“Two-thirds of consumers around the world say they choose brands because of their stand on social issues, and over 90% of millennials say they would switch brands for one which champions a cause.”
What are the benefits of a Triple Bottom Line?
The triple bottom line (TBL) is a framework used by business to factor in more than just financial profits. The triple bottom line approach focuses on 3 P’s: people, profit, and planet. It puts an emphasis on companies to focus just as much on social and environmental concerns as the company does on profits. Utilizing the triple bottom line approach is essential for B-Corps, but it also helps this classification of companies. Growth in triple bottom line thinking has occurred over the past 10 years as companies have realized the added benefits.
The triple bottom line benefits two main aspects of a business. These include employee engagement and customer loyalty. An improvement of a combination of these aspects can increase revenue and decrease costs. A better working environment has led companies that operate a triple bottom line to have a larger talent pool to hire its workers. Simply put, people want to work at companies that invest resources to create a comfortable, positive working environment. According to Cone Communications, 78% of millennials use corporate social responsibility as part of the decision on where to work. A company using TBL creates an atmosphere that encourages job applicants and enthusiasm when working. Employees will be more likely to “buy in” to the company’s culture. As employees buy in, processes become more efficient since inspired people tend to work harder.
People also want to buy from companies that treat their employees and environment correctly. Adopting a triple bottom line helps the top line as well. A company taking a stand for a cause is more likely to gain consumers. According to Unilever’s CEO, “Two-thirds of consumers around the world say they choose brands because of their stand on social issues, and over 90% of millennials say they would switch brands for one which champions a cause.” When a company places the same value on people, the planet and profit it shows they champion a cause greater than its bottom line. Adopting the triple bottom line and making it visible can encourage new customers to try a product and continue to use it.
A B-Corp that has seen benefits from the triple bottom line is Patagonia. Patagonia has been using the triple bottom line since before it was called the triple bottom line. They have very favorable perks for employees such as donating to causes, a child-care center in its headquarters and an unlimited vacation policy.
Patagonia also participates in 1% for the planet which donates 1% of all its sales to grassroots campaigns. The company has also taken out ads in the New York Times preaching sustainability and responsible consumer habits. In 2016, Patagonia donated its total Black Friday sales ($10 Million) to grassroot campaigns. These actions combined with its quality products have seen its job applicants and sales revenues reach extreme levels of growth.
When a company adopts the triple bottom line it shows both employees and consumers that it cares about more than just maximizing profits. The triple bottom line increases revenue by incentivizing consumers to switch products and increases employee buy-in which helps build efficiency of work and the quality of products.