2nd Aug 2022
By Dr. Antonius Alijoyo

The topic above is the rising trends and become the agenda of generations. Whilst no question about the importance of those agendas, what do we need to know in this respect? And what considerations need to be taken into account when we are making decisions and actions in the firm’s best interest? Such questions are critical, especially to the risk professional who must consider the aspect of sustainability in the organization’s decision-making process.

Let us start with some concepts and fundamentals that underlie the importance of sustainability. In this regard, United Nations (UN) say that sustainability meets the needs of the present without compromising the ability of future generations to meet their own needs. While so many other definitions and/or sayings about sustainability, they all converged on the understanding that sustainability deals with how to ‘avoid the depletion of our natural resources to maintain a balanced ecosystem and preserve natural capital.’

One word is underlined here “natural capital.” What does it mean? And why does it matter to us? Natural capital, in short, can be defined as the world’s stocks of natural assets, which include geology, soil, air, water, and all living things. From this natural capital, humans derive a wide range of services, often called ecosystem services, which make human life possible.

The most obvious ecosystem services include the food we eat, the water we drink, and the plant materials we use for fuel, building materials, and medicines. There are also many less visible ecosystem services such as the climate regulation and natural flood defenses provided by forests, the billions of tonnes of carbon stored by peatlands, or the pollination of crops by insects. Even less visible are cultural ecosystem services, such as the inspiration we take from wildlife and the natural environment

Nevertheless, if we talk about sustainability, it is about the interdependencies between the three things: environment, society, and economy. Talking about the environment takes place when we use to grow our food, the air we breathe, the water we drink, the soil we use, and the energy we consume. Talking about society takes place when it comes to making decisions amongst individuals and the interaction amongst individuals and groups in towns, villages, and particular organizations. And when we think about the economy, we think about the efficient allocation of scarce resources in response to our unlimited wants.

All of the above concepts and thrusts are then encapsulated into a calling about the new concept founded in 1994 by social entrepreneur John Elkington to measure and evaluate a business’ increasing interest in climate and social justice. Put simply, the triple bottom line (TBL) uses the power of three – people, planet, and profit – to measure the health and quality of a business impact. Twenty-five years on, it has given rise to a plethora of responsible business models, frameworks, and operational methodologies from Social Return on Investment (SRoI) to Environmental, Social and Corporate Governance (ESG), as well as proving an early inspiration for the rise of the sharing and circular economies.


How do triple bottom lines work, and what are the business benefits?

A business that operates using the TBL philosophy, therefore, not only measures the worth of its output using these ‘3 Ps’ but also – crucially – constructs and executes its short-and long-term business goals around them. It’s commitment, for sure, but the benefits of implementing a triple bottom line are threefold:

  • Firstly from a ‘people’ perspective, companies that place equal importance on all three categories enjoy stronger, more cohesive teams, improved recruitment, higher employee morale, and increased brand loyalty than those run from a profit-first one.
  • Secondly, when you treat the environment as an equal stakeholder, the planetary benefits are clear for all to see; the rewards are evidenced in the long-term sustainability of both our natural and business ecosystems.
  • And finally, a business that practices what they preach and embeds the TBL framework into every aspect of its models enjoys a range of financial boosts – and often significant cost savings, too. The World Wildlife Fund’s 2013 report ‘The 3% Solution’ put the potential monetary gain of curbing US carbon emissions by 3% at $780 billion a year. In many countries, government and state financial incentives exist for implementing environmentally-friendly business practices.

It is important to remember that because of the co-dependence between the three ‘bottom-lines,’ making improvements in one area will nearly always positively impact your efforts in another – and is why the TBL is often referred to as a ‘win-win-win’ business strategy. And with that in mind, TBL thinking should be applied to strategic decision-making in every aspect of your business. As such, it requires both buy-in and action from stakeholders at all levels — from suppliers to the shop floor. Practically, departmental heads and executives will need to ensure that all measures of success are tied to the overarching people-planet-profit objectives. On a truly granular level, personal performance and employee development goals must also be reassessed in confluence with the new sustainability criteria.

To summarize, using the language of tech: a triple bottom line framework works best when embraced as a new operating system rather than a patch add-on.


Dr. Antonius Alijoyo

Founder of Center for Risk Management and Sustainability Indonesia