To sustain your company and maintain a competitive edge takes commitment and planning. Adopting a triple bottom line (TBL) can be that road map to achieving business sustainability. Shorthanded to “people, planet and profit,” these interconnected pillars of TBL remake the traditional balance sheet and allow a business to survive and thrive. Your customers may already be applying this concept. Are you?


Credited in the mid-1990s to John Elkington, a recognized authority on corporate responsibility and sustainable development, TBL factors in a company’s economic, social and environmental effects. It has changed the way many businesses measure operations and success. Dow Jones now lists the top TBL-minded companies through its Sustainability Indices for the United States, North America and the world. In a 2013 national green practices assessment by McGraw-Hill Construction, nearly all of the corporate firms interviewed were engaged in sustainability in their daily operations.


“The majority of publicly traded companies have sustainability programs in place,” said Mark W. McElroy, Ph.D., founder and executive director of the Vermont-based Center for Sustainable Organizations. “TBL is their key to business longevity. Bottom-line-only thinking is quickly becoming dated.”


Can TBL be applied to smaller companies and those not publicly traded, such as electrical contracting (EC) firms? Frederic B. Sargent thinks so.


Sargent spent 30 years with Sargent Electric, based in Pittsburgh, before forming his own consultancy, SGT LLC, five years ago. In 2009, he wrote a book: “Reinvent Your Contracting Business with Sustainable Service.” 


“Today, there is much more to talk about regarding TBL,” he said. “I’ve made it part of my consulting business.”


While the word “sustainability” has been co-opted by many, McElroy and Sargent argue that you need to make it your own and make it relevant to your business.


“In the grand scheme of things, a sustainable EC business is not just one that works on LEED projects,” Sargent said. “It’s how a business conducts its work.”


Define and go


Under TBL, if a business is socially, environmentally or economically unsustainable, it is at risk. And so, it is important to define how you will practice TBL. McElroy suggested that a company first identify, based on its relationships with its stakeholders, what its social, economic and environmental impacts in the world already are, what they aren’t and what the company aspires to be.


“Once identified, the scope of a sustainability program can be defined,” he said. “TBL is flexible. It doesn’t have to be applied in equal thirds.”


Sargent feels ECs need to shift their “center of gravity” from project construction to project delivery using a sustainable business format that consistently yields recurring revenues.


“Every electrical contractor who markets and has been around for a while likes to brag about having repeat customers,” Sargent said. “But that’s not recurring revenue. Rather, you want to develop an ongoing stream of revenue that builds. Don’t forget but don’t solely focus on a backlog of existing customers. Win new ones.”


Sargent added that TBL requires understanding your customers. Instead of a customer list, he recommended developing customer profiles. Describe your customers. Track what you’ve done for them. Assess future needs, new service. Schedule times to touch base.


“You are now thinking sustainably with a mind-set of how to help,” he said. “A warranty is one approach allowing you to create a scenario so you can check in at least year to year.”


He also suggested looking at your supply chain, as it affects both your company and your customers. If purchases involve products made overseas, make sure they have a good rep, aren’t counterfeit, and are produced in good working conditions for their workers.


Breaking TBL down


“Customers, employees, neighbors or shareholders are, or should be, affected by TBL,” McElroy said. “These are your stakeholders whose well-being is affected by what you do.”


Sargent cited an example where multiple stakeholders could come into play, affecting your triple bottom line.


“In your customer’s eye, you rise and fall by the quality of the job you do,” he said. “But it’s not just the work. It’s how you go about doing it, like putting booties on before you enter a house or keeping your truck off soft ground. You do all that right, and you have a great customer outcome. But, say, at the end appointment, safety was ignored that caused worker injury. Your gain is now a loss. Making sure your workers go home at night as healthy and safe as they started their day is also part of achieving a strong TBL.”


Sargent also discussed environment.


“Doing things the right way is sustainable in itself,” he said. “Within your hourly rate, haul the cables, install the fixtures, but also break down the boxes and carry them down to the dumpster. Recycle what you can as you clean up after a day’s work. Be efficient at the job site and back at the office. Prefabricate materials at the shop so you are ready to go once you arrive at a job. You are not wasting material, time or money.”


He also said profitability will likely be a company’s first bottom-line measure.


“You want to make your profits sustainable,” he said. “Again, service is a key for ECs. I believe electricians’ service work should be double that of construction. The margins will be double, too. Your viability resonates when you are solving a problem for your customer. And use revenue as a means to grow your business. That might include purchasing fuel-efficient vehicles, which also address the environmental leg of your TBL effort.”


Measuring and reporting


Before you measure, you have to know what you are measuring within your TBL framework. What’s your essential or vital capital as it applies to people, plant and profit? Your “social capital” might involve fair and beneficial business practices toward your workforce and maintaining good relations within the community or region in which you do business. Your “natural capital” might represent in part how you manage your consumption of energy and how you reduce and dispose of waste. All are easily quantifiable. In turn, minimizing your environmental impact burnishes your social capital.


Finally, profit is only the starting point in calculating your “economic capital.” Ask what is the real economic impact on your business. Where or whom does it benefit? What’s vital? For example, is your payroll sustainable? Is it competitive? Perhaps your commitment to TBL is attracting coveted but elusive talent that will help you build your business. If a general contractor now looks to you as an adviser on smart energy use and good design, that’s a lasting impression with social and economic dividends.


In his time with Deloitte Consulting, McElroy developed an approach to managing the sustainability performance of an organization. Though it’s not the first and only approach, corporate sustainability management (CSM) offers a structure McElroy likes because of its specificity, something he found lacking in other methodologies. It’s also cyclical.


“Context in sustainability measuring and reporting is fundamental to CSM,” McElroy said. “Say you are a manufacturer that uses a lot of water. What is the relevant context of the heavy use of water? Is it how much water is available [or] the demand for that resource? Is there competition for it? What’s the size of the region you operate, its population and its climate? How do these all play into your water conservation? Simply asking how much water you used one year over the next isn’t a sufficient question. Context gets you to a deeper measure.”


CSM has six steps, as shown in the diagram above. The first step is defining what you want to do and how.


“How far are you willing to go with [TBL]?” McElroy said. “What will be its scope, priorities within the three bottom lines? What will it look like? What resources can you commit: a full-time or part-time sustainability manager?”


Ideally, you will also want employee buy-in. To engage them, maybe you create green teams, offer dashboard progress reports, or create award and recognition programs. Maybe you offer engagement ideas for existing or potential customers through green home or office competitions.


The second tenet of CSM is identifying your stakeholders. Customers, employees, shareholders, neighbors are all possible stakeholders whose well-being is affected by what you do.


Setting standards of performance is the third part of the CSM process. You need to decide how to approach your capitals defined within your people, planet and profit so they can in turn be meaningfully measured and assessed, the fourth CSM tenet. McElroy suggested something he devised: the Sustainability Quotient. To evaluate progress, divide actual performance data by what you set to achieve, i.e., your metrics. Now you have a score. A result of one or less for environmental factors, or one or more for social factors, indicates you’re operating within CSM boundaries.


The fifth and sixth tenets of CSM are, respectively, planning and interventions, and implementation. Not all plans go as expected. Perhaps measures need to be re-evaluated or “interventions” need to be in place when actions are falling short of goals. Actual impacts should align with your targets for an effective TBL.


“Don’t think of [TBL] as a rulebook so much as something you weave into the fabric of your business,” Sargent said. “It’s a proposition that will pay off.”