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?
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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.
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:
- Growth in governments’ regulations and involvement
- Increasing social power of employees and communities
- Increased social mobility
- Slow pace of changes in educational systems
- Growth of social media
- Growth of economic nationalism
- Increase in market volatility
- Undergoing value chain transformations (for example, digital transformation)
- Rise in consumer influence
- 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?
Contact usTriple 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 License to Operate:
Positive intention of social license holders to support business objectives
- Employees
- Local and Federal Governments
- Communities
- Political Parties
- Unions
- NGOs
Net income after all expenses:
Enacting strategies to increase revenues (volume of outputs, productivity)
- Employees
- Local and Federal Governments
- Shareholders
- Management
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:
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 levelsEn-Sync 8020 has the methodology to evaluate the 3BL conditions and their level:
Measure the complexity level of three types of strategiesEn-Sync 8020 has the methodology to evaluate the 3BL conditions and their level:
Measure the complexity level of a company and its business / value chainEn-Sync 8020 has the methodology to evaluate the 3BL conditions and their level:
Define the composition of organisational capability for all three types of strategies to be delivered effectivelyEn-Sync 8020 has the methodology to evaluate the 3BL conditions and their level:
Evaluate the maturity / quality / effectiveness of organisational capability to support three types of strategyTriple 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:
Standard Gaps in Triple Bottom Line Organisational Capability
Standard Gaps in Triple Bottom Line Organisational Capability
Standard Gaps in Triple Bottom Line Organisational Capability
Standard Gaps in Triple Bottom Line Organisational Capability
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:
