic for manufacturing from a recycling supplier rather than a petroleum company can help to sustain your source material no matter what happens. Whether the price of oil goes up, plant-based plastics get a poor harvest, or the government shuts down some avenue of the plastic supply industry, there will always be waste generated and the cost moves at a much slower rate.

This is simply one example. Choosing your suppliers and the people who handle your waste products carefully can have a huge impact, not only on the future of your company but the health of the planet, and at the same time, your customers will endorse your ethical business practices and turn into walking billboards for your products.

This is why measuring the costs versus the profits from sustainable business practices can be so hard to measure. If you can recycle some of your waste for reuse in house or make a secondary product with it, you will be even better off and those profits are easier to see. Gasoline, bran, cornstarch: all of these byproducts were waste that was resold as its own material and became new industries themselves.

Even if you can’t see the immediate impact, the consequences are still there. Sustainable, earth-friendly, and green business practices may carry unforeseen positive consequences for your company twenty or fifty years down the line.

By dealing directly with other Eco-friendly companies through the course of doing business, you are helping to establish a better future and more robust supply chain that will insulate your company better again whatever the future brings.

So What is the Triple Bottom Line?

It is the grand synthesis of all of these ideas working together synergistically to enhance profit, reduce environmental footprint, and raise morale to the point where turnover becomes nearly zero. It helps your employees, your planet, and your revenue at the same time when done right.

Conclusion: Why is the Triple Bottom Line Important?

In short, focusing on a more holistic triple bottom line will increase the happiness of your employees, the robustness of your supply chain, the available market you have to sell to, and the longevity of your company. Profit is still a part of the triple bottom line, but by including the rest of the triangle, your company will thrive and grow better and faster than the competition who have to spend extra on employee retention and environmental fines while falling victim to fluctuating markets.

Further reading:

Latest tips and advice for green businesses

Our fresh list of 100+ green business ideas

Interviews with green business owners.

Check out our resources library.

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