Usually when people refer to the ‘bottom line,’ they are referring to economic elements, usually success in terms of profit. When Andrew Savitz and Karl Weber discuss the bottom line, they address it in terms of three elements – economic, of course, but also in terms of social and environmental successes. Their main argument in the book The Triple Bottom Line is that a company’s sweetest spot is where its financial interests intersect with its social and environmental interests. This intersection is where sustainability occurs: a company is able to meet its financial, social, and environmental responsibilities in a balanced way, addressing the concerns of multiple stakeholders while still able to make a reasonable profit. The purpose of this report is to explore Savitz and Weber’s (2006) book to highlight and summarize the main points which support their argument as well as to present the author’s reflection and reaction to reading The Triple Bottom Line.
The book is divided into two parts, one focusing on what the authors refer to as ‘the sustainability imperative’ and the other focusing on how the reader – and therefore by extension the reader’s business or organization – can make sustainability work for them. Each part contains seven chapters which tackle different aspects of these two overarching topics. Throughout the book Savitz and Weber (2006) present case studies of companies that have successfully applied these principles as well as those companies that have not so successfully engaged in the triple bottom line. In fact, the authors begin the book with a look at the Hershey Foods company and how its announcement in 2002 to sell the company caused an uproar, with emphasis on the elements of financial, social, and environmental elements. Savitz and Weber’s (2006) presentation and analysis of the case offers an excellent example of how failing to consider the triple bottom line – that is, when a company only looks at the financial bottom line – has far-reaching ramifications.
The first part of the book, which focuses on the sustainability imperative, outlines how social and environmental elements are more critical to the economic success of an organization, though they may not appear so critical on the surface. It is, contrary to popular belief, possible to make money and still serve the common good, according to the authors. They emphasize the importance of accountability and how important it is a guiding principle for carrying out business of any sort. They also acknowledge and describe the criticisms of sustainability, attempting rather effectively to address the concerns of skeptics and the cynics. The first part of the book closes out with a study of the Penobscot River and how the financial and ecological considerations that surrounded its use were balanced to meet the needs of the economy, larger and local (financial); the Penobscot Indian Nation’s concerns (social and environmental); and the needs and wants of individuals like fishermen and other outdoorsmen (social).
The second part of the book, which focuses on applying the authors’ principles of sustainability, looks at practical applications of those principles and how they translate to business practice. They begin with a discussion of assessing one’s current practices to determine the organization’s strengths and weaknesses in terms of those sustainability principles. Then they focus on formulating business strategies and plans that reflect the sustainability principles – not just in a policy sense but in an actual, day-to-day practice way, too. They also provide guidance and strategies relating to implementing and executing sustainability programs and practices. Two chapters focus on the issue of stakeholders and addressing their concerns. One chapter focuses on ways to engage with stakeholders and get their buy-in. The other chapter provides guidance and strategies for addressing special concerns that will emerge from the stakeholders. The authors also spend a chapter discussing how an organization can assess and measure the success of their sustainability initiatives to make sure they remain on track. The final chapter discusses the importance of promoting and cultivating a culture of sustainability beyond business practice. The epilogue discusses the notion of sustainability in a more philosophical sense and how it continues to evolve today.
Though this book is a decade old now, much of what Savitz and Weber emphasize and discuss in terms of sustainability still apply. Their emphases on accountability and responsibility are issues still being discussed, though it is often discussed in terms of corporate (social) responsibility and community engagement. Their book is a great example of what happens when business organizations only focus on profits, only on the financial bottom line, and what kind of damage such practices can do. Sure, they may enrich themselves, but they do damage to their reputation and brand; they do damage to their relationships with their stakeholders; and they potentially do irreparable damage to the environment. What’s the point of being super rich if the environment is wrecked, and no one can live in it? However, practically speaking, companies do have to make a profit in order to improve and enhance their products and/or services, and take care of their responsibilities to their many stakeholders, from employees to partners to customers and beyond. But they can meet these obligations in ways which take into serious consideration, in a meaningful way, social and environmental concerns.
While the profits may not be as good, taking care of their social and environmental concerns builds good will with stakeholders, such as community members and people affected by the local economy (a consideration Hershey forgot in 2002), while also offering protection to and investing in the ecological health of the planet. While the money is not always great, balancing all of these consideration can enhance the company’s reputation and opportunities.