Triple Bottom Line Accounting, Essay Example

Introduction

The concept of triple bottom line accounting is an approach that considers three distinct aspects namely: Performance, Financial and Environment. This is a departure from more traditional frameworks because it includes the environment. John Elkington was the person who introduced this approach in the mid 1990’s. The idea is that it went beyond the more traditional approach to consider both sociological and environmental considerations this more comprehensive approach was aimed at supporting sustainability goals. (Hall, T.J. 2013).

Ethical Issues

Environmental measures are important because they represent measures on the economic environment of the business that may potentially impact its viability. This may examine long range trends in order to consider sustainability. Social measures examine variables such as resources, health, education etc. (Banhegyi, 2007)

An example of an ethical dilemma may be a high tech’ firm located in silicon valley that is considering relocating because of earthquake issues (environmental), however this would be offset by a large number of highly skilled specialist staff who would not wish to leave from this lucrative area (social). (Henriques, A. 2012)

Conclusion

The TBLA approach has provided a more accurate way of accounting but is has not been without significant challenges, in particular getting the right determinants of measurement into each of the three catagories. This includes finding the right type of data and the calculation of a policy model towards sustainability. However, once these issues are overcome the model does allow for creating a truly longer term outlook and the ramifications that result from different decision making points. (MacDonald, C. 2004)

References

Adrian Henriques, J. R. (2012). The Triple Bottom Line: Does It All Add Up. London : Earthscan.

Banhegyi, S. (2007). Fresh Perspectives: Management. Cape Town SA: Pearson.

Hall, T. S. (2013, 1 21). The triple bottom line: what is it and how does it work? Retrieved from IBRC: http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html

MacDonald, W. N. (2004). Getting to the Bottom of “Triple Bottom Line”. Business Ethics Quarterly Vol 14(2), 243-262.