ACTIVITY 1

3BL AND CSR PYRAMID

Read articles on Triple Bottom Line and CSR Pyramid and answer the following questions in 5
good sentences.

1. What is John Elkington’s 3BL?

John Elkington’s 3BL is a sustainability-based accounting method that focuses on

people, profit and planet. This idea is when you improve any one area; you will improve the
business as a whole.

● People. The effect of businesses on human capital is gauged by this bottom line.
A business that adheres to the triple bottom line has obligations not only to its
shareholders but also to its employees, vendors, customers, the community in
which it operates, and anyone else the organization may have an impact on,
either directly or indirectly. It acknowledges the interdependence of every human
connection and interaction necessary for the business to function.
● Planet. Companies following the TBL model work to reduce their ecological
footprint. They recognize that a business can operate for a longer period of time
the less impact it has on the environment. It involves specific actions, such as
using renewable energy sources, reducing energy use, disposing of toxic
materials safely and adopting a host of green corporate policies.
● Profits. In this model, a company helps stimulate economic growth and create
wealth by compensating employees fairly, supporting local suppliers with its
business, generating innovation, and paying its fair share of taxes. It also makes
financially prudent but ethically driven decisions about how and where to source
materials, products or labor.

2. Why is Profit in the 3BL model changed to prosperity?

It was changed because it caused confusion as it was commonly taken as the

company's financial profit, which should only be a means not a goal in itself. The term prosperity
was not formally established as a refinement of the 3BL model, although it closely resembles
what Elkington had in mind with the economic effect. The term will help organizations grasp the
fundamental objective of the 3BL, which is to help organizations recognize that long-term
sustainability requires more than simply financial equity. It also helped to establish that when
firms considered what sustainability meant, it did not entail abandoning the concept of financial
success. The economy improves as a result of prosperity; businessmen consider not just their
profit, but also the welfare and benefit of their environment, the people, and the consuming
public.
3. Who are the “people” in the 3BL model and why are they important in CSR?

The people who are in the three bottom line models are namely the shareholders,
employees, vendors, customers, and communities. They play an important role in corporate
social responsibility because they have the ability to influence corporate management, such as
shareholders who expect and demand a reasonable return on their investments, employees
who want to do their jobs safely and fairly, and customers who want quality products at
reasonable prices. Corporate social responsibility is also crucial for suppliers, primarily to
improve internal and external transportation management, warehousing, inventory
management, acquisition management, logistics service provider management, resource
management, packaging and assembly, and customer services. Lastly, the communities play a
supporting role which can also improve the financial performance of a firm, reduce operating
costs, enhance brand image and reputation, increase sales and customer loyalty, and boost
productivity. Integrating these bottom line models keeps a firm to have less employee turnover,
more repeat customers, less disputes and more goodwill.

4. How does sustainability in business relate to the 3BL?

Adopting sustainability initiatives has been shown to drive business success in many
cases. In a capitalist economy, a company's success is largely determined by its financial
performance, or the profit it generates for shareholders. This is why many companies have
failed to achieve their objectives in the past. But now purpose-driven leaders are discovering
that they can use their businesses to make a positive difference in the world while still achieving
financial success. Firms have shifted their focus toward creating value for all stakeholders
impacted by business decisions, including customers, employees, and community members, as
they have increasingly embraced sustainability. The triple bottom line does not place a premium
on societal and environmental impact over financial profit. Instead, many businesses have
benefited financially by adopting sustainable business practices.

5. Why do you think Philanthropic responsibility is at the top and economic responsibility is at
the bottom of Archie Caroll’s CSR pyramid?

The point of the pyramid is to show the people the levels of responsibility of the business
and it is expected for them to fulfill each responsibility starting from the bottom. The reason that
the economic responsibility is at the bottom of the pyramid is because it represents the
foundation of the business and it is required by society. The economic responsibility of the
business or organization is to generate profit to support and keep the business going for a long
term and to support the expectations of the society. Without income the business will not be
able to complete its other responsibilities. On the other hand the philanthropic responsibility
occupies the top part of the pyramid it represents the company wanting to give back to the
community. The reason it is in the top is because philanthropy is not really considered as a
responsibility for the business to fulfill. However, today businesses are expected by people to
give back to the community. Businesses adopted several types of philanthropic actions such as
volunteer work, donations, and other contributions to the community.

Suggested sites
https://www.business.com/articles/triple-bottom-line-defined/

https://www.toolshero.com/strategy/carroll-csr-pyramid/