Who believes in the triple bottom line (TBL) approach? Say "Aye"?
If you have trouble believing in People, Planet and Profit models, I understand, I sympathize, and I feel your pain. The failed promise of such a model, one where we can prioritize more than financial returns, has left many feeling betrayed. The concept was created by John Elkington in the 1990s and sought to provide guidance for accounting for environmental and social measurements as well as financial. What has gone wrong since then? Can we create models that value the hard working people in our supply chains and honor nature? Why does it seem that we are falling flat in living up to this dream?
We know the answer to this: our current free market paradigm is not fit for the 3P purpose. Capitalism, financial regulatory systems that favor the maximization of shareholder (not stakeholder) value, short-term financial gain, and scare directors from doing anything differently due to their fiduciary duty (interpreted to mean maximizing profit for shareholders). There is also the difficulty in measuring and agreeing on a measurement system for environmental and social returns. This is why there is only one P.
That is the bad news.
The good news is that new regulation is coming into place that will start to shift this paradigm. For example, the European Commission will be publishing its product environmental footprint (or PEF) legislation due later this year as well as requiring transparency through a digital product passport (DPP) as part of the Circular Economy Action Plan. In the US, the SEC's disclosure requirements for public companies around climate-related risks, emissions and net-zero transition plans.
Furthermore, investors feel the pressure to incorporate Environmental, Social and Governance (ESG) screening to prospective targets and portfolio companies. This lens will lead to better KPIs that will start measuring impact-related outcomes.
So maybe there will be more than one P that is considered significant in the years to come. The next question would be: how fast will this happen and will it be too late?