Triple Bottom Line - Supporting Arguments

Supporting Arguments

The following business-based arguments support the concept of TBL:

• Reaching untapped market potential: TBL companies can find financially profitable niches which were missed when money alone was the driving factor. Examples include:

1. Adding ecotourism or geotourism to an already rich tourism market such as the Dominican Republic
2. Developing profitable methods to assist existing NGOs with their missions such as fundraising, reaching clients, or creating networking opportunities with multiple NGOs
3. Providing products or services which benefit underserved populations and/or the environment which are also financially profitable.

• Adapting to new business sectors: Since many business opportunities are developing in the realm of social entrepreneurialism, businesses hoping to reach this expanding market must design themselves to be financially profitable, socially beneficial and ecologically sustainable or fail to compete with those companies who do design themselves as such. For example, Fair Trade and Ethical Trade companies require ethical and sustainable practices from all of their suppliers and service providers. A business which is planning to work with Fair Trade or Ethical Trade companies must design their business model to be TBL.

Fiscal policy of governments usually claims to be concerned with identifying social and natural deficits on a less formal basis. However, such choices may be guided more by ideology than by economics. The primary benefit of embedding one approach to measurement of these deficits would be first to direct monetary policy to reduce them, and eventually achieve a global monetary reform by which they could be systematically and globally reduced in some uniform way.

The argument is that the Earth's carrying capacity is itself at risk, and that in order to avoid catastrophic breakdown of climate or ecosystem, there is a need for a comprehensive reform in global financial institutions similar in scale to that undertaken at Bretton Woods in 1944. Marilyn Waring has been a major proponent of this reform.

With the emergence of an externally consistent green economics and agreement on definitions of potentially contentious terms such as full-cost accounting, natural capital and social capital, the prospect of formal metrics for ecological and social loss or risk has grown less remote through the 1990s.

In the United Kingdom in particular, the London Health Observatory has undertaken a formal programme to address social deficits via a fuller understanding of what "social capital" is, how it functions in a real community (that being the City of London), and how losses of it tend to require both financial capital and significant political and social attention from volunteers and professionals to help resolve. The data they rely on is extensive, building on decades of statistics of the Greater London Council since World War II. Similar studies have been undertaken in North America.

Studies of the value of Earth have tried to determine what might constitute an ecological or natural life deficit. The Kyoto Protocol relies on some measures of this sort, and actually relies on some value of life calculations that, among other things, are explicit about the ratio of the price of a human life between developed and developing nations (about 15 to 1). While the motive of this number was to simply assign responsibility for a cleanup, such stark honesty opens not just an economic but political door to some kind of negotiation — presumably to reduce that ratio in time to something seen as more equitable. As it is, people in developed nations can be said to benefit 15 times more from ecological devastation than in developing nations, in pure financial terms. According to the IPCC, they are thus obliged to pay 15 times more per life to avoid a loss of each such life to climate change — the Kyoto Protocol seeks to implement exactly this formula, and is therefore sometimes cited as a first step towards getting nations to accept formal liability for damage inflicted on ecosystems shared globally.

Advocacy for triple bottom line reforms is common in Green Parties. Some of the measures undertaken in the European Union towards the Euro currency integration standardize the reporting of ecological and social losses in such a way as to seem to endorse in principle the notion of unified accounts, or unit of account, for these deficits.