The Triple Bottom Line: How are we counting what?

Alistair Cook, GSSE MBA Candidate

Alistair Cook, GSSE MBA Candidate

11/13/13 – This guest post is written by Alistair Cook, a student in the 7th Cohort of the Global Social and Sustainable Enterprise MBA at Colorado State University.

The Global Social and Sustainable Enterprise MBA is marketed as a ‘triple bottom line’ program, developing ventures and graduates who understand and create ideas around the idea of there being not just the usual financial bottom line, but also looking at the social and environmental effects of their ventures.  After – admittedly – only a short part of the eighteen month degree completed, the questions “is this true?” and “what is meant by a triple bottom line approach?” have been troubling me, brought into sharp relief by a recent class on accounting.

In its simplest form, the International Institute for Sustainable Development defines the triple bottom line as “capture[ing] the spectrum of values that organizations must embrace – economic, environmental and social.  In practical terms, triple bottom line accounting means expanding the traditional company reporting framework to take into account not just financial outcomes but also environmental and social performance.”  But in practice how is this done?

Forced into a new system

Why are you forcing me into your system again? I thought nature was my domain…

To measure any system or value, financial or otherwise, a methodology and base unit has to be selected.  Within the financial pillar of the triple bottom line this is simple: count the money.  Naively perhaps, given the social and environmental strengths of this program, I had hoped that the form of accounting for the other two pillars might be something new, something innovative, something appropriate.  Unfortunately, possibly due to a lack of legitimate alternatives, we seem to be following the age old path of monetizing the environment and social aspects of our new ventures.  This is the pathway which founded corporate social responsibility programs in the private sector and full cost accounting in the public sector.  It’s also a methodology that the history of the feminist movement should teach us doesn’t work.

The feminist movement gave us a clear example of the dangers of trying to force an inappropriate measurement methodology and set of values to solve a complex issue.  The example of the ‘ladette’ stage of feminism demonstrates this admirably: defined by the urban dictionary as “a girl who, in answer to the male ‘lad culture’ of the 1990’s, bizarrely adopted the exact same behavior as the men.”  Analysts believe the ladette phenomenon was driven by increasing levels of financial independence and parity to men among young women.  However, ‘equality’ was still being defined by the other half of the human species.  Perhaps the driver for feminism should be to create a truly equal world – one where the measurement methodology wasn’t defined in terms of power and money before women could vote and which fully recognizes the capabilities and strengths of both women and men.  Perhaps then some of today’s contentious issues (such as maternity leave, glass ceilings, and salary inequalities) would not be so divisive.

Translated back into the world of accounting, we have the concept of Natural Capitalism.   Monetizing the environment by creating economic rights and markets through systems like carbon accounting, water rights and other economic models seems to be once again forcing an issue of inequality (natural resource degradation) into an inappropriate model based on financial accounting.  It seems inherently dangerous to be trading environmental futures and using all the same financial instruments as the economic markets, particularly on environmental systems which aren’t as easily quantifiable as money.  But is there an alternative? Or are we stuck with an imperfect, inappropriate financial currency-based accounting system for the environment?

This entry was posted in Highly Applied Curriculum, Impact Investing and Startup Financing, Sustainable Enterprise and tagged , , . Bookmark the permalink.

1 Response to The Triple Bottom Line: How are we counting what?

  1. You raise some really great questions, Alistair! Particularly, whether the concept of “accounting” inherently requires that all value/impacts that an enterprise generates be translated into monetary terms in order to be “accounted for,” or whether there are other, non-monetary, ways of representing the social, environmental, and economic value of an enterprise? The BCorp certification program might be seen as one such attempt to quantify in non-financial terms the triple bottom line impacts of firms ( Another (for impact investing), is the Global Impact Investment Rating System (GIIRS):, and for sustainability reporting, the Global Reporting Initiative ( Both of these systems attempt to “account for” the triple bottom line performance of enterprises, yet would probably not be considered “accounting” systems in the traditional sense of financial accounting.

    From a more traditional accounting perspective, I wonder if the course on Triple Bottom Line Accounting (ACCT 553S) from Bainbridge Graduate Institute ( might offer some useful tools? or perhaps it leaves unanswered these same tough questions…

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