Certainly the philosophy of the Triple Bottom Line (“3BL” or “TBL”) is unconventional when compared with accepted business practices which are based upon the typical single bottom line of profit. We know that profit is essential to business survival, but we should ask how this expanded 3BL business model gained traction. For an answer, we need to look at the history of 3BL, and that history shows us that environmental and social idealism have been closely linked since the modern global environmental movement began in 1972.
In 1972, Maurice Strong, a patriarch of the global environmental movement who now sits on the board of directors for the Chicago Climate Exchange, led the United Nations Conference on the Human Environment, which met in Stockholm and released a declaration linking the human exerience to nature. It acknowledged that “man is both creature and moulder of his environment” and has advanced to the point where he has the power to significantly affect nature and, by extension, his own intellectual, moral, social and spiritual growth. The global social ramifications of man’s environmental stewardship are thus clearly stated in the Stockholm declaration:
The protection and improvement of the human environment is a major issue which affects the wellbeing of peoples and economic development throughout the world; it is the urgent desire of the peoples of the whole world and the duty of all Governments.
The UN felt the environment and social well being were so linked that the declaration’s first Principle focused on it:
Man has the fundamental right to freedom, equality and adequate conditions of life, in an environment of a quality that permits a life of dignity and well-being, and he bears a solemn responsibility to protect and improve the environment for present and future generations. In this respect, policies promoting or perpetuating apartheid, racial segregation, discrimination, colonial and other forms of oppression and foreign domination stand condemned and must be eliminated.
Without question, the UN has made a particular commitment to social and environmental ideology since the very beginning of the green movement, and in the Stockholm declaration we can see much of the framework for global socio-environmental ideology already in place.
In 1987, the UN’s World Commission on Environment and Development (aka the “Brundtland Commission”), of which Maurice Strong was a member, first defined the now ubiquitous term “sustainability,” which in its essence was the integration of the three pillars of 3BL. Moving forward, Strong became Secretary General of the next major UN environmental summit, the United Nations Conference on Environment and Development (UNCED) (i.e., the “Earth Summit”), held in Rio de Janeiro, and created the Earth Council as a means of facilitating sustainable strategies worldwide.
The Rio summit was pivotal in the integration of 3BL ideals into what we now call “sustainable development.” The summit spawned Agenda 21, a comprehensive action plan with 27 guiding principles commonly known as the “Rio Declaration.” In response to these recommendations, President Bill Clinton, via executive order, created the President’s Council on Sustainable Development (PCSD), which was essentially a restatement of the principles of the Rio Declaration. Not surprisingly, the three pillars of 3BL (i.e., “People, Planet, Profit” — again, the fundamentals of “sustainability”) were integral in both of these initiatives. For instance, note Principle 25 of the Rio Declaration:
Peace, development and environmental protection are interdependent and indivisible.
Similarly, note item 10 of the PCSD’s We Believe Statement (see page vi of this link):
Economic growth, environmental protection, and social equity are linked. We need to develop integrated policies to achieve these national goals.
With the three pillars of sustainability (i.e., “People, Planet, Profit”) firmly established as a global objective, the UN has continued to move forward in its efforts to implement them across the globe. In September of 2000, the UN issued its Millenium Declaration which reaffirmed its commitment to Agenda 21. Two years later, the Johannesburg Summit, one of the most recent major environmental conferences, met to identify targets and adopt concrete steps for implementing Agenda 21.
(As a sidenote, for those wondering where today’s environmental activities fit into the picture, the Rio Summit produced another document in addtion to Agenda 21, the United Nations Framework Convention on Climate Change (UNFCCC or FCCC). This was a non-binding greenhouse gas reduction treaty but it provided for the 1997 Kyoto Protocol, which does mandate emissions limits for the nations that adopt it. The parties of the UNFCCC have met annually since 1995 to progress their goal of mandating that developed nations reduce emissions to meet the Kyoto protocol. The 2009 Copenhagen conference was the most recent such meeting. Also of interest, in pursuing its agenda, the UNFCCC relied upon the publications of the Intergovernmental Panel on Climate Change (IPCC), which were at the heart of the Climategate scandal.)
Returning to the question of why traditional businesses have adopted the inexact science of 3BL, we must realize that the Triple Bottom Line philosophy provides the foundation for the modern definition of sustainability, a paradigm which has been embraced and nurtured for nearly 40 years, and the foundation for today’s global policy and international relationships. For better or worse, the concept of sustainability has become woven into the very fabric of our society on a global — as well as local — level. Because ShoreBank was specifically founded on a commitment to environmental and social values, it comes as no surprise that it embraced the 3BL philosophy. However, it now also becomes more understandable why other, more traditional businesses are now professing a commitment to 3BL as well. Businesses which seek to be successful often cater to the current values of the culture and adopt the evolving mindset of the customer base.
We are now witnessing a shift in cultural values and priorities as the work of 40 years of cultivating 3BL philosophy begins to bear fruit. We are in a transitional phase. However, what are we transitioning into? What is our destiny? Our third and final article will seek to answer that.
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