We are used to talking about the bottom line as the total monetary cost or profit yielded through our economic activity. It’s a financial metaphor; an accountant’s synecdoche. It provides the paramount measure by which we conventionally gauge the success or failure of our ‘business ventures’ whether they be corporate, personal or government; profit or not-for-profit.note 1
The trouble is that when we focus in on the financial bottom line above all else we loose track of the true economic, social, and ecological impact of our business.
There is an alternative.
It is often called “Triple Bottom Line”note 2. It is a philosophy of measuring success and impact by looking at three dimensions, or circles of sustainability, in our business activities:
1. the human, social, cultural impact;
2. the ecological impact;
3. the financial, or monetary, benefit.
A Triple Bottom Line business philosophy is very much in tune with the teaching of folks like Mike Nickerson (whose guest post on steps to a sane economy can be found by clicking HERE) who advocate for sustainability or what could be called long-term well-being (click HERE for link).
Lisa Swallow in her Green Business Practices for Dummies provides us with a helpful table that I have adapted below:
Given the wide acceptance of government issued fiat currency the bottom line is relatively easy to calculate. Within the accepted context of fractional reserve banking it is very simple. And so it is very attractive.
The phrase “Triple Bottom Line” was “[c]oined in 1994 by John Elkington…”. (Lisa Swallow, Green Business Practices for Dummies, Wiley Publishing, Inc., Indianapolis, 2009, p 10.(AMAZON LINK)) I am not familiar with his work. (You can read about Elkington in The Economist by Clicking HERE) I do not use Triple bottom Line to refer to any specific method of technical accounting practice. There is a lot of debate from many angles, including that of environment vs ecology, around any particular formal system of what might be called Triple Bottom Line accounting practices. The Wikipedia link HERE gives some idea of these controversies.