MODULE 1 AND 2

Sustainable management takes the concepts from sustainability and synthesizes them with the concepts of management. Sustainability has three branches: the environment, the needs of present and future generations, and the economy. Using these branches, it creates the ability to keep a system running indefinitely without depleting resources, maintaining economic viability, and also nourishing the needs of the present and future generations. From this definition, sustainable management has been created to be defined as the application of sustainable practices in the categories of businesses, agriculture, society, environment, and personal life by managing them in a way that will benefit current generations and future generations. Sustainable management is needed because it is an important part of the ability to successfully maintain the quality of life on our planet. Sustainable management can be applied to all aspects of our lives. For example, the practices of a business should be sustainable if they wish to stay in businesses, because if the business is unsustainable, then by the definition of sustainability they will cease to be able to be in competition. Communities are in a need of sustainable management, because if the community is to prosper, then the management must be sustainable. Forest and natural resources need to have sustainable management if they are to be able to be continually used by our generation and future generations. Our personal lives also need to be managed sustainably. This can be by making decisions that will help sustain our immediate surroundings and environment, or it can be by managing our emotional and physical well-being. Sustainable management can be applied to many things, as it can be applied as a literal and an abstract concept. Meaning, depending on what they are applied to the meaning of what it is can change. History Managers' strategies reflect the mindset of the times. This being the case, it has been a problem for the evolution of sustainable management practices for two reasons. The first reason is that sustainable norms are continually changing. For example, things considered unthinkable a few years ago are now standard practices. And the second reason is that in order to practice sustainable management, one has to be forward thinking, not only in the short term, but also in the long term. Management behavior is a reflection of how accepted conceptions of behavior are defined. This means that forces and beliefs outside of the given program push along the management. The manager can take some credit for the cultural changes in his or her program, but overall

the organizations culture reflects dominant conceptions of the public at that time. This is exemplified through the managerial actions taken during the time periods that lead up to the present day. These examples are given below:

Industrial environmentalism This was a time period in which, even though there were outside concerns about the environment, the industries were able to resist pressures and make their own definitions and regulations. [1] Environmentalists were not viewed as credible sources of information during this time and usually discredited. Regulatory environmentalism The norms or this period radically shifted with the creating of the U.S. Environmental Protection Agency (EPA) in 1970. The EPA became the mediator between the environmentalists and the industry, although the two sides never met. [1] During this period, the environment for the majority of industry and business management teams was only important in terms of compliance with law. [1] In 1974 a conference board survey found that the majority of companies still treated environmental management as a threat. [1] The survey noted a widespread tendency in most of industry to treat pollution control expenditures as non-recoverable investments. [1] According to the consensus environmental protection was considered at best a necessary evil, and at worst a temporary nuisance. Environmentalism as social responsibility By 1982, the EPA had lost its credibility, but at the same time activism became more influential, and there was an increase in the funding and memberships of major non-governmental organizations (NGOs). Industry gradually became more cooperative with government and new managerial structures were implemented to achieve compliances with regulations. [1] Strategic environmentalism (1988-1993) During this period, industry progressed into a proactive stance on environmental protection. [1] With this attitude, the issue became one in which they felt qualified to manage on their own. Although there was advancement in organizational power, the concern for the environment still kept being pushed down the hierarchy of important things to do. Environmental management as an opportunity

In 1995 Harvard professor Michael Porter wrote in the Harvard Business Review that environmental protection was not a threat to the corporate enterprise but rather an opportunity, one that could increase competitive advantage in the marketplace.[1] Before 2000, companies generally regarded green buildings as interesting experiments but unfeasible projects in the real business world.[2] Since then several factors, including the ones listed below, have caused major shifts in thinking.[2] The creation of reliable building rating and performance measurement systems for new construction and renovation has helped change corporate perceptions about green. In 2000 the US Green Building Council in DC launched its rigorous leadership in energy and environmental design (LEED) program. [2] Hundreds of US and international studies have proven the financial advantages of going green: lower utility costs, higher employee productivity. [2] Green building materials, mechanical systems, and furnishings have become more widely available, and prices have dropped considerably.[2] As changes are made to the norms of what is acceptable from a management perspective, more and more it becomes apparent that sustainable management is the new norm of the future. Currently, there are many programs, organizations, communities, and businesses that follow sustainable management plans. These new entities are pressing forward with the help of changing social norms and management initiatives. Management position A manger is a person that is held responsible for the planning of things that will benefit the situation that they are controlling. To be a manger of sustainability, one needs to be a manger that can control issues and plan solutions that will be sustainable, so that what they put into place will be able to continue for future generations . The job of a sustainable manager is like other management positions, but additionally they have to mange systems so that they are able to support and sustain themselves. Whether it is a person that is a manager of groups, business, family, communities, organizations, agriculture, or the environment, they can all use sustainable management to improve their productivity, environment, and atmosphere, among other things. Some practical skills that are needed to be able perform the job include: Seeing problems/issues Being able to set goals/agendas

Planning Skills Creating new ways of doing things (thinking outside the box)

Taking action when it is needed Organizational skills Being able to teach, make aware, and train people Ability to make tough decisions Keeping tract of progress Taking responsibility Ability to project current issues/ideas/plans into the Future Possessing whole systems thinking
[3]

Recently, there has even been the addition of new programs in colleges and universities in order to be able to offer Bachelors of Science and Masters of Science in Sustainable management. Business In business, time and time again, environmentalists are seen facing off against industry, and there is usually very little "meeting in the middle" or compromises. When these two sides agree to disagree, the result is a more powerful message, and it becomes one that allows more people to understand and embrace. Organizations need to face the fact that the boundaries of accountability are moving fast. The trend towards sustainable management means that organizations are beginning to implement a systems wide approach that links in the various parts of the business with the greater environment at large. As sustainable management institutions adapt, it becomes imperative that they include an image of sustainable responsibility that is projected for the public to see. This is because firms are socially based organizations. But this can be a double edged sword, because sometimes they end up focusing too much on their image rather than actually focusing on implementing what they are trying to project to the public; this is called green washing. It is important that the execution of sustainable management practices is not put aside while the firm tries to appeal to the public with their sustainable management practices. Additionally, companies must make the connection between sustainability as a vision and sustainability as a practice. Managers need to think

systematically and realistically about the application of traditional business principles to environmental problems. By melding the two concepts together, new ideas of business principles emerge and can enable some companiesthose with the right industry structure, competitive position, and managerial skills- to deliver increased value to shareholders while making improvements in their environmental performance. [4] Any corporation can become green on a standard budget. [2] By focusing on the big picture, a company can generate more savings and better performance. By using planning, design, and construction based on sustainable values, sustainable management strives to gain LEED points by reducing footprint of the facility by sustainably planning the site with focus on these three core ideas.[2] To complete a successful green building, or business, the management also applies cost benefit analysis in order to allocate funds appropriately. Business economics The economic system, like all systems, is subject to the laws of thermodynamics, which define the limit at which the Earth can successfully process energy and wastes. [5] Managers need to understand that their values are critical factors in their decisions. Many of current business values are based on unrealistic economic assumptions; adopting new economic models that take the Earth into account in the decision-making process is at the core of sustainable management.[5] This new management addresses the interrelatedness of the ecosystem and the economic system. [5] The strategic vision that is based on core values of the firm guides the firms decision-making processes at all levels. Thus, the sustainable management requires finding out what business activities fit into the Earths carrying capacity, and also defining the optimal levels of those activities. [5] Sustainability values form the basis of the strategic management, process the costs and benefits of the firms operations, and are measured against the survival needs of the planets stakeholders. [5] Sustainability is the core value because it supports a strategic vision of firms in the long term by integrating economic profits with the responsibility to protect the environment. [5] Service model

Changing industrial processes so that they actually replenish and magnify the stock of natural capital is another component of sustainable management. One way managers have figured out how to do this is by using a service model of business. [6] This focuses on building relationships with customers, instead of focusing on making and selling products. [6] This type of model represents a fundamental change in the way businesses behave. It allows for managers to be aware of the lifecycle of their products by leaving the responsibility up to the company to take care of the product throughout the life cycle.[6] The service model, because the product is the responsibility of the business, creates an avenue in which the managers can see ways in which they can reduce the use of resources through recycling and product construction. Communities For communities to be able to improve, sustainable management needs to be in practice. If a community relies on the resources that are in the surrounding area, then they need to be used sustainable to insure the indefinite supply of the resources. A community needs to work together to be able to be productive, and when there is a need to get things done, management is needs to take the lead. If sustainable management is in practice in a community, then people will want to stay in that community, and other people will realize the success, and they will also want to live in a similar environment, as their own unsustainable towns fail. Part of a sustainable management system in a community is the education, the cooperation, and the responsiveness of the people that live in the community. [7] There are new ideals to how a community can be sustainable. This can include urban planning, which allow people to move about a city that are more sustainable for the environment. If management plans a community that allows for people to move with out cars, it helps make a community sustainable by increasing mass transit or other modes of transportation. People would spend less time in traffic while improving the environment, and on an occasions exercise. [8] Sustainable management provides plans that can improve multiple parts of people lives, environment, and future generations. If a community sets

goals, then people are more likely to reduce energy, water, and waste, but a community cannot set goals unless they have the management in place to set goals. [9] A part of sustainable management for a community is communicating the ideals and plans for an area to the people that will be carrying out the plan. It is important to note that sustainable management is not sustainable if the person that is managing a situation is not communicating what needs to be improved, how it should be improved, why it is important to them, and how they are involved it in the process. Personal life For a person to be responsible for their action is a part of managing, and that is part of being managed sustainable. To be able to manage oneself sustainable there are many factors to consider, because to be able to manage oneself a person need to be able to see what they are doing unsustainable, and how to become sustainable. Using plastic bags at a check out line is unsustainable because it creates pollutants, but using reusable biodegradable bags can resolve the problem. This is not only environmentally sustainable, but it also improves the physical and mental sustainability of the person that uses the reusable bags. It is physical improvement because people do not have to live with the countless plastic bags on the Earth and the pollution that comes with it. It is also an improvement to mental sustainability, because the person that uses the reusable bags has feeling of accomplishment that comes from doing the right thing. Deciding to buy local food to make the community stronger through community sustainable management, can also be emotionally, environmentally, and physically rewarding. Figure 1[9] McKenzie shows how a person can look at a behavior that they are doing and determine if it is sustainable or not, and what they could replace the bad behavior with. Education of an individual would be the first step to deciding to take a step towards managing their lives sustainable. To manage a person life the benefits needs to be high and the barriers low. Good managing would come up with a competing behavior that has no barriers to it. To come up with a Competing behavior that does not have a barrier to it would involve good problem solving.

New Behavior Perceived Benefits Perceived Barriers

Competing Behavior 1

Competing Behavior 2

Figure 2[9] McKenzie is an example of what a person might try to change in their life to make it more sustainable. Taking the bus instead of walking helps the environment, but it also loses time spent with family. The bus is in the middle of walking and taking a taxi, but another option that is not on the list is riding a bike. Good sustainable management would include all the options that are possible, and new options that were not available before. These figures are tools that can be used in helping people manage their lives sustainably, but there are other ways to think about their lives to become more sustainable.

New Behavior Competing Behavior Walk to Work Take a Taxi

Competing Behavior 2 Take the Bus in Winter

Perceived Benefits Perceived Barriers

Helps the Time with Family Environment

Cheaper than Taxi

Lose time with No alternative/Costly/Bad Loses more family for the environment with family

time

Forests

There are very practical needs for sustainable management of forest. Since forests provide many resources to the people, and to the world, management of the forests are critical to keep those resources available. To be able to manage a forest, knowledge of how the natural systems work is needed. If a manager knows how the natural system works, then when manager of the forest makes plans how the resources are to remove from the forest, the manager will know how the resources can be removed with out damaging the forest. Since many forests are under management of the government that is in the region, the forest are not truly functioning how the ecosystem was naturally developed, and how it is meant to be. An example is the pine flat woods in Florida. To be able to maintain that ecosystem frequent burnings of the forest needs to happen. Fires are a natural part of the ecosystem, but since wild fires can spread to communities near the forest, control of the wild fires is requested from the communities. To maintain flat woods forest control burning or prescribe burning is part of the management to sustain the forest. [10] Farming/agriculture To have sustainable agriculture, sustainable management of the system that the farmer uses needs to be implemented. Management provides the tools, knowledge of the progress, the goals, and organization that sustainable agriculture needs to be sustainable. Keeping track of what the system is providing and consuming is important, so that the management can improve the sustainable efforts in the system. Sustainable management of agriculture means that the system that is being managed is sustainable in all respects. Production should be model after natural systems, instead of using human made systems that have been pushed on the Earth that are not sustainable. In a natural system the Earth uses the waste of one system, and then turns it into the consuming part of another system. This is important to try to model in sustainable management of agriculture, because it would decrease in the amount of resources needed, and decrease the amount of money spent on removing and deposing of waste. Not only does an agriculture system need to protect the resources and environment, but it also needs to be able to compete in the market. Agriculture can model natural systems to provide a system that is competitive in the indefinite long run, instead of striping the

land of its resources and making it unusable in the future. Agriculture that tries to produce its product at the maximum yield will strip soil resources until the land is void and unable to produce. This would be an example of how sustainable management is not in practice, because the system will fail, and because it fails, it would have a negative impact on the people that rely on that product for work, food, and local economy. Sustainable management of agriculture should include the sustainable management of the people that work on the systems. Fair trade is an example of how the world is trying to produce sustainable management of local farmers in third world countries. Slow food is another movement that is trying to promote sustainable management by marketing the production of farms products to the people that live locally. Slow food provides fresher, cheaper, superior, and taster products, because they are sold directly to the public by the farmer. The farmer saves money by not spending it on shipping and transportation of their products. Sustainable management of farms provide solutions to problems that are not sustainable in the areas of the people that buy the product, people that make the product, and the environment. [11]

Module VI
Triple bottom line The triple bottom line (abbreviated as "TBL" or "3BL", and also known as "people, planet, profit" or "the three pillars"[1]) captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social. With the ratification of the United Nations and ICLEI TBL standard for urban and community accounting in early 2007, this became the dominant approach to public sector full cost accounting. Similar UN standards apply to natural capital and human capital measurement to assist in measurements required by TBL, e.g. the eco Budget standard for reporting ecological footprint. In the private sector, a commitment to corporate social responsibility implies a commitment to some form of TBL reporting. This is distinct from the more limited changes required to deal only with ecological issues.

Definition In practical terms, triple bottom line accounting means expanding the traditional reporting framework to take into account ecological and social performance in addition to financial performance. The phrase was coined by John Elkington in 1994.[2] It was later expanded and articulated in his 1998 book Cannibals with Forks: the Triple Bottom Line of 21st Century Business.[3][4] Sustainability, itself, was first defined by the Brundtland Commission of the United Nations in 1987. The concept of TBL demands that a company's responsibility be to stakeholders rather than shareholders. In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder (owner) profit. The bottom lines The triple bottom line is made up of "social, economic and environmental" the "people, planet, profit" phrase was coined for Shell by Sustain Ability, influenced by 20th century urbanism Patrick Geddes's notion of 'folk, work and place'. "People, planet and profit" succinctly describes the triple bottom lines and the goal of sustainability. "People" (human capital) pertains to fair and beneficial business practices toward labour and the community and region in which a corporation conducts its business. A TBL company conceives a reciprocal social structure in which the well-being of corporate, labour and other stakeholder interests are interdependent. A triple bottom line enterprise seeks to benefit many constituencies, not exploit or endanger any group of them. The "up streaming" of a portion of profit from the marketing of finished goods back to the original producer of raw materials, i.e., a farmer in fair trade agricultural practice, is a not unusual feature. In concrete terms, a TBL business would not use child labour and monitor all contracted companies for child labour exploitation,

would pay fair salaries to its workers, would maintain a safe work environment and tolerable working hours, and would not otherwise exploit a community or its labour force. A TBL business also typically seeks to "give back" by contributing to the strength and growth of its community with such things as health care and education. Quantifying this bottom line is relatively new, problematic and often subjective. The Global Reporting Initiative (GRI) has developed guidelines to enable corporations and NGOs alike to comparably report on the social impact of a business. "Planet" (natural capital) refers to sustainable environmental practices. A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and curtail environmental impact. A TBL endeavor reduces its ecological footprint by, among other things, carefully managing its consumption of energy and non-renewables and reducing manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and legal manner. "Cradle to grave" is uppermost in the thoughts of TBL manufacturing businesses which typically conduct a life cycle assessment of products to determine what the true environmental cost is from the growth and harvesting of raw materials to manufacture to distribution to eventual disposal by the end user. A triple bottom line company does not produce harmful or destructive products such as weapons, toxic chemicals or batteries containing dangerous heavy metals for example. Currently, the cost of disposing of non-degradable or toxic products is borne financially by governments and environmentally by the residents near the disposal site and elsewhere. In TBL thinking, an enterprise which produces and markets a product which will create a waste problem should not be given a free ride by society. It would be more equitable for the business which manufactures and sells a problematic product to bear part of the cost of its ultimate disposal. Ecologically destructive practices, such as overfishing or other endangering depletions of resources are avoided by TBL companies. Often environmental sustainability is the more profitable course for a business in the long run. Arguments that it costs more to be environmentally sound are often specious when the course of the business is analyzed over a period of time. Generally, sustainability reporting metrics are better quantified and standardized for environmental issues than for social ones. A number of respected reporting

institutes and registries exist including the Global Reporting Initiative, CERES, Institute 4 Sustainability and others. The eco bottom line is akin to the concept of Eco-capitalism. "Profit" is the economic value created by the organisation after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from traditional accounting definitions of profit. In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment. This is often confused to be limited to the internal profit made by a company or organization (which nevertheless remains an essential starting point for the computation). Therefore, an original TBL approach cannot be interpreted as simply traditional corporate accounting profit plus social and environmental impacts unless the "profits" of other entities are included as a social benefits. Arguments for The following business-based arguments support the concept of TBL:

Reaching untapped market potential: TBL companies can find financially profitable niches which were missed when money alone was the driving factor. Examples include:
1. Adding ecotourism or geotourism to an already rich tourism market

such as the Dominican Republic 2. Developing profitable methods to assist existing NGOs with their missions such as fundraising, reaching clients, or creating networking opportunities with multiple NGOs 3. Providing products or services which benefit underserved populations and/or the environment which are also financially profitable.

Adapting to new business sectors: Since many business opportunities are developing in the realm of social entrepreneurialism, [5]businesses hoping to reach this expanding market must design themselves to be financially profitable, socially beneficial and ecologically sustainable or fail

to compete with those companies who do design themselves as such. For example, Fair Trade and Ethical Trade companies require ethical and sustainable practices from all of their suppliers and service providers. A business which is planning to work with Fair Trade or Ethical Trade companies must design their business model to be TBL. Fiscal policy of governments usually claims to be concerned with identifying social and natural deficits on a less formal basis. However, such choices may be guided more by ideology than by economics. The primary benefit of embedding one approach to measurement of these deficits would be first to direct monetary policy to reduce them, and eventually achieve a global monetary reform by which they could be systematically and globally reduced in some uniform way. The argument is that the Earth's carrying capacity is itself at risk, and that in order to avoid catastrophic breakdown of climate or nature's services, there is a need for a comprehensive reform in global financial institutions similar in scale to that undertaken at Bretton Woods in 1944.Marilyn Waring has been a major proponent of this reform. With the emergence of an externally consistent green economics and agreement on definitions of potentially contentious terms such as full-cost accounting, natural capital and social capital, the prospect of formal metrics for ecological and social loss or risk has grown less remote through the 1990s. In the United Kingdom in particular, the London Health Observatory has undertaken a formal programme to address social deficits via a fuller understanding of what "social capital" is, how it functions in a real community (that being the City of London), and how losses of it tend to require both financial capital and significant political and social attention from volunteers and professionals to help resolve. The data they rely on is extensive, building on decades of statistics of the Greater London Council since World War II. Similar studies have been undertaken in North America. Studies of nature's services and assessments of the value of Earth have tried to determine what might constitute an ecological or natural life deficit.

The Kyoto Protocol relies on some measures of this sort, and actually relies on some value of life calculations that, among other things, are explicit about the ratio of the price of a human life between developed and developing nations (about 15 to 1). While the motive of this number was to simply assign responsibility for a cleanup, such stark honesty opens not just an economic but political door to some kind of negotiation presumably to reduce that ratio in time to something seen as more equitable. As it is, people in developed nations can be said to benefit 15 times more from ecological devastation than in developing nations, in pure financial terms. According to the IPCC, they are thus obliged to pay 15 times more per life to avoid a loss of each such life to climate change the Kyoto Protocol seeks to implement exactly this formula, and is therefore sometimes cited as a first step towards getting nations to accept formal liability for damage inflicted on ecosystems shared globally. Advocacy for triple bottom line reforms is common in Green Parties. Some of the measures undertaken in the European Union towards the Eurocurrency integration standardize the reporting of ecological and social losses in such a way as to seem to endorse in principle the notion of unified accounts, or unit of account, for these deficits. Criticism While many people agree with the importance of good social conditions and preservation of the environment, there are also many who disagree with the triple bottom line as the way to enhance these conditions. The main arguments against it are summarised below.

Division of labour is characteristic of rich societies and a major contributor to their wealth. This leads to the view that organisations contribute most to the welfare of society in all respects when they focus on what they do best: the baker exchanges his loaves with the shoemaker rather than making his own shoes - to the benefit of both and by extension the whole of society. In the case of business the expertise is in satisfying the needs of society and generating a value added surplus. Thus the triple bottom line is thought to be harmful by diverting business attention away from its core competency. Just as charitable organisations like the Salvation Army would not be expected to attend to environmental

issues or pay a cash dividend, and Greenpeace would not be expected to make a profit or succor the homeless, business should not be expected to take on concerns outside its core expertise.

Effectiveness: It is observed that concern for social and environmental matters is rare in poor societies (a hungry person would rather eat thewhale than photograph it). As a society becomes richer its citizens develop an increasing desire for a clean environment and protected wildlife, and both the willingness and financial ability to contribute to this and to a compassionate society. Support for the concept of the triple bottom line itself is said to be an example of the choices available to the citizens of a society made wealthy by businesses attending to business. Thus by unencumbered attention to business alone, Adam Smith's Invisible Hand will ensure that business contributes most effectively to the improvement of all areas of society, social and environmental as well as economic. Nationalism: Some countries adopt the view that they must look after their own citizens first. This view is not confined to one sector of society, having support from elements of business, labour unions, and politicians. Libertarian: As it is possible for a socially responsible person to sincerely believe that the triple bottom line is harmful to society, the libertarian view is that it would be arrogant to force them to support a mechanism for the improvement of society that may, or may not, be the best available. That is, those who would not force Greenpeace and the Salvation Army to generate a profit should not force businesses to take responsibilities outside their area of expertise. Inertia: The difficulty of achieving global agreement on simultaneous policy may render such measures at best advisory, and thus unenforceable. For example, people may be unwilling to undergo a depression or even sustained recession to replenish lost ecosystems. Application: According to Fred Robin's the Challenge of TBL: A Responsibility to Whom? one of the major weaknesses of the TBL framework is its ability to be applied in a monetary-based economic

system. Because there is no single way in monetary terms to measure the benefits to the society and environment as there is with profit, it does not allow for businesses to sum across all three bottom lines. In this regard, it makes it difficult for businesses to recognize the benefits of using TBL for the company, itself.

Criticism from the Left: TBL is viewed as an attempt by otherwise exploitative corporations to avoid legislation and taxation and generate a fictitious people-friendly & eco-friendly image for PR purposes.

Legislation Legislation permitting corporations to adopt a triple bottom line is under consideration in some jurisdictions, including Minnesota and Oregon.[6] Some businesses have voluntarily adopted a triple bottom line as part of their articles of incorporation or bylaws, and some have advocated for state laws creating a "Sustainable Corporation" that would grant triple bottom line businesses benefits such as tax breaks.[7] The triple bottom line was adopted as a part of the State Sustainability Strategy,[8] and accepted by the Government of Western Australia but its status was increasingly marginalized by subsequent premiers Alan Carpenter and Colin Barnett and is in doubt. Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance,[1] is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, selfregulating mechanism whereby business would monitor and ensure its adherence to law, ethical standards, and international norms. Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the

public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, Profit. The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others yet argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. Corporate Social Responsibility has been redefined throughout the years. However, it essentially is titled to aid to an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Development Business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions (known as ethicism) is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws (e.g. higher UK road tax for higher-emission vehicles). Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia, descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.g. ethics codes, social responsibility charters). In some cases, corporations have re-branded their core values in the light of business ethical considerations (e.g. BP's "beyond petroleum" environmental tilt).

The term CSR came in to common use in the early 1970s, after many multinational corporations formed, although it was seldom abbreviated. The term stakeholder, meaning those on whom an organization's activities have an impact, was used to describe corporate owners beyond share holders as a result of an influential book by R Freeman in 1984. [2] ISO 26000 is the recognized international standard for CSR (currently a Draft International Standard). Public sector organizations (the United Nations for example) adhere to the Triple Bottom Line (TBL). It is widely accepted that CSR adheres to similar principles but with no formal act of legislation. The UN has developed the Principles for Responsible Investment as guidelines for investing entities

Triple Bottom Line The Triple Bottom Line, popularly described by the three Ps: People, Planet and Profit, serves to assist corporations in addressing sustainable development holistically. Through CSR corporations contribute to and avoid becoming a barrier to sustainable social, environmental and economic development.

People Social Responsibility Planet Environment Responsibility Profit Economic Responsibility

Module VI
Triple Bottom Line (TBL/3BL) the goal of sustainability
The triple bottom line (abbreviated as "TBL" or "3BL", and also known as "people, planet, profit" or "the three pillars"[1]) captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social. With the ratification of the United Nations and ICLEI TBL standard for urban and community accounting in early 2007, this became the dominant approach to public sector full cost accounting. Similar UN standards apply to natural capital and human capital measurement to assist in measurements required by TBL, e.g. the ecoBudget standard for reporting ecological footprint.

In the private sector, a commitment to corporate social responsibility implies a commitment to some form of TBL reporting. This is distinct from the more limited changes required to deal only with ecological issues.

Definition
In practical terms, triple bottom line accounting means expanding the traditional reporting framework to take into account ecological and social performance in addition to financial performance. The phrase was coined by John Elkington in 1994. It was later expanded and articulated in his 1998 book Cannibals with Forks: the Triple Bottom Line of 21st Century Business. Sustainability, itself, was first defined by the Brundtland Commission of the United Nations in 1987. The concept of TBL demands that a company's responsibility be to stakeholders rather than shareholders. In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder (owner) profit.

The bottom lines

The triple bottom line is made up of "social, economic and environmental" the "people, planet, profit" phrase was coined for Shell by Sustainability, influenced by 20th century urbanism Patrick Geddes's notion of 'folk, work and place'. "People, planet and profit" succinctly describes the triple bottom lines and the goal of sustainability. "People" (human capital) pertains to fair and beneficial business practices toward labour and the community and region in which a corporation conducts its business. A TBL company conceives a reciprocal social structure in which the well-being of corporate, labour and other stakeholder interests is interdependent. A triple bottom line enterprise seeks to benefit many constituencies, not exploit or endanger any group of them. The "up streaming" of a portion of profit from the marketing of finished goods back to the original producer of raw materials, i.e., a farmer in fair trade agricultural practice, is a not unusual feature. In concrete terms, a TBL business would not use child labour and monitor all contracted companies for child labour exploitation, would pay fair salaries to its workers, would maintain a safe work environment and tolerable working hours, and would not otherwise exploit a community or its labour force. A TBL business also typically seeks to "give back" by contributing to the strength and growth of its community with such things as health care and education. Quantifying this bottom line is relatively new, problematic and often subjective. The Global Reporting Initiative (GRI) has developed guidelines to enable corporations and NGOs alike to comparably report on the social impact of a business. "Planet" (natural capital) refers to sustainable environmental practices. A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and curtail environmental impact. A TBL endeavor reduces its ecological footprint by, among other things, carefully managing its

consumption of energy and non-renewables and reducing manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and legal manner. "Cradle to grave" is uppermost in the thoughts of TBL manufacturing businesses which typically conduct a life cycle assessment of products to determine what the true environmental cost is from the growth and harvesting of raw materials to manufacture to distribution to eventual disposal by the end user. A triple bottom line company does not produce harmful or destructive products such as weapons, toxic chemicals or batteries containing dangerous heavy metals for example. Currently, the cost of disposing of non-degradable or toxic products is borne financially by governments and environmentally by the residents near the disposal site and elsewhere. In TBL thinking, an enterprise which produces and markets a product which will create a waste problem should not be given a free ride by society. It would be more equitable for the business which manufactures and sells a problematic product to bear part of the cost of its ultimate disposal. Ecologically destructive practices, such as overfishing or other endangering depletions of resources are avoided by TBL companies. Often environmental sustainability is the more profitable course for a business in the long run. Arguments that it costs more to be environmentally sound are often specious when the course of the business is analyzed over a period of time. Generally, sustainability reporting metrics are better quantified and standardized for environmental issues than for social ones. A number of respected reporting institutes and registries exist including the Global Reporting Initiative, CERES, Institute 4 Sustainability and others. The eco bottom line is akin to the concept of Eco-capitalism. "Profit" is the economic value created by the organisation after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from traditional accounting definitions of profit. In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment. This is often confused to be limited to the internal profit made by a company or organization (which nevertheless remains an essential starting point for the computation). Therefore, an original TBL approach cannot be interpreted as simply traditional corporate accounting profit plus social and environmental impacts unless the "profits" of other entities are included as a social benefits.

Arguments in favor of the concept

The following business-based arguments support the concept of TBL:

Reaching untapped market potential: TBL companies can find financially profitable niches which were missed when money alone was the driving factor. Examples include:
1.

Adding ecotourism to an already rich tourism market such as the Dominican Republic

2. 3.

Developing profitable methods to assist existing NGOs with their missions such as fundraising, reaching clients, or creating networking opportunities with multiple NGOs Providing products or services which benefit underserved populations and/or the environment which are also financially profitable.

Adapting to new business sectors: Since many business opportunities are developing in the realm of social entrepreneurialism, businesses hoping to reach this expanding market must design themselves to be financially profitable, socially beneficial and ecologically sustainable or fail to compete with those companies who do design themselves as such. For example, Fair Trade and Ethical Trade companies require ethical and sustainable practices from all of their suppliers and service providers. A business which is planning to work with Fair Trade or Ethical Trade companies must design their business model to be TBL. Fiscal policy of governments usually claims to be concerned with identifying social and natural deficits on a less formal basis. However, such choices may be guided more by ideology than by economics. The primary benefit of embedding one approach to measurement of these deficits would be first to direct monetary policy to reduce them, and eventually achieve a global monetary reform by which they could be systematically and globally reduced in some uniform way. The argument is that the Earth's carrying capacity is itself at risk, and that in order to avoid catastrophic breakdown of climate or nature's services, there is a need for a comprehensive reform in global financial institutions similar in scale to that undertaken at Bretton Woods in 1944. Marilyn Waring has been a major proponent of this reform. With the emergence of an externally consistent green economics and agreement on definitions of potentially contentious terms such as full-cost accounting, natural capital and social capital, the prospect of formal metrics for ecological and social loss or risk has grown less remote through the 1990s. In the United Kingdom in particular, the London Health Observatory has undertaken a formal programme to address social deficits via a fuller understanding of what "social capital" is, how it functions in a real community (that being the City of London), and how losses of it tend to require both financial capital and significant political and social attention from volunteers and professionals to help resolve. The data they rely on is extensive, building on decades of statistics of the Greater London Council since World War II. Similar studies have been undertaken in North America. Studies of nature's services and assessments of the value of Earth have tried to determine what might constitute an ecological or natural life deficit. The Kyoto Protocol relies on some measures of this sort, and actually relies on some value of life calculations that, among other things, are explicit about the ratio of the price of a human life between developed and developing nations (about 15 to 1). While the motive of this number was to simply assign responsibility for a cleanup, such stark honesty opens not just an economic but political door to some kind of negotiation presumably to reduce that ratio in time to something seen as more equitable. As it is, people in developed nations can be said to benefit 15 times more from ecological devastation than in developing nations, in pure financial terms. According to the IPCC, they are thus obliged to pay 15 times more per life to avoid a loss of each such life to climate change the Kyoto Protocol seeks to implement exactly this formula, and is therefore

sometimes cited as a first step towards getting nations to accept formal liability for damage inflicted on ecosystems shared globally. Advocacy for triple bottom line reforms is common in Green Parties. Some of the measures undertaken in the European Union towards the Euro currency integration standardize the reporting of ecological and social losses in such a way as to seem to endorse in principle the notion of unified accounts, or unit of account, for these deficits.

Criticism
While many people agree with the importance of good social conditions and preservation of the environment, there are also many who disagree with the triple bottom line as the way to enhance these conditions. The main arguments against it are summarized below.

Division of labour is characteristic of rich societies and a major contributor to their wealth. This leads to the view that organisations contribute most to the welfare of society in all respects when they focus on what they do best: the baker exchanges his loaves with the shoemaker rather than making his own shoes - to the benefit of both and by extension the whole of society. In the case of business the expertise is in satisfying the needs of society and generating a value added surplus. Thus the triple bottom line is thought to be harmful by diverting business attention away from its core competency. Just as charitable organisations like the Salvation Army would not be expected to attend to environmental issues or pay a cash dividend, and Greenpeace would not be expected to make a profit or succor the homeless, business should not be expected to take on concerns outside its core expertise. Effectiveness: It is observed that concern for social and environmental matters is rare in poor societies (a hungry person would rather eat the whale than photograph it). As a society becomes richer its citizens develop an increasing desire for a clean environment and protected wildlife, and both the willingness and financial ability to contribute to this and to a compassionate society. Support for the concept of the triple bottom line itself is said to be an example of the choices available to the citizens of a society made wealthy by businesses attending to business. Thus by unencumbered attention to business alone, Adam Smith's Invisible Hand will ensure that business contributes most effectively to the improvement of all areas of society, social and environmental as well as economic. Nationalism: Some countries adopt the view that they must look after their own citizens first. This view is not confined to one sector of society, having support from elements of business, labour unions, and politicians. Libertarian: As it is possible for a socially responsible person to sincerely believe that the triple bottom line is harmful to society, the libertarian view is that it would be arrogant to force them to support a mechanism for the improvement of society that may, or may not, be the best available. That is, those who would not force Greenpeace and the Salvation Army to generate a profit should not force businesses to take responsibilities outside their area of expertise. Inertia: The difficulty of achieving global agreement on simultaneous policy may render such measures at best advisory, and thus unenforceable. For example, people may be unwilling to undergo a depression or even sustained recession to replenish lost ecosystems.

Application: According to Fred Robin's The Challenge of TBL: A Responsibility to Whom? one of the major weaknesses of the TBL framework is its ability to be applied in a monetary-based economic system. Because there is no single way in monetary terms to measure the benefits to the society and environment as there is with profit, it does not allow for businesses to sum across all three bottom lines. In this regard, it makes it difficult for businesses to recognize the benefits of using TBL for the company, itself.

Legislation
Legislation permitting corporations to adopt a triple bottom line is under consideration in some jurisdictions, including Minnesota and Oregon. Some businesses have voluntarily adopted a triple bottom line as part of their articles of incorporation or bylaws, and some have advocated for state laws creating a "Sustainable Corporation" that would grant triple bottom line businesses benefits such as tax breaks. The triple bottom line has been adopted as a part of the State Sustainability Strategy, accepted by the Government of Western Australia.