So much for the Triple Bottom Line : Why PROFIT still reigns supreme

September 29, 2016

The old adage “ The Customer is KING” seems to still hold sway across the corporate world. At least that seems to be the prevailing view in many companies when considering the environmental and ecological impacts that their business operations create. The not so obvious interrelationship between these two is simple. The first question raised at any level of the corporate decision making ladder when asked about making their business operations more environmentally sustainable is .. “ What’s in it for me ?” “What is my ROI” “How will becoming ‘greener’ help me build my business or sell more?” and more frequently … “The customer is not interested in paying for this… therefore it is not necessary”…. And the list goes on….



But broadly speaking the views often fall into the same theme. “We will go in for environmentally sustainable business operations only when a customer will pay more , or buy more or use more often….until then…. No.”


So in other words PEOPLE and PLANET can be considered ONLY IF they lead to PROFIT and not till then.


So much for a triple bottom line.


The thinking behind using the triple bottom line as to create a mechanism whereby corporates could use 3 equally important concepts, given an equal weightage to more fairly judge their performance and impact. Not to add 2 more “buzz words” to the all important financial bottom line.


While exceptional companies across the globe are in fact genuinely adhering to and measuring their success with a triple bottom line, they remain well and truly the exceptions. The average company focuses on its Profit after Tax, Dividend and Share price while paying lip service to Corporate Social Responsibility in their annual reports or planting the symbolic set of 10 trees on Earth Day.


Corporate leaders in developing markets do face stringent challenges; no doubt. However many local business all too often adopt a myopic short term vision of their operations. Many only consider the implications of the next several months when longer term market wide implications of climate change fall well outside their perceptual range.


Today’s average managers are forgetting some fundamental facts;


Fact #1: There is an marked increase in the environmental sensibilities of today’s generation, specially when compared against 20 years ago or so.


Consumers on a global scale are becoming more and more aware of the environmental implications caused by their decision to purchase more goods or services. Advanced markets such as Europe are increasingly implementing environmental indicators on product labels. Products sporting Carbon Footprints, and or Water Consumption Information on their labels are on the rise. As are companies who are completely offsetting their entire carbon footprint through the internationally accepted mechanism of carbon trading. Commuters are opting to avoid driving themselves and advanced cities have bicycles for hire or even for free at street corners. Recycling and Reusing are becoming the norm. Far thinking global brands are now launching more environmentally conscious product variants across all market segments.


Fact #2 :Never under estimate the power of good marketing.


Imagine the dilemma of product managers year ago, who had to convince consumers that soap was in fact not clean enough! But today bottles of hand wash adorn every kitchen and public wash area, with consumer now being reluctant to risk getting ‘tainted’ by soap. Think of the razor blade companies that convince gentlemen every other year that they need an additional blade on their razor ( I believe the current trend is 5 or 6 ?? ). Or the hair care product companies that regularly keep inventing new and astonishing reasons why the shampoo or conditioners that you used for years are just not good enough to protect your hair ( despite the fact that you never seemed to notice an issue before ). These are all examples of the kind of behavioral change that good marketers can achieve. So why not bend this remarkable tool towards creating a ‘greener’ mentality among consumers. If anything, it is evidently clear that the average consumer does not know what he wants till the marketer convinces him of it. So why are companies taking a back seat when it comes to convincing consumers to be greener, cleaner and more eco friendly ?


Fact #3: In today’s ultra competitive business environment brand, corporates and products are in a never ending battle to gain a significant point of difference form their closest competitor.


In the context of freely available information and the ongoing age of technology finding that technological or psychological advantage is increasingly beginning to elude even the best marketers. An ecological / environmental advantage for brands or corporates will work well to simultaneously set them apart from their rivals whilst at the same time, laying the ground work to be appealing to the newer, greener generation of consumers.


So where does that leave us ?


In a fast changing world where the world where the CEO of the world’s most valuable company Apple; tells shareholders ““If you want me to do things only for ROI reasons, you should get out of this stock,” and where Global corporate giants such as Microsoft implement an internal carbon fee programme has reduced the company's emissions by 7.5 million metric tons of CO2e, and saved more than $10 million per year, companies should be asking themselves why they don’t do what the worlds greatest companies are doing…. not the ROI of a $3,000 environmental audit.

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