Prolonged economic growth, and the steady rise of living standards has increased citizen expectations for services from government and consumer satisfaction from business. At the same time, the ability for meeting those demands diminishes due to a long-term contraction in the size and scope of government. This contraction in government has also reduced the capacity of the public sector to regulate directly the behaviour of the business community. Linked with increasing global mobility of corporations this has created an increased need for social regulation of the business sector on behalf of a relatively immobile community.

All of this is occurring alongside a widespread realisation of the fundamental and, in some cases, irreversible damage done to the global eco-system by a century of rapid economic growth. This realisation has prompted rapid development of a new community-based pressure group politics reflecting the interests of environmentalists, consumers, shareholder activists and so forth.

Unexpectedly, all of these developments are now coalescing in an increased interest in one particular approach to ensuring sustainability - the 'triple bottom line' approach.

The triple bottom line concept is designed to highlight that consideration of only one measurement of success - the financial 'bottom line' - is inadequate in a number of respects. Triple bottom line thinking, in contrast, insists that there are at least two other aspects of doing business today that require equal consideration and active managerial attention - the social impacts (for example, health, welfare and safety), and the environmental impacts that a company's activities may be having.

Advocates of triple bottom line reporting are quick to remind sceptics that having three reporting considerations instead of one is also necessary, and irretrievably linked to, the financial bottom line. In other words, financial success itself is reliant upon not only economic sustainability but also social and environmental sustainability. A company that can meet the needs of the present in terms of social and environmental impact, without compromising the needs of the future, is, so the thinking goes, more likely to appeal to investors and customers alike, and thus be financially successful. This is done by using it as a selling point in the marketplace, through appealing to customers concerned about the environment and the reduction of risk to workers, consumers and the public in general.

Companies that incorporate this approach in their strategies can, it is claimed, generate substantial competitive advantages. Hence, triple bottom line thinking is not a short-lived marketing ploy but a strategy that is designed to enhance long-term competitiveness. Explaining his decision to work with Dutch oil giant Shell in his 1997 book Cannibals with Forks: the Triple Bottom Line of the 21st Century (Capstone, Oxford), John Elkington wrote, "(at) the heart of the emerging value creation concept is a recognition that for a company to prosper over the long term, it must continuously meet society's needs for goods and services without destroying natural or social capital" (p. 109).

The term 'triple bottom line' was, in fact, the brain-child of Elkington, a British environmentalist and chairman of the London-based consultancy, SustainAbility Ltd. Reading the 1982 bestseller In Search of Excellence by Tom Peters and Robert Waterman, he noticed that environmental performance was not mentioned at all. He began marketing the term 'environmental excellence', and, in 1995, coined the phrase 'triple bottom line', underlining his premise that corporations have responsibilities to the wider community, not just to their shareholders. He developed the idea that companies need to be able to measure and display 'sustainability', using a range of measurable performance indicators.

Despite the dominance of 'economic rationalism' in developed countries, with its connotation of remorseless pursuit of profit, the idea that corporations have a broader corporate social responsibility to more than just shareholders, is now being widely explored in the public sector, if not in an expanding number of boardrooms too.

Are organisations who are practising triple bottom line management doing better than those who are not? Based on responses to questionnaires sent to thousands of companies worldwide, researchers have been trying to answer this question. Moves have been made since December 1993 to list, measure and compare the performance of companies that meet 'sustainability' criteria. There has been careful tracking - audited by PricewaterhouseCoopers - of those companies that were identified by their responses as having met agreed performance indicators. In September 1999, the Dow Jones Sustainability Group Index (DJSGI) was published for the first time, introducing to analysts and investors the notion of sustainability as a performance indicator. 'Sustainable' is defined according to a range of criteria designed to measure a firm's performance in economic, environmental and social terms. The final ratings are based upon the ability of a company to encourage stakeholder relationships, respect human rights, ensure appropriate employment conditions, and foster an environment of anti-corruption, amongst other things. The organisation responsible for analysing the data for the DJSGI is SAM Sustainability Group, a Zurich-based asset management company founded in 1995. The index is currently composed of 229 firms (market value US$4.3 trillion) across 22 countries. These firms (including Fujitsu, Unilever, Skandia and Honeywell) are, according to the Index, the top 10 percent of companies (in each of 68 world-wide industries) operating from sustainability-related management practices.

Despite the enthusiasm and energy, it is still too early to tell whether the current enthusiasm for triple bottom line thinking will lead to major, sustainable changes in the operation of the business community and the public sector. However, the momentum for change is growing and 'sustainability' and 'triple bottom line' terminology will soon be standard parlance in boardroom discussions around the world.

Details about UniSA research on Triple Bottom Line and Corporate Social Responsibility research can be found at http://business.unisa.edu.au/cae/tbl

Rick Sarre is Associate Professor of Law and Criminology, in the School of International Business, UniSA and Convenor of the Legal and Business Regulation Research Group at UniSA.

Dr Gerry Treuren is Deputy Director, Centre for Applied Economics at UniSA and currently convenes the Triple Bottom Line group.

This article first appeared in Environment South Australia, Vol 8 No 4 - October 2001. The whole or part of this journal may be reproduced without permission provided that acknowledgement is made and provided the reproducer agrees to provide gratis a right of reply in the publication or medium in which the reproduction was published or broadcast, and in a form similar to the reproduction should the Conservation Council of SA or its agents desire to make such a reply. Views expressed in this publication are not necessarily those of the Conservationn Council of South Australia. Non-sexist and non-racist language is a policy of Environment South Australia.

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