The Triple Bottom Line and the Systemic Approach. Sustainability has been the apple of the eyes of the corporate sector in recent years which in it seeks for ...
The Triple Bottom Line and the Systemic Approach
Dr. José Julio Ferraz de Campos Jr.
08/2017
The Triple Bottom Line and the Systemic Approach Sustainability has been the apple of the eyes of the corporate sector in recent years which in it seeks for means to reach new markets while perfecting its productive system. However, we have not yet observed a corresponding improvement in socioenvironmental, global, national or even regional parameters. In fact, as we look more closely at the initiatives taken, considering the process and corporate life cycle as well as its externalities, we see that most acclaimed sustainability actions fall into the prism of green marketing,
with little or nothing actually adding to the Social and environmental
improvement (1). The reason for this falls on several causes, from the lack of multidisciplinary qualification of professionals of sustainability to the real lack of interest in the subject by the corporations. The most frequent result can be summarized in the most frequent questioning, and paradoxically the simplest one to answer, "how to be sustainable?". The main cause for this difficulty lies in the way sustainability is approached within corporate interests. There are currently two distinct ways of addressing the issue of sustainability, the Triple Bottom Line (TBL) and Systemic. In this article, the similarities and differences between both will be presented. It is hoped that for those unfamiliar with the theory of complex systems, a light can be shed to eliminate the confusion between both concepts. 1
The Triple Bottom Line An alert observer can verify that among the diverse professionals of the private sector,
the definition of sustainability is varied. Depending on the professional questioned, it will point out a different context for sustainability. The CEO will be concerned about the company's sustainability in the market, HR with that of its employee's health and safety, and the responsibility for the environment (if well qualified) with the environmental and social area.
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As a result, we have different definitions to explain sustainability such as the company's ability to remain competitive (CEO), employee satisfaction in the workplace (HR), the financial health of the company (Financial) and adherence to environmental standards to meet stakeholder interests (Environment). Different views with different opinions about sustainability. The main reason for such a variety of approaches lies in what is known as the Triple Bottom Line, proposed in 1994 by the British consultant John Elkington, and taught since them at numerous post grad courses for those without a previous formal environmental education, according to which companies should rely on three different areas: Profitability, Social Responsibility, and Environmental Responsibility, also known as 3Ps, Planet, People, Profit (Figure 1). The lack of multidisciplinary and transdisciplinary qualification (resulting from specializations in sustainability but within the initial graduation area), as well as the complexity of the systemic approach, makes the TBL a model to be followed, and summarized the performance of the company's sustainability professionals to the analysis Boundary of the economic, social and environmental points, as a framework for the determination of corporate sustainability (1-3).
Figure 1: Conceptual structure according to TBL.
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The basis for determining the sustainability of each sphere, and as a consequence of the company, lies in the concept of "what you measure is what you get", according to which the level of responsibility of a company In a given sphere depends exclusively on how much it is able to measure a given parameter, whether in its economic, social or environmental (4, 5). In this way, only when the three spheres overlap at equilibrium point the sustainability is achieved (Figure 2).
Figure 2: Interaction of spheres according to TBL.
The need for this overlapping lies in the failure to use TBL when trying to evaluate a particular problem in a systemic way. Although the overlapping view of the three spheres lies within the context of a holistic view, as we shall see, it is not within the systemic view. Three criticisms can be made of this approach based on its conceptual framework. 1. The first involves the "what you measure is what you get" which determines that it is necessary to measure the impact of the company in order to determine its sustainability. The obvious shortcoming of this approach is to ignore that in the social and environmental spheres what can be measured is a fraction of a total whose largest component is intangible (4, 5)
and as a result, the economic sphere will always be more represented than the others (6, 7). 2. The second criticism is the lack of systemic vision of the issue of sustainability,
providing a rigid structure of analysis that does not allow a correct integration between the 3
spheres, besides leaving the ecological issue aside. (6, 8, 9) 3. The third criticism lies in the fact that the concept of working in three distinct spheres does not realistically represent the complex interactions involved in them and their existing dependency relationships (10, 11). 4. The fourth criticism, as a consequence of the first one, is the presentation and socio-environmental results derived from internal activities, such as water saving, emission reduction (a popular point for companies in detriment of their other environmental impacts) and, (on the social issue), integration of employees on the basis of race and gender. It is obvious from an analysis of its corporate sustainability reports that it does not have the same concern about what happens outside the TBL overlap zone, i.e. corporation borders (9, 10, 12, 13). Although the view of the three components acting together is a holistic view, by ignoring intangible issues and considering sustainability as the interposition of three distinct spheres, it is not possible to consider TBL in any way within the scope of the systemic approach.
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The Systemic Approach. The systemic approach is based on the theory of complex systems to analyze
sustainability issues (11, 14-16) and although it is also a holistic view, it is also holistic approach, i.e. it is not enough to know what factors are involved in the problematic, it is necessary to know how they are involved and interacting, regardless of the form of their measurement (17-19). A practical way to understand these interrelationships is presented in Figure 3, in which one can observe how the systemic approach deals with the structure of environment, society, and economy. (4)
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Figure 3: Relationship between economy, society and the environment according to the systemic approach.
The first point to be observed is the distinction between the hierarchical concept structure of the economy, society, and the environment. While the TBL considers them to be distinct, the systemic approach correctly hierarchizes them, considering the dynamic interrelationships between the three spheres, so, as we observe in reality, the social dimension can not exist outside the environmental as well as the economic can not exist outside of the (5)
. This analysis becomes obvious when we consider that there are still traditional societies
that have no form of economic organization
(6)
, just as there are environments without the
existence of any human society. The second point is that the systemic approach, as represented by dotted lines, correctly identifies not only the constant relations of interdependence but also the positive or negative feedback loops involved as well the permeability between the three components (Figure 4) (7-9).
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Figure 4: Dynamics of interrelationships and feedbacks between the economy, society and the environment
In this way, it is possible to establish that the TBL approach, considering the spheres limiting the company's response to what can be measured, results in the incorrect understanding of the real scope of the corporate action with regard to sustainability. In addition, when the spheres are correctly organized by hierarchy level, it is evident in their pyramidal structure that all sustainability proposals are based (and derived from) environmental sustainability. Without it, the search for the others becomes obviously irrelevant (5). As stated, it is also fundamental to understand that although both approaches present a holistic view (this being the only similarity between them), the holistic view is not synonymous with systemic vision. 3
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