Book Review: The Triple Bottom Line

So, what is the triple bottom line (TBL)? How does TBL relate to sustainability or to "green"?That's what the book, The Triple Bottom Line: How Today's Best-Run Companies Are Achieving Economic, Social and Environmental Success -- and How You Can Too, by Andrew W Savitz and Karl Weber, addresses.

The quick definition of TBL is economic, social, and environmental sustainability. Gunther Stent, Philosopher of Science, observed from his studies of discoveries and inventions through the centuries, that "many ideas are premature, but few are unique." The TBL, a term coined by John Elkington, is one such idea; business needs to take an accounting of, and is responsible for, the full range of its social, environmental, and economic outputs. In other words, people, planet, and profit need to be part of the equation of a business's success.

The authors address "green" versus "sustainable" and conclude "green" is both too narrow and overused term and abused concept. Sustainability encompasses the TBL, not just the environment. Since all three elements of TBL are entwined it's important to incorporate all three into any business plan and action. I am looking for a way of helping develop environmentally friendly hotels, and I think this is one idea that will help.

And what is sustainability? It's the art of doing business in an interdependent world. It's the common ground of business, the public and environmental interests. And the sustainability sweet spot is that common ground, where the pursuit of "profit blends seamlessly with the pursuit of the common good". This book helps you find ways to make both shareholder and societal interests overlap. And it is about conducting business in a way that benefits all players -- employees, customers, business partners, communities and shareholders -- at the same time.

But we need to go beyond the notions of being less bad through conservation and minimization, and of being more good through maximization or optimization. Adopting the cradle-to-cradle notion as outlined in the book by the same name means not wasting resources, it means using and reusing a resource, as done in nature. And optimization applies not just to natural resources and the environment, but also to people and their working and living environment; reduce accidents, improve air and lighting quality, and create a healthier and happier work environment.

Like every environmental book I've read, the hospitality industry isn't really addressed, though a tour company was an example of sustainable thinking, a model more businesses can emulate. Rather than put the burden on their clients to get to the starting point of the tour, often requiring car rental, they moved the starting point to the local train station and took the clients to the tour point from there. That solution made the tours more appealing to a broader group of people and reduced auto emissions from the number of cars rented to one bus; that's sustainable thinking.

This book isn't a doom-and-gloom look at what happens if you don't modify your business, your company, to adopt TBL, to be sustainable, though that message is interlaced through the book. This book is about how businesses that adopt the sustainability mind set and incorporate it into their business operations and planning are more successful than those that don't. It also shares ideas of how to do this, and how others have gone before you on this path. This reasonable and optimistic approach is quite pertinent today as we struggle with a flagging world economy, and with pressing environmental and social issues.

One of my favorite examples of a successful conversion to sustainable business is the story of negotiations between PPL (Penobscot Power and Light, based in Allentown, PA, and generating electricity in Maine) and the Penobscot Nation, environmentalists, fishermen, and government officials to address problems and issues with damming Maine's Penobscot River. It's a beautiful story of compromise, joint ventures, and caring. It's a great example of how corporate sustainability plays itself out in real life with real people. I imagine there are hotels around the world that can learn from this story to improve their standing in their community and to improve business.

The author challenges our comfort level of how we think about and conduct business. Most of us wouldn't knowingly hurt others in our dealings, but if we don't investigate where our supplies come from we may be doing just that. Harm comes from polluting the air, land and water through agricultural and manufacturing processes; it comes from putting young children to work in dangerous and sub-standard work conditions making rugs, fixtures, or even dismantling electronics; and it comes from bringing outsiders in to do work locals can do with proper training. We're challenged to not bury our heads in the sand but to examine what happens up- and down-stream from our hotels with the furniture, fixtures, equipment and staff we use.

The book's message is about conducting business in a way that benefits the people you hire, your customers and business partners, the communities, and your shareholders all at the same time. The message is conveyed by showing how interdependent our world is. Another way of looking at the message is calling sustainability the art of doing business in an interdependent world.

The claim that good business and sustainability are increasingly equated with each other, is substantiated by a quote of UBS' investment bankers: "Environmental performance indicators appear to be a good indicator of strong operational performance. Strong environmental indicators in the presence of below-average profitability may signal an investment opportunity in our view." You don't need to take my word for it, or even the authors' word for it, there seems to be concrete evidence based on performance indicators. Sweet!

I learned from The Triple Bottom Line that sustainable development must be an integral part of a hotel's core business, and works up and down the supply chain. As the authors expresses it, no-one will get away from doing something about it. Sustainability is easy to overlook or take for granted when the financial bottom line is often perceived as the only measure of success, but it's becoming a fundamental principle of sound management and can't be overlooked any longer. It's not overlooked by successful, far-thinking businesses. I also learned that even well run businesses, those with with years of success behind them and good intentions, can fall hard if they ignore the principles of sustainability.

So I now know that the TBL is an accounting method, one that's rising in use as more students are taught the principles. It's a way of thinking and running a business. It's a critical key to a business's success. I hope more hotels will adopt triple bottom line accounting and attitudes as they work toward renewed success in the years to come.