5. The Investopedia article gives examples of four companies that use the triple bottom. Select one and briefly describe what the company is doing. Please do not just copy and paste from the article. I thought I would include an assignment or two relating environmental and social concerns with accounting. This assignment involves the concept of the "triple bottom line. I have included an article from Investopedia, "Triple Bottom Line." We will remind ourselves the objective of Financial Reporting as developed by the FASB. You can see the Concept Statement related to the objectives of Financial Reporting here: https://tinyurl.com/yckcpjwt By Will Kenton Updated January 09,2022 Reviewed by lanet Berry-Johnson What is the Triple Bottom Line (TBL)? In economics, the triple bottom line (TBL) maintains that companies should commit to focusing as much on social and environmental concerns as they do on profits. TBL theory posits that instead of one bottom line, there should be three: profit, people, and the planet. A TBL seeks to gauge a corporation's level of commitment to corporate social responsibility and its impact on the environment over time. In 1994, John Elkington-the famed British management consultant and sustainability guru-coined the phrase "triple bottom line" as his way of measuring performance in corporate America. The idea was that a company can be managed in a way that not only makes money but which also improves people's lives and the well-being of the planet. 1 Key Takeaways - The concept behind the triple bottom line is that companies should focus as much on social and environmental issues as they do on profits. - The TBL consists of three elements: profit, people, and the planet. - The triple bottom line aims to measure the financial, social, and environmental performance of a company over time. - TBL theory holds that if a firm looks at profits only, ignoring people and the planet, it cannot account for the full cost of doing business. Understanding the Triple Bottom Line (TBL) In finance, when speaking of a company's bottom line, we usually mean its profits. Elkington's TBL framework advances the goal of sustainability in business practices, in which companies look beyond profits to include social and environmental issues to measure the full cost of doing business. Triple-bottom-line theory says that companies should focus as much attention on social and environmental issues as they do on financial issues. TBL theory also says that if a company focuses on finances only and does not examine how it interacts socially, it is not able to see the whole picture and therefore cannot account for the full cost of doing business. According to TBL theory, companies should be working simultaneously on these three bottom lines: - Profit: This is the traditional measure of corporate profit-net income. - People: This measures how socially responsible an organization has been throughout its history. - Planet: This measures how environmentally responsible a firm has been. Profits do matter in the triple bottom line-just not at the expense of social and environmental concerns. Challenges of Applying the Triple Bottom Line The following are challenges that companies can face when applying the triple bottom line. Measuring the TBL A key challenge of the TBL, according to Elkington, is the difficulty of measuring the social and environmental bottom lines. Profitability is inherently quantitative, so it is easy to measure. What constitutes social and environmental responsibility, however, is somewhat subjective. How do you put a dollar value on an oil spill-or on preventing one-for example? Mixing Inverse Elements It can be difficult to switch gears between prionities that are seemingly antithetical-such as maximizing individual financial returns while also doing the greatest good for society. Some companies might struggle to balance deploying money and other resources, such as human capital, to all three bottom lines without favoring one at the expense of another. Ignoring the TBL. Framework There can be dire repercussions when companies ignore the TBL in the name of profits. Three well-known examples of this are: - Destruction of the rainforest - Exploitation of labor - Damage to the ozone layer Consider a clothing manufacturer whose best way to maximize profits might be to hire the least expensive labor possible and to dispose of manufacturing waste in the cheapest way possible. These practices might well result in the greatest possible profits for the company, but at the expense of miserable working and living conditions for laborers, and harm to the natural environment and the people who live in that environment. Examples of Companies That Subscribe to TBL or Similar Concepts Today, the corporate world is more conscious than ever of its social and environmental responsibility. Companies are increasingly adopting or ramping up their social programs. Consumers want companies to be transparent about their practices and to be considerate of all ucts if it means that workers are paid a thing wage and the environment cted in the production process. The number of firms - of all types and sizes, both publicly and privaselyc helig-that subscribe to the triple-bothom-line concept, or something similar, is staggering. Here are a handful of these companies: Ben \& Jerry's Ben \& Jemy's is the ice cream company that made conscious capitalism central to its strategy. As stated on its website. "Ben 8 Jemy's is founded on and decicated to a sustainable coeporate concept of linked prosperty. "The company opposes the use of recombinant bovine growth hormone (rBGH) and genefically modified organisms (GMOs) and fosters myriad values such as fair trade and climate justice. LEGO The LEGO Group (privately held; Billund, Demark) has formed partnerships with organizations like the nongoyemmental organization (NGO) World Wildife Fund. In addition, LEGO has made a commitment to reducing its carbon footprint and is working towards 100% renewable energy capacity by 2030. In addition to partnering with the World Wildide Fund, the LECO Group has also pledged to transition to renewable bioplastics. The Crst plant-derived set of LECO toys was launched in 2019. Mars Mars incorporated (privately heid; McLean, Va.) has a sustainable cocoa initiative caled Cocoa for Generations. It requires cocos tarmers to be tair trade certified to ensure they follow a code of fair treatment to workers peoviding labor. In euchange for certification, Mars provides productivity technology and buys cocoa at premium prices. Starbucks Starbucks Corporation (S8UX), has been socially and environmentally focused since its inception in 1971 . The company has hired more than 26.000 veterans since 2013 and is committed to hiring 5.000 more por year going forward. What Are the 3 Elements of the Triple Bottom Line (TBL)? The triple bottom line is an accounting framework that incorporates three dimensions of perfomance: social, emvironmental, and financial. These three facets can be summarized as "people, planet, and profit." How is TBL. Different From the Financial Bottom Line? Including social, human, and environmental capital along with a company's financial capital makes it possible to geta more accurate picture of a company's impact on society. Who Came Up With the Triple Bottom Line? The triple bottom line was conceived by entrepreneur and business writer John Elkington in 1904 while at the think tank SustainAbjly, and it was later incorporated into the oll company Sheif's first sustainabilty report in 1997