Why is the triple bottom line so important?

It’s not enough in today’s society for companies to simply act good, they must also be seen to be doing good and acting as an example citizen.

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Corporate Social Responsibility (CSR) is a way in which businesses can maintain reputation whilst bettering society. A recent study found that 55% of consumers were willing to pay more for a product or service providing it came from a socially responsible company.  “Corporations now must honor their obligations to all constituents, including their effects on society as a whole. We now hear managers talking about the “triple bottom line.” The bottom line is triple because it now must account for financial, social and environmental performance.” (Coombs and Holladay, 2009, pp.277).

Today it is becoming a necessity for any given organisation to have a social role and to promote good within society. Peach presents this as a metaphor exploring the impact of a business on its environment (After Peach 1987: 191-193). Peach argues that every organisation has basic responsibilities, at a basic level they need to obey laws and pay taxes.

Already many companies will fall at the first hurdle, companies such as Apple, Google, Starbucks and Amazon have all faced damaging tax avoidance scandals. These are the types of businesses that can learn from Peach by making an effort with organizational and societal responsibilities and minimizing the negative effects of environmental pollution in order to work towards a healthy society. I’m not saying every business model out there becomes an advocate for philanthropy, although it is time for many of them to become a more corporate citizen.

I think it’s really interesting that some practitioners are arguing that CSR is not enough anymore… Au reviour CSR, bonjour corporate citizenship!

The basis of this argument is basically due to the fact that CSR focuses on people and seems to exclude environmental responsibilities and ignores the green agenda. Practitioners supporting this claim that there are flaws in CSR and have created a more rounded notion of ‘corporate citizenship.’

The triple line, CSR and corporate citizenship are all vital to the preservation of reputation, companies today are expected to be economic and socially ethical as well as holding an environmental conscience within their practices. 

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