The Triple Bottom Line
Not since the Great Depression has American business been so vilified for financial scandal, environmental recklessness and general disregard for the public interest. The very names of the disgraced companies — from Enron to Worldcom and ImClone — conjure up images of shame. It is enough to make executives question whether it is even worth trying to please stakeholders not to mention earn a profit.
Their answer lies in the sweet spot.
That, Andy Savitz tells us in The Triple Bottom Line, is the place where corporate and societal interests intersect. It is a new way to measure the bottom line — where profits go side-by-side with environmental and social performance — and an illuminating way to understand the often-fuzzy concept of sustainability. It is a spot that the best-run and most profitable companies have already found, and Savitz, former head of PricewaterhouseCooper's Sustainability Business Services practice, says is attainable for any business that knows where to look and is willing to change.
The Triple Bottom Line: How Today's Best-Run Companies are Achieving Economic, Social, and Environmental Success — And How You Can Too (Jossey-Bass/Wiley, 2006) is a blueprint for executives and companies to find their way to a sustainable, profitable future in today's daunting era of environmental and social accountability. It does that partly through hard-headed case studies — some success stories, other abject failures — including:
- Hershey Foods, the legendary candy maker that blew a $12 billion dollar deal because it failed to heed social and economic concerns of its employees and of the town that gave it its name;
- PPL, the reviled electricity behemoth that achieved a love fest with environmentalists and Native Americans by agreeing to remove its hydro-electric dam from the Penobscot River in exchange for a sizable cash payout;
- Toyota and GE, which are turning social responsibility into financial opportunity at the same time that Wal-Mart, McDonalds and Exxon are paying a price for thumbing their noses at it.
But Savitz' book is more than a look back at what other companies have done right or wrong. It helps business leaders look ahead to how their company can find its own sweet spot — from such simple steps as reducing energy consumption and employee accidents to the complex business of creating economic development while doing business with the poor.
"Businesses," Savitz writes, "are being forced to respond to social, economic and environmental changes in the world around them. Just as global warming is fundamentally altering the commercial and regulatory landscape for energy and auto companies, so the advent of HIV/AIDS, SARS and persistent malaria is changing the basic business model for pharmaceutical companies. Just as Nike was transformed by the discovery of children working in its overseas factories, so Wal-Mart is now coming face to face with the 'high cost of low wages' and McDonalds's with obesity. No sooner had Dell, Apple and IBM created the personal computer then they had to bridge the digital divide."
"The truly sustainable company," Savitz concludes, "would have no need to write checks to charity or 'give back' to the local community, because the company's daily operations would not deprive the community, but would enrich it."