How can we prove a product is sustainable?
Sustainability encompasses more than just energy efficiency and renewable sources. Understanding the relationships between the economy, society, and the environment is necessary to achieve true sustainability. We must work toward a mindset of sustainability that permeates all facets of our daily life in the local, societal, and global spheres.
The Triple Bottom Line Business Model & Analysis
The triple bottom line hypothesis broadens the definition of business success indicators to take into account contributions to social, economic, and environmental well-being. “People, Planet, and Profit” are sometimes referred to as the three “P’s” in terms of the bottom line.
The triple bottom line is a framework for change that businesses and other organisations can use to assist them transition to a more sustainable and regenerative future. It includes tools that assist in measuring, benchmarking, setting goals, enhancing, and finally evolving toward more sustainable systems and models. A company will not be successful in the long run if it just prioritises profit while ignoring the needs of people and the environment.
People: Respond to Various Stakeholders’ Needs
People refers to all stakeholders in an ecosystem. An organisation’s social impact replies on people involved in the entire value chain. It’s crucial to distinguish between shareholders and stakeholders in a company. Businesses have always prioritised shareholder value as a measure of success, which means they work to create value for individuals who own firm shares.
Businesses have switched their attention to generating value for all stakeholders who are touched by their actions, including consumers, employees, individuals throughout the supply chain, and community members, as they have embraced sustainability more and more.
Fair salaries, worker safety initiatives, impartial employment practises, and community involvement activities are a few examples.
Planet: Responsible to Our Environment
Planet, quite naturally, refers to the environmental impact of an organisation. Companies have significantly impacted the environment and climate change through their involvement in pollution and poor air quality.
Our environment provides us with the energy and raw resources we need for construction and transportation, as well as the unpolluted air, clean water, and fresh food that are among our most fundamental needs. If we want to have and keep having the resources to meet our requirements, environmental sustainability is crucial.
Environmental sustainability, in the broadest sense, refers to the entire global ecosystem (oceans, freshwater systems, land and atmosphere). However, the fundamentals of environmental sustainability may be applied to ecosystems of any size, even those as modest as a little backyard garden.
Green Token, for example, focuses on three environmental aspects: Frontier decarbonisation by investing in startups that aims at reducing carbon emissions; Waste management by leveraging technologies to manage and reduce waste pollution; and Food security by reducing the amount of meat consumption as well as increasing rural communities’ net income.
Profit: Purpose-Driven Business
Profit describes the effects an organisation has, both favourable and unfavourable, on the local, national, and global economies.
This covers any other economic effects an organisation has, such as producing innovation, paying taxes, building money, or creating jobs.
The profitability a company produces for its shareholders, or its financial performance, is what determines how successful it is in a capitalist system. Key corporate decisions and strategic planning activities are typically carefully crafted to maximise earnings while minimising expenses and risk.
Many businesses’ objectives have previously stopped there. Leaders with a purpose are now realising that they have the ability to use their companies to change the world for the better without sacrificing financial performance. Adopting sustainability measures has frequently been shown to boost corporate success.
Patagonia: One of the pioneers of TBL Business Model
The aim of Patagonia is to produce high-quality clothing without harming the environment. To assist address the plastic catastrophe, they began making clothing from recycled plastic bottles in 1993.
After that, in 1994, Patagonia discovered that the cultivation of cotton was the source of 25% of all hazardous pesticides used in agriculture.
As a response, they moved to organic cotton, which increased their expenses by up to 100% in some circumstances. They have also been known to avoid doing business with vendors who use cruel methods to treat animals.
Patagonia’s Triple Bottom Line – Planet
Through their well-known campaign, “Don’t Buy This Jacket”, Patagonia encourage people to consider if they truly need to buy something. In 2016, they took this a step further by donating 100 percent of their global retail revenues to non-profit organisations that address environmental issues.
Around the same time Patagonia changed from donating 10% of earnings to 1% of sales to environmental programmes, Yvon (the founder of Patagonia) and his business partner Craig Matthews founded 1 percent for the Planet.
In order to further support the planet, Patagonia established Tin Shed Ventures in 1993. This investment fund makes investments in businesses that are pursuing initiatives such as regenerative agriculture, renewable energy, water conservation, waste reduction, and the production of sustainable materials.
Patagonia’s Triple Bottom Line – People
As you can tell by the title of Yvon Chouinard’s book, “Let My People Go Surfing”, Patagonia has long been a proponent of work-life balance. They have worked to improve employee lives and as a result have a very low employee turnover rate.
Here are some measures they have put into place: When the weather is nice, the company actually does let its staff to go surfing, or they can also go biking or rock climbing, boosting health and wellbeing. Patagonia makes sure their supply network also treats employees properly, and they’ve stopped working with suppliers that don’t.
In 2010, they audited 90% of their supply chain to check on their suppliers’ adherence to social and environmental commitments. Here are just some of the organisations they have partnered with throughout the years: The Conservation Alliance, The Sustainable Apparel Coalition, The Fair Labor Association, Regenerative Organic product labeling, The Common Threads Initiative, B Corporation, American Sustainable Business Council.
Patagonia’s Triple Bottom Line – Profit
Reading about Patagonia almost gives the impression that their success has just been a by-product of their fundamental aim to provide ecologically responsible apparel, a mission that their customers could support and get behind, helping them to treble their sales in the last ten years.
It employs many growth techniques, such as executing its marketing plan to demonstrate its dedication to the Triple Bottom Line will help it attract customers and maintain and build its base of devoted customers, which boosts its profitability.
In 2012, Patagonia generated $1 billion in revenue.