The Triple Bottom Line

Companies pursue operational efficiency through detailed monitoring of their bottom line – that is, how much money is left over after all the bills have been paid from revenue generated from the sale of their product or service. As a testament to how seriously companies are now taking their social responsibility, many companies now seem to have adapted their own annual reports to reflect a triple bottom line approach, where they provide social and environmental updates alongside their primary bottom line financial performance.

To some degree, there is an aspect of The Emperor’s New Clothes attached to the triple bottom line approach. While it may be easy to support the idea of organization’s pursuing social and environmental goals in addition to their financial goals, there has been no real evidence of how you would measure such achievements. If one subscribes to the old management adage that “if you can’t measure it, you can’t manage it,” the challenge of delivering on any triple bottom line goals becomes apparent.

So, if you can’t measure it, can you really at a bottom line for it? It would appear that many companies are taking a fairly opportunistic approach in adopting the terminology with following through on the delivery of a consistent methodology. Perhaps if one is seeking to make amends for prior transgressions, the “feel good” terminology associated with the triple bottom line approach can make a convincing case. Consider the following from Coca-Cola’s 2004 Citizenship Report.

Our Company has always endeavored to conduct business responsibly and ethically. We have long been committed to enriching the workplace, preserving and protecting the environment, and strengthening the communities where we operate. These objectives are all consistent with – indeed essential to – our principal goal of refreshing the marketplace with high-quality beverages.

Yet, Coca-Cola has its problems. Nice words on paper - but are they followed-through with actions? Coca-Cola has been presented with several complaints over the years. For example:

• Bio-solid waste disposal in India, where the complaint alleged that bottling plant sludge containing high levels of cadmium and other contaminants were distributed to local farmers as fertilizers.
• Pesticides were found in Coca-Cola products in India and in excess of local and international standards.
• In Columbia, its bottler’s union claims repeated incidents with its members at the hands of Coca-Cola officials – threatening and harming union leaders and potential members.

Clearly, it may be easy to make a public commitment to corporate social responsibility, but actually delivering on that commitment to the satisfaction of customers and society can be much harder to achieve.