Sunday, January 20, 2013

The Triple Bottom Line
From TriplePundit via kwout

At the recent GreenFaith retreat, we visited a number of sustainability projects in the city of Philadelphia.  At one point, one of our guides mentioned the phrase "the triple bottom line" and showed a diagram like the one on the left (except that I think the bottom circle said "Prosperity" rather than the more unambiguous "Profit").   "Our building was designed for the triple bottom line", the guide said.

It is dangerous to show a Venn diagram to a mathematician.  Because s/he is going to start wondering what each of the eight regions in the diagram actually denotes.  In my case I started wondering about the bottom part of the bottom circle - the region that denotes "prosperity" (or "profit") but NOT "people" and NOT "planet".

What, in heaven's name, could be in there?   What kind of "prosperity" could there be that is NOT prospering any actual people and is NOT nurturing the planet either?

(Yea, maybe the answer is "the kind that a lot of us spend a lot of effort pursuing".  But I think it would be better not to call that "prosperity" at all.)

If we want to do an "end-product analysis" (a phrase I learned from David Ehrenfeld's Arrogance of Humanism) of our building or company or life-project, I think it would be better to ask a double question: how did we prosper people and nurture the planet?  The question, Did we make a profit?, seems to be a question on a different level - a question about the means to our goal, not a goal in itself. 

To be fair, some of the writing that I have read about the triple bottom line suggests simply that a company or institution should present three sets of "annual accounts" - a "people" and a "planet" balance sheet to accompany the accountant's usual financial version.  These three sets of accounts would provide a three-dimensional perspective for stakeholders on the institution's activities, but would not attempt to combine them into a single "bottom line" figure.

Once all an institution's activities are summed up in a single "bottom line" figure, the stakeholder's ethical duty seems to become clear - to maximize that figure. (This may even be a legal duty in the case of a corporation - see the famous case Dodge v Ford where the court ordered Henry Ford to pay a dividend to his shareholders rather than to reinvest his profits for the benefit of the workers.)  In fact, though, ethical choices are concealed in the construction of the single figure.  The "triple bottom line" makes explicit the landscape of the investor's choices - s/he can no longer outsource ethics to the accountants.

That is rather different, though, from using the phrase in a way that suggests that we can somehow "have it all" - planet, people, and profits - if only we look at things in the right way.

1 comment:

John Roe said...

This is relevant:

Scientists propose a new architecture for sustainable development.

“As the global population increases towards nine billion people sustainable development should be seen as an economy serving society within Earth’s life support system, not as three pillars,” says co-author Dr. Priya Shyamsundar from the South Asian Network for Development and Environmental Economics, Nepal.