The triple bottom line method was first introduced by John Elkington. He introduced this method in 1994. This method has emerged because of the increasing need for good working conditions, environmental protection, and prioritizing society. A business firm may expect to reap higher profits without considering the environment and society. It leads to the exploitation of society and the depletion of the environment. Hence, the government made certain practices essential as norms. By considering those, a company started to consider the environment and society on its bottom line as how it makes profits. This approach explains how a company can reap profit while considering social and environmental impacts. In this blog, we will explore the benefits of the triple bottom line method.
There are several advantages and a few disadvantages to the triple bottom line method. Let's see the advantages first.
When a company treats the environment and society as profits, it can reap triple benefits. It considers making a profit by using environmental and societal actions. Profits are not altered even by making society and the environment safer. The company, or corporate in ancient times, extracted and deployed resources from the environment. It never gives back due to the fear of a reduction in profit. But now effective leaders have identified that it is possible to make the same amount of profit by improving social and environmental factors. This improves the brand image and customer satisfaction. It creates brand awareness among consumers. It improves the reputation and goodwill of the company.
It is possible to retain the employees of the venture by using this method. A company may incorporate environmental recovery and social welfare. Hence, it considers improving the working conditions of employees in the organization. It provides good working circumstances. It provides insurance, a provident fund, and workplace safety, among other things. A company may consider society from its perspective. Companies usually extract resources from nature and human factors. It gets profit by using resources. It never pays back to society. In this case, the company becomes liable to pay the necessary compensation to the environment and employees. And the number of workers working in an organization may remain the organization forever.
Employees are considered the highest resource in an organization. They are given all the benefits that they want. Their importance was realized and promised by companies. They consider providing better services for employees to retain them. Hence, employees feel secure and satisfied. They don't leave the organization often. This is one of the perceived advantages of the triple bottom line method.
When an organizational framework is concentrated a lot, it can make a structure clear. When an organization provides competitive advantages like competitive pay, insurance, and improved working conditions when compared to other organizations, the best talent may want a better organization. The talent may be enough for such an organization. The employee retention rate is high, and good circumstances are ensured. He works in a place where he can get improvement and motivation. If a person does not receive any motivation or improvement at work, they may be let go from the organization. They seek better and quality opportunities.
When a company is concerned about the environment and society, it can reap numerous benefits. In the same way, environmental protection is ensured. The environmental factors are protected and safeguarded from damage and unscrupulous activities. Exploitation and extraction may be reduced. When this is reduced, a company may sustain the market for a long time. This increases the lifespan of the earth. Also, it improves the health of people. When environmental actions are protected and concerned about, this improves the well-being of the country and society. Environmental protection is one such advantage that is a result of the triple bottom line method.
When a company improves environmental actions and societal welfare without altering its quantity of profit, it improves its image. Production may be increased. When production is increased, the number of sales may increase. This makes a company receive more revenue. Doing so increases the profit of the company. It has a major market share in its industry. When a major market share is dealt with by one company, it can make big decisions without the intervention of other internal and external factors. A major change and influence may be made by this major market holding company. It makes competitors fall. People in society prefer the goods of a company that holds a major market share. Hence, such firms enjoy a competitive advantage. This is one of the crucial advantages of the triple bottom line method.
A company's expenses on part of production and distribution can be reduced by this triple bottom line method. The company not only concentrates on profit as a bottom line but also concentrates on people and the planet as a bottom line. The company may improve its responsibility by the inclusion of renewable resources over non-renewable resources. The cost may be reduced. It improves the profit margin. It also saves money on a portion of the environment. As the company reduces the toxic release of air, the natural world is protected. In this way, it reduces the cost of deployment in part of the environment.
Companies and corporates may include environmental factors and societal welfare as a bottom-line approach. Companies may have an impact on the environment and society. It mends it in various ways by considering the environment and society as the main factors. Let us see some disadvantages of the triple bottom line method:
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Charles writes blogs and articles for students who are facing problems with their management assignments. His articles have been featured on several websites. He has contributed to the academic enhancement of students from the University of New South Wales, Central Queensland University, Edith Cowan University, etc. He joined the team of My Assignment Services as a consulting expert and now is a full-time academic help provider. His expertise in the field of management covers topics like leadership management, human resource management, business management and several others. His blogs focus on solving the most complex of the queries and simplifying the processes.
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