John Elkington has lit the fuse to blow up the “Triple Bottom Line” he invented
In the same month that John Elkington appeared on our podcast, he put a nail in the coffin (or at least took a fatal shot) to do away with the term the Triple Bottom Line (TBL). On June 25, he published an article that appeared in the Harvard Business Review: 25 Years Ago I Coined the Phrase “Triple Bottom Line.” Here’s Why It’s Time to Rethink It.
To be honest, at first glance, I’m a bit dismayed. Intuitively, the TBL makes a lot of sense. When I was considering career directions, and how to position myself as an entrepreneur, I remember getting a great deal of inspiration from the knowing that whatever business I ultimately create everything about it would be baked in the three P’s: people, planet, profit. Or the three E’s: equity, environment, economy. However, I found Elkington’s argument below particularly compelling.
…the bewildering range of options now on offer can provide business with an alibi for inaction. Worse, we have conspicuously failed to benchmark progress across these options, on the basis of their real-world impact and performance.
Together with its subsequent variants, the TBL concept has been captured and diluted by accountants and reporting consultants. Thousands of TBL reports are now produced annually, though it is far from clear that the resulting data are being aggregated and analyzed in ways that genuinely help decision-takers and policy-makers to track, understand, and manage the systemic effects of human activity.
Fair enough, John. Are you saying that there’s an army of people working in the name of sustainability and not achieving the desired impact? I’m certainly a disciple to the “if you can’t measure it, you can’t manage it” philosophy, but when what is getting measured begins to obfuscate positive impacts and get in the way of managing negative ones, then this indeed is not the best use of their time. Let me try something out on you.
First, a premise.
While managing carbon isn’t everything that companies need to address, it’s something that every company needs to track, and internalize. This is because we have emitted too much carbon into the atmosphere, and we’ve passed our budget. For every ton of CO2 emitted, another one must be put away. Companies who emit carbon are responsible for putting it away. While this is not how it happens today, in the future this is inevitable. Therefore, what we measure (from a carbon perspective) is simple: the total amount of carbon dioxide emitted from the direct and indirect activities of a company, and how that company got that number to zero.
Now, an opportunity.
Instead of producing TBL reports that don’t track the whole system, the accountants and reporting consultants can be involved with being part of a new marketplace with an aim to reverse climate change. They could buy NORI tokens to meet their goals to get the carbon footprint to zero. If it is not possible to get there with carbon free sources of energy, acquire NORI to buy CRCs. These consultants not only can help companies identify strategies get to carbon neutrality (through a combination of reducing emissions and CRCs), but if they are in a position of fiduciary responsibility, verify or audit the accuracy of data and get paid as part of a scheme to remove billions of tons of carbon dioxide from the atmosphere.
Admittedly, paying to negate your carbon emissions is just one piece of the puzzle. Companies must still be responsible for any environmental impact that happens outside of the carbon cycle (i.e. habitat/biodiversity loss, ecosystem destruction, waste streams) as well as any social impact. I’d argue that while this is not part of Nori’s core business, it is ancillary to companies using blockchain technology to increase transparency and the creation of ecosystem service markets.
If you to listen to the podcast you can see that John is stewing over whether to announce that he’s doing away with the Triple Bottom Line though he doesn’t come outright and say it. He recognizes that the system is going to be challenged and that there’s a need to push people in the right direction. In part, he views that the shock to the system will come because of the missteps in the sustainability industry. He acknowledges that the drawdown market that Nori is creating is a necessary part of the equation. As John sees it, economics and finance are poor at getting signals right. Even though Nori is working to get it right through economics and finance, we realize that this is an effort that is going to take everyone, and that the system we build must be one that works for 100% of humanity.