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The triple bottom line (also referred to as TBL) is a relatively new concept introduced only at the end of the past century. Its principle idea lies in measuring business success not only by economic achievements but also by an input of a company into ecology and societies. According to Savitz (2006), nowadays “most or all businesses are likely to integrate their Triple Bottom Line into their basic performance reporting” (p. 226). The TBL’s importance is dictated by the current need of creating responsible businesses, which generates more than income.
The Three Frameworks of the TBL
The three frameworks of the TBL include economics, society, and the environment. The economic side was primarily viewed as the single one important for companies. It is the traditional sector of measuring the business’s financial results. The social framework measures the impact of a company on societies it deals with. The measurements may include the principles of the fair trade, the corporate social responsibility, the charity targeted events, and other actions. The environmental framework evaluates the steps taken by corporations to reduce their possible adverse effect on the ecological state of the planet.
TBL and Companies
Depending on the economic success, organizations are classified as being successful or not. However, more and more companies today pay attention to the other two frameworks of the TBL, as they may become the key factors for attracting new customers. Nowadays, a lot of businesses are conducted globally, and it is important for people, that manufacturing processes in the developing countries are as fair as they are in the Western world. For instance, the wages in Asia are not the same as they are in the USA, and this issue may be addressed by a corporation to ensure the Asian workers receive a decent salary. This step, especially if publicly emphasized, can show that the primary concern of a corporation is not revenue, but something more valuable.
The Clarins Case
Clarins, which is a French cosmetics company, is an excellent example of a brand that is successful due to their Triple Bottom Line policies. Its product is recognized internationally, and its social and environmental steps benefit the communities the business works with. Clarins positions its products as luxury and focuses primarily on the skin care cosmetics. The pricing strategy helps the company to get big revenues and spend money on charity programs at the same time.
The social framework of Clarins is one of its principal features. For instance, there is plenty of information on their official website featuring the charity actions (Clarins, 2016) which they take in the scope of society and environment. The social framework includes the Dynamic Woman Award, the Courtin Arthritis Foundation, and the Etincelle & La Vie de Plus Belle program. The first one is targeted at recognizing the input of women around the world into improving children’s lives, the second is the managed foundation fighting arthritis, and the last program is developed for fighting breast cancer.
There is also the FEED campaign aiming to support children in poor communities with school meals by sharing a part of the income from product sales. The environmental framework of Clarins also involves several programs and awards. As a cosmetics brand, it realizes the importance of the way it uses natural resources. The company reports on how regions and natural areas are used to collect the material, emphasizing the eco-friendly processes targeted on preserving the landscape.
All these efforts benefit Clarins as a sustainable business, despite studies claiming that social and environmental efforts usually disrupt the financial growth (Gimenez, 2012, p. 167). Customers are attracted not only by the products’ high quality but also by the company’s reputation. Investors also see the economic potential, for the TBL framework of Clarins proves the corporation has high income and will more likely keep a growing potential in the future.
References
Clarins. (2016). Charitable actions. Web.
Gimenez, C. (2012). Sustainable operations: Their impact on the triple bottom line. International Journal of Production Economics, 140(1), 149-159.
Savitz, A. (2006). The triple bottom line: How today’s best-run companies are achieving economic, social, and environmental success – and how you can too. San Francisco, CA: John Wiley & Sons, Inc.
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