MULUNGUSHI UNIVERSITY

NAME: ESTER ZULU

STUDENT NUMBER: 202305666

PROGRAMME: MASTER OF BUSINESS ADMINISTRATION (GENERAL) MBA 1

COURSE: MANAGEMENT THEORY AND PRACTICE

COURSE CODE: MBA 811

SCHOOL: SCHOOL OF BUSINESS STUDIES SBS

LECTURER: DR. C. MWIIYA

ASSIGNMENT NO: 1

DUE DATE: 8TH AUGUST

QUESTION: Investigate the concept of the triple bottom line (TBL) approach, which considers
economic, social, and environmental factors in business decision-making. Specifically, you must assess
the benefits and challenges of adopting sustainable business practices and their impact on organizational
performance.
INTRODUCTION

The business success definition is evolving as the saying, “business as usual” now holds a new
meaning. It is no longer sufficient in the eyes of consumers, employees, and other stakeholders to
only meet compliance standards. Business leaders are recognizing the power of sustainable
business strategies in not only addressing the world’s most pressing challenges but driving their
firms’ success. Therefore, sustainability seeks to prevent the depletion of natural or physical
resources, so that they will remain available for the long term . Understanding and operating
through a triple bottom line framework offers opportunities for optimization, innovation, and
improvement across sectors and industries.

MAIN BODY

The definition of Triple Bottom Line is stated as, an accounting framework that incorporates
three dimensions of performance namely: economic, social and environmental. This differs from
traditional reporting frameworks which includes ecological (or environmental) and social
measures that can be difficult to assign appropriate means of measurement. We can also find a
similar definition in The Green Paper on Corporate Social Responsibilities (CSR), triple bottom
line is defined as the idea that the overall performance of a company should be measured based
on its combined contribution to economic prosperity, environmental quality and social capital
(Green Paper, 2001).

According to Andrew Savitz (2006), the triple bottom line “captures the essence of sustainability
by measuring the impact of an organization’s activities on the world which includes both its
profitability and shareholder’s values and its social, human and environmental capital.” What is
common among all of these definitions is an emphasis on sustainable development that is not
focused on only one goal.

However, a more extended definition comes from Krajnc and Glavic (2005), who explains the
triple bottom line as “the creation of goods and services using processes and systems that are
non-polluting, conserving energy and natural resources, economically viable, safe and healthful
for employees, communities and consumers, socially and systems that are non-polluting,
conserving energy and natural resources, economically viable, safe and healthful for employees,
communities and consumers, socially and creatively rewarding for all working people.
For an organization to perform it should adopt using the triple bottom (TBL) dimensions in their
business practices. This dimensions are considered to be the three “P’s” of people, planet, and
profit which ultimately lead to increased resilience and cost savings, decreased organizational
risk, a decrease in unforeseen costs, and overall success for all stakeholders involved. And the
3P’s are stated as follows; firstly, people which considers all stakeholders (versus solely
shareholders) including employees, communities within which an organization operates,
individuals throughout the supply chain, future generations, and customers just to name a few.
The connection with Corporate Social Responsibility (CSR) is central to this segment of the
triple bottom line. Which is defined as a responsibility among organizations to meet the needs of
their stakeholders and a responsibility among stakeholders to hold organizations accountable for
their actions.

Secondly, planet considers the relationship between an organization or business and the natural
environment and its ecological systems. Stakeholders are increasingly aware of not only the
consequences business activity can have on the environment, community, and economy, but also
of the importance of global issues, such as climate change and social justice. In fact, Climate
Change in the American Mind survey 2020, shows that “Nearly six in 10 (roughly 58 percent) of
Americans are now either ‘Alarmed’ or ‘Concerned’ about global warming. From 2014 to 2019,
the proportion of ‘Alarmed’ nearly tripled.”

Thirdly, profit considers the economic indicators over which an organization or business has
influence; for example, paying livable wages, ethical sourcing, and workplace health and safety.
The United Nations (UN) created Sustainable Development Goals (SDGs) 2022, ensures all
human beings can enjoy prosperous and fulfilling lives and that economic, social, and
technological progress occurs in harmony with nature. Many of the UN SDGs aim to improve a
wide range of areas related to environment, people, and economic opportunities.

The benefits of adopting sustainable business practices that have the 3Ps. (a) Leads to greater
satisfaction of employees meaning employees at sustainable businesses tend to be happier and
more engaged in their work, which leads to a more productive workforce and lowers employee
turnover rates. For example, the company might support worker unions or offer fair wages and

benefits to all employees regardless of their position in the company. (b) Sustainable businesses
are more likely to be socially responsible, which is vital for many reasons. For example, it makes
the company more attractive to consumers who want to support businesses that are helping
improve social conditions in their communities. (c) Governments will very likely impose more
regulations and mechanisms to factor in the environmental cost of business operations. One of
those is for example the carbon market where more virtuous businesses can trade carbon credits
with the less sustainable ones. The less environmentally friendly corporations are mandated to
offset their emissions by purchasing those credits. This creates an economic incentive for
businesses pursuing energy efficiency and a disadvantage for those who are not. (d) Banks and
investors are considering more and more ESG (environmental, social, and governance)
scores when deciding where to allocate funds. The result is that sustainable organizations will
have easier access to credit and investments to grow the business.

The challenges faced in adopting these sustainable business practice are factors such as; (a)
Youth unemployment and poverty remain major issues in emerging and developing nations
(markets). The ecological and resource sustainability are necessary for reducing poverty and
unless production practices and consumption habits improve increased food production will
speed up. (b) Companies will be more ambitious in the future about redefining what it means to
be devoted to diversity, equity, and inclusion (DEI). Instead, the corporation must incorporate
DEI principles throughout all operations, from sales to PR to HR. They should also refocus the
purchasing power. (c) A corporation must show a detailed view of a product's lifecycle from raw
materials to the point of sale. It is only possible to take significant action by mapping out what
must be done and where. Reestablishing trust for businesses can be done through transparency.
(d) One of the main sustainability issues in business is the need for accurate, improved, and
inclusive data. Because that describes and provides standing with equity and justice.

CONCLUSION

The impact Triple bottom line (TBL) has on businesses is that it helps in retaining employees,
increasing external investments, boosting sales from ESG (Environment, social & Governance)-
interested consumers, social responsibility and gaining long term operational efficiencies. Triple
bottom line (TBL) may also be difficult to measure, costly to implement and may cause
competing strategies across Triple bottom line (TBL) components. In conclusion, it is very
important for the modern business leader to be aware of the current trends regarding
sustainability and the coming technological innovations, allowing the organization to stay ahead
of the curve and benefit from the coming transformation.
REFERENCES

A., & Wang, X. (2020). Climate Change in the American Mind: April 2020. Yale University and
George Mason University. New Haven, CT: Yale Program on Climate Change Communication.
Gnap M, 2012, Triple Bottom Line = CRS, http://www.greenbizness.pl/zronowaony-
rozwojcsr10/od-greenbiznespl/2375-triple-bottom-line-crs.html.
Green paper – Promoting a European Freamework for Corporate Social Responsibility, COM
(2001) 366 final (July 18,2001).
Krajnc D, Glavic P, 2005, A model for integrated assessment of sustainable development,
Resources, Conservation and Recycling, vol. 43(2), p.191.
Leiserowitz, A., Maibach, E., Rosenthal, S., Kotcher, J., Bergquist, P., Ballew, M., Goldberg,
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UN DESA. 2022. The Sustainable Development Goals Report 2022 - July 2022. New York,
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Savitz A. W, Weber K, 2006, The Triple Bottom Line: How Todays Best – Companies Are
Achieving Economic, Social, and Environmental Success – and How You Can Too, Jossey-
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