What does the term "triple-bottom line" refer to?

The term "triple-bottom line" refers to a framework that assesses an organization's commitment to social responsibility, environmental stewardship, and economic performance. This concept goes beyond traditional financial metrics to evaluate a company’s impact on society and the environment, alongside its profitability.

The "triple-bottom line" is often symbolized by the three P's: People, Planet, and Profit. This approach encourages businesses to consider their influence on various stakeholders, including employees, communities, and the environment, as part of their operational strategies and decision-making processes. It promotes the idea that a successful business should balance economic growth with a positive impact on people and the planet. Thus, the emphasis is on sustainability and the ethical implications of business operations.

This concept significantly contrasts with a purely financial focus, which limits performance measures to financial performance, neglecting social and environmental factors. It also differs from strategies that emphasize profit maximization alone, which may result in neglecting social and ecological responsibilities. Additionally, the triple-bottom line is not a report format for financial disclosures, which typically centers around financial performance and compliance with regulations rather than encompassing broader social and environmental considerations.