”Triple Bottom Lines” for Companies

Some businesses make lots of money while doing really bad stuff, such as exploiting people and causing pollution. Some businesses make lots of money while doing some good things, often by having some kind of foundation linked to the company. And some businesses make money by doing good things, such as Ecotricity, for example. This last category is what I want to write about today.

Companies that create economic value not just while but actually by creating social and environmental value.

I’ve been reading the New Economic Foundation’s (nef’s) report called The Great Transition (free to download) which has this idea as a central principle. They write that we need to undergo a ‘great revaluing’ which would make the prices of goods and services reflect their true costs and benefits. This at the moment is not the case. As you will be well aware, environmentally and socially responsible items are often much more expensive than ‘orthodox’ damaging alternatives. A good example is organic food being more highly priced than non-organic. After such a revaluing, the price of paying fair wages and either preventing or clearing up any pollution and attending to other side effects of production would be factored into the price… So ‘’good’’ goods and services would end up being cheaper than ‘’bad’’ ones. This would completely change everything. It would make the good choice the easy and normal choice.

Coming back to business, did you know it is actually corporate law that companies must place generating profit for their shareholders above anything else? Nef thinks that instead of sole focus on the bottom line, companies should have to produce value across a ‘’triple bottom line’’. That is, across the environmental, social and economic sectors. That way making money would still be important but it would be one of three main objectives. Or, another way of looking at it would be that a company’s main objective is to create social and environmental value, and that money is what they get as the reward for doing their job effectively.

Imagine that?!

After being unemployed for ages, I’m now working full time in a local vegetarian café and saving up for uni. The reason I’m telling you this is so I can comment on how much I like the feeling of camaraderie that comes from being part of a team and collectively getting something done. Of course that relates to any form of organized action, but there’s no denying that business is definitely a powerful and impressive feature of society. Through businesses, things are achieved that would never of been if just left to a bunch of individuals. I mean, it’s a part of evolution and a pre-requisite to civilization, isn’t it, to specialize and organize each other and make bridges and hospitals and art galleries and everything. And although it’s easy to criticize power and money (especially when you have little of either) it is astonishing how they motivate a group of people and cause them to work as an efficient team.

My point by all this is just that business is a powerful tool, and it’s my school of thought that powerful tools are best ‘’put to good use’’ and certainly not fought against or anything tiring and pointless like that. In the world today there are hugely destructive businesses that could easily be blamed for many problems in this world, and there are also many inspiring innovative and positive businesses to be happy about. I’m inspired by nef’s vision and hope that in my lifetime I will live in a society where businesses have to take a triple bottom line approach… Where every year they showcase their achievements across the environmental, social and economic sectors. Where co-operatives are common and employees are often shareholders of the companies they work for. Where companies are heavily fined if they cause pollution and the money is used to clean it up. (Meaning it’s better for them to not do it at all). Where prices of stuff in the shops reflect the true prices, so the most ethical products are the cheapest ones. Where local businesses are crucial assets to their communities and supply quality jobs and training schemes… And benefit the environment rather than ‘damage it as little as our budget allows’.

I hope to see all these things come to fruition, and as soon as possible! Wouldn’t it just transform things so amazingly if the best and easiest way to make money was by making a positive effect on your environment and society?

Things like this will only happen when the next wave of entrepreneurs, politicians and economists take the reins, and that’s us, isn’t it? So come on, let’s get down to business!



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