Feature
Issue No. 2 - September/October 2001
The Value of a Triple Bottom Line
by James Bowman
The phrase was coined six years ago by UK environmentalist Robert Elkington, chairman of the London—based consultancy SustainAbility Ltd, who believed that corporations had responsibilities to the wider community, not just to their shareholders. He developed the idea that companies should be able to measure and display sustainability, using a range of measurable performance indicators.
It came at a time when corporate behaviour was coming under ever more stringent scrutiny from the media and the community at large, as well as shareholders.
The trend has been a demand for greater disclosure about the totality of a company’s activities — not just from shareholders but from a wider group of stakeholders including employees, local communities, non—government organisations and other specific interest groups.
In Australia we have green shareholder activist groups who are climbing onto more share registers. BHP has its Shareholders for Social Responsibility, Boral has a Green Shareholders Group and Rio Tinto’s ERA has the Wilderness Society.
What has become increasingly evident is that this additional information can have a significant potential impact on an organisation’s reputation, with a consequent impact on its future performance and share market value.
In response to this, in 1999 Dow Jones published its first Dow Jones Sustainability Index that measures company performance in economic, environmental and social terms. The index is composed of 229 firms with a total market value of $A8.2 trillion, chosen from the top 10 per cent of the most sustainable companies in 68 global industries.
SHAREHOLDERS DEMAND MORE ACCOUNTABILITY
“It is clear that more and more shareholders and other stakeholders are now demanding greater accountability from company managers on issues other than simply financial returns to investors,” say Associate Professor Rick Sarre and Dr Gerry Treuren from the University of...
