TBL/Measures

The Triple Bottom Line (TBL)

The TBL is an accounting framework that incorporates three dimensions of performance: economic, social and environmental. This differs from traditional reporting frameworks as it includes ecological (or environmental) and social measures that can be difficult to assign appropriate means of measurement. The Triple Bottom Line concept developed by John Elkington has changed the way businesses, nonprofits and governments measure sustainability and the performance of projects or policies.

The TBL captures... ON EXAM

"the essence of sustainability by MEASURING the impact of an organization's activities on the world... including both its profitability and shareholder values and its social, human and environmental capital" (Andrew Savitz) The trick is not defining TBL. The trick is measuring it.

Calculating the Triple Bottom Line (TBL).

1. "Monetary" value of all dimensions of the TBL 2. Each sustainability stands alone 3. calculate the TBL in terms of an index

What is a sustainability Key Performance Indicator (KPI)??

• KPI´s evaluate the success of an organization/particular activity, in which it engages, that relates to sustainability externalities. • It measures periodic achievement of some levels of operational goals (e.g. pollution levels, work force satisfaction, etc.). • There are quantifiable metrics that reflect the environmental and social performance of a business in the context of achieving its wider goals and objectives. • Accordingly, choosing the right KPIs relies upon a good understanding of what is material to the organization. • KPIs help businesses to implement strategies by linking various levels of an organization (business units, departments and individuals) with clearly defined targets and benchmarks.

KPI's

• KPI´s: - The most meaningful elements that the organization decides to report and track. - Usually used to develop improvement goals. • Material. • Measurable. • Important to stakeholders.

Social Indicators

• Labour Practices and Decent Work • Human Rights • Society • Product Responsibility

Society (again)

• Less conceptual definition than in the environmental dimension. • A wide range of measurements (internal and external). • External: refer to social dimensions of a community or region and could include measurements of education, equity and access to social resources, health and well-being, quality of life, and social capital. • Internal: Employee related. - Compensation - Productivity - Labor conditions - Safety

TBL Info

-There is neither universal standard method for calculating the TBL nor there is a universally accepted standard for the measures that comprise each of the three TBL categories. Flexibility: It allows a user to adapt the general framework to the needs of different entities (businesses or nonprofits), different projects or policies (infrastructure investment or educational programs), or different geographic boundaries (a city, region or country). -The set of measures will ultimately be determined by stakeholders and subject matter experts and the ability to collect the necessary data -There are challenges to putting the TBL into practice. These challenges include measuring each of the three categories, finding applicable data and calculating a project or policy's contribution to sustainability. -The TBL framework allows organizations to evaluate the ramifications of their decisions from a truly long-run perspective. -It is used by businesses, nonprofits and governments. The application of the TBL by businesses, nonprofits and governments are motivated by the principles of economic, environmental and social sustainability, but differ with regard to the way they measure the three categories of outcomes

The measurement process. Key Questions

1. Problem - what is the problem the organization is facing? 2. Stakeholders - stakeholders involved in? (identify) 3. Performance - what is the desired level of sustainability the firms wants to achieve? 4. Process - what process relates to the sustainability problem? 5. Metrics - What indicators/metrics should be used to measure improvement?

Functional KPI's

Name of the indicator - Clear and concise title Relation to the strategic goal (Strategic KPI) - Name of the Strategic KPI is linked to Target - Defined by business through stakeholder analysis Specification limits - Span level into which the business can operate Definition /Formula - Mathematical indicator Name of the responsible for the measure and process - Ultimately responsible for the indicator results and set goals. He/she should take action in the event of not meeting the targets set Sources of data - System/process data collection Process of the indicator - Where the indicator starts and finishes in its measurement Scale of scrutiny - Measure scale Who is affected by this indicator/ who affect the indicator - Stakeholders in the outcome and measurement process

Calculating the Triple Bottom Line (TBL)

The 3P´s do not have a common unit of measure. - Economic performance, Profit, is measured in $/€... - What about People (social)? - What about Planet (environment)?

product responsibility

• Customer Health and Safety • Product and Service Labeling • Marketing Communications • Customer Privacy • Compliance

Economic Indicators

• Economic Performance. • Market presence. • Indirect Economic Impact. • Procurement practices.

Labour Practices and Decent Work

• Employment • Labour relations • Occupational health and safety • Training and education • Diversity and equal opportunity • Equal remuneration M/W • Supplier assessment for labour practices

Human Rights

• Investment • Non-discrimination • Freedom of Association and Collective Bargaining (Union agreement) • Child Labor • Forced or Compulsory Labor ▪ Indigenous Rights ▪ Assessment ▪ Supplier Human Rights Assessment ▪ Human Rights Grievance Mechanisms ▪ Security Practices

Society

• Local Communities • Anti-corruption • Public Policy • Anti-competitive Behaviour • Compliance • Supplier Assessment for Impacts on Society • Grievance Mechanisms for Impacts on Society

Environmental Indicators

• Materials • Energy • Water • Biodiversity • Emissions • Waste ▪ Products and services ▪ Compliance ▪ Transport ▪ Supplier environmental assessment