3BL Organisation(Triple Bottom Line)

Social and environmental objectives have a more increasing impact on companies’ market capitalisation and economic performance.

Business Executives know it is more critical than ever to develop an organisation that is capable of pursuing and achieving Triple Bottom Line management objectives (economic, social and environmental).

Is your organisation capable of effective Triple Bottom Line management?

Triple Bottom Line Objectives

Continuously sustain the margin growth rate, whilst maintaining social license to operate, and reducing the environmental impact and waste of resources, generated by a company’s value chain.
secure
social
bottom line
People
Sustain
Maximise
economic
bottom line
Profit
Sustain
secure
Envirinmental
bottom line
Environmental

Challenges for Triple Bottom Line

Modern companies are under ever-increasing pressures and challenges to while deliver Triple Bottom Line results. Some of the most critical challenges are highlighted here, by Senior Business Executives interviewed by En-Sync 8020:

Social

Economic

Environmental

Bottom Line
  • Growth in governments’ regulations and involvement
  • Increased social power of employees and communities
  • Increased social mobility
  • Slow pace of changes in educational systems
  • Growth of social media
Bottom Line
  • Growth of economic nationalism
  • Increased market volatility
  • Undergoing value chain transformations (for example, digital transformation)
  • Rise in consumer influence
Bottom Line
  • Time for circular economy is approaching fast
  • Tougher environmental regulations
  • Increased environmental awareness

Change in “the Purpose of a Corporation”

Under these “ever-increasing” challenges CEOs are required to change their view on why corporations exist.
As a result, the Business Round table announced recently a new purpose for corporations by issuing a brief, meant to lead the actions of other companies to change:

From 1970’s defined purpose

“The paramount duty of management and of boards of directors is to the corporation’s stockholders. The interests of other stakeholders are relevant as a derivative of the duty to stockholders.”

The new purpose of a Corporation

“…Creating value for customers, investing in employees, fostering diversity and inclusion, dealing fairly and ethically with suppliers, supporting the communities in which we work, protecting the environment…”
Published by the Business Roundtable, Aug. 19, 2019
Creating value to our customers
Investing in our employees
Dealing fairly and ethically with our suppliers
Supporting communities in which we work
Generating long-term value for shareholders
Organisational capability matched for every strategy and does not have gaps
What actions must be taken to deliver on the modern purpose of a corporation?

Triple Bottom Line: Key Indicators

First question for companies to answer: “Do we have tools to measure, monitor, analyse and report all three key indicators of Triple Bottom Line Management?”
To have an understanding of how effective companies are in their attempt for triple bottom line management, the following three key indicators are to be measured quantitatively, tracked, analysed and reported regularly:

Social

Economic

Environmental

Bottom Line
Social License to Operate:
Positive intention of social license holders to support business objectives
  • Employees
  • Local and Federal Governments
  • Communities
  • Political Parties
  • Unions
  • NGOs
Bottom Line
Net income after all expenses:
Enacting strategies to increase revenues (volume of outputs, productivity)
or decrease expenses
  • Employees
  • Local and Federal Governments
  • Shareholders
  • Management
Bottom Line
Environmental License to Operate: Positive intention of environmental license holders to support environment objectives
  • Employees
  • Local and Federal Governments
  • Communities
  • Political Parties
  • Environmental NGOs

Triple Bottom Line Organisation

Organisation can be considered as capable of effective Triple Bottom Line Management, if the following minimum required 3BL conditions are manifested for economic, social, environment:
Company has strategic objectives / strategies
Three types of strategic objectives / strategies that are equal level of complexity
Three types of strategies where the level of complexity that matches business complexity
Three types of strategies equal level of organisational capability to support their delivery
Organisational capability matched for every strategy and does not have gaps
En-Sync 8020 has the methodology to evaluate the 3BL conditions and their level:
Evaluate the quality of three types of strategies and their cascading down organisational levels
Measure the complexity level of three types of strategies
Measure the complexity level of a company and its business / value chain
Define the composition
of organisational capability for all three types
of strategies to be delivered effectively
Evaluate the
maturity / quality /
effectiveness of
organisational capability to support three types
of strategy

Triple Bottom Line Organisational Capability

En-Sync 8020 defines the following 4 critical criteria to evaluate an organisation’s capability to perform triple bottom line management effectively and deliver triple bottom line strategies:
Systems
Structure
Staff
Culture
Hierarchy of work to deliver three types of strategy
Hierarchy of roles and role relationships accountable and authorised for the work
Capability of role holders to deliver the work required by three types of strategy effectively
Positive intention of the employees to comply with a set of triple bottom line values & behaviours set
by the company
Standard Gaps in Triple Bottom Line Organisational Capability
One or all three types of strategy is not standardised or does not match the complexity of the strategies
Gaps in accountabilities and accountabilities for the work required to be performed to deliver one or all three types of strategy
The accountable role holders level of capability does not match the complexity level of required work to be performed in one or all three types of strategy
Employees of the company do not have positive intentions to comply with triple bottom line values and behaviours set by the company

Why is Organisational Capability for Triple Bottom Line important?

A company’s market capitalisation can be impacted even more by environmental issues and poor social license to operate than just the economic performance of the company.

It’s the recognition that modern businesses realise its critical to achieve and deliver on the new purpose of a corporation. It requires companies to define the work at the required level of complexity on all three bottom lines:

Would you like to assess your company’s organisational capability to manage triple bottom line?
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