GRADUATE SCHOOL OF BUSINESS AND GOVERNMENT LEADERSHIP
BLCG 511 CORPORATE GOVERNANCE
1.1. INTRODUCTION
During the Mid-1990s, John Elkington strove to measure sustainability by encompassing a new framework to measure performance in the corporate world. This framework was called the "Triple Bottom Line (TBL)".
The Triple Bottom Line is an accounting framework that integrates three elements of performance, which are: social, environmental, and financial. The TBL requires corporations to focus not just on the economic value they add (as per traditional reporting frameworks), but also on the environmental and social value that they may be adding or destroying. The TBL elements are also commonly called the three P's, namely, People, Planet and Profit.
1. 2. HISTORY
The expression "the triple bottom line" was initially authored in 1994 by John Elkington, the organizer of a British consultancy called Sustainability. His contention was that organizations ought to get ready for three diverse bottom lines. One is the customary measure of corporate profit"the bottom line" of the profit and loss account. The second is the bottom line of an organization's "people account," a measure in some shape or type of how socially responsible an association has been all through its operations. The third is the bottom line of the organization's "planet account," a measure of how environmentally responsible it has been. The triple bottom line (TBL) in this way comprises three Ps: profit, people, and planet. It intends to quantify the financial, social, and environmental performance of the company over a timeframe. Only an organization that delivers a TBL is assessing the full cost required in doing business.
Elkington (2004, p. 3) describes the triple bottom line as "an inevitable expansion of environmental agenda" that "focuses corporations, not just economic value that they add, but also on environmental & social value they add or destroy". Dutta (2011) pointed out the necessity of considering the three parameters People, Planet, and Profit (3Ps). According to him TBLR reflects a more comprehensive mechanism that integrates the traditional financial information along with non-financial information, which can help firm in enhance economic value addition, besides putting it on a firm financial footing. At its narrowest, the term "Triple Bottom Line' is used as a frame work for measuring & reporting corporate performance against economic, social and environmental parameters' (Elkington J. , 1980, The Ecology of Tomorrow's World). All the believers advocate it as forecasted and a sustainability initiatives. They argue that triple bottom line undoubtedly makes a firm environmentally responsible but in reality the firm doesn't have to do anything with environment. Elkington (1997) "An approach of measurement of sustainability is triple bottom line". Adam et al (2004) said "both the timing and terming of introducing the triple bottom line h...