TRIPLE BOTTOM LINE: HISTORY, DEFINITION & OBSTACLES TO IMPLEMENTATION

Abstract

Triple Bottom Line (TBL) is a concept that emerged in the mid-1990s in the wake of the social awakening of business responsibility to the population and the planet. In other words, it is a proliferation of the topic of sustainable development which has since become ubiquitous and puts social pressure on the business community to consider and implement it. The philanthropy, sustainable development, corporate responsibility and social entrepreneurship have gradually become important topics in the field of business. In accordance with the social pressure and the new trends and movements in the field of the sustainable development, TBL requires that a business is sustainable when it balances economic, environmental and social goals, i.e. when organizational activities positively affect all areas of the TBL concept while not forgetting the profitability as an economic benefit. TBL is actually a balance between pursuing economic value, social goals and environmental protection by promoting environmental value. The multipolar identity of the TBL concept complicates its application because instead of profitability, which is an established criteria for measuring a success of a business, now we have additional two dimensions (social and environmental values) which require additional resources. In order to achieve this „triple-layered” balance, cooperation is needed among all stakeholders affected by the company’s activities, which consequently complicates its implementation because it targets a wider set of interests. Furthermore, balancing between the goals of the company and the needs of stakeholders is a kind of obstacle in its application to companies. The multipolar nature of TBL creates other obstacles and conflicts with the established economic milieu. The biggest obstacle for the implementation of TBL is the difficulty to quantify the social and environmental dimension in measurable indicators. In addition, a company that applies the TBL concept finds it difficult to focus entirely on all three dimensions of TBL and has to choose one dimension, in addition to the economic one, as a direction for its activities. Finally, the mobilization of financial resources of a start-up that aims at the implementation of TBL is problematic due to the established bias towards the measurability of non-financial results and many financiers, especially in conservative capital markets, do not see it as an investment opportunity.