November 2024
Karen Groves explains the important concepts of Corporate Social Responsibility (CSR) and Triple Bottom Line (TBL) reporting.
Ethics is assessed throughout the AAT qualification, and part of your studies will include Corporate Social Responsibility (CSR) and the Triple Bottom Line (TBL) reporting. So what are they? CSR is an approach that contributes to sustainable development, by delivering economic, social and environmental benefits for all stakeholders (not just shareholders).
A lot of companies already commit to CSR, which involves setting environmental targets – for example carbon emissions, producing reports and taking responsibility for the company’s impact on the environment and social wellbeing. CSR usually involves companies going above and beyond what is required by regulators. An example of this could be implementing new ‘greener’ operations.
TBL reporting is used to expand the traditional company reporting of financial performance, considering both environmental and social performance. TBL is also referred to as ‘integrated’ reporting, and consists of three Ps: People, Planet and Profit.
The triple bottom line approach was created by John Elkington in 1994. His argument was that companies should be preparing three different, and quite separate, bottom lines as follows:
- The bottom line of a company’s People account, a measure of how socially responsible a company has been throughout its operations.
- The bottom line of the company’s Planet account, a measure of how environmentally responsible it has been throughout its operations.
- The bottom line of the Profit and loss account – the traditional measure of profit
The aim of TBL is to measure the financial, social and environmental performance of a company over a period of time.
The framework has been developed to help companies demonstrate they are behaving in a sustainable manner.
Companies that adopt the TBL approach are working towards reducing their ecological footprint by managing their resources and minimising environmental damage, both now and in the future.
Measuring performance?
Considering the three Ps – People, Planet and Profit – the following examples could be used in the workplace:
People
- Jobs created and diversity of employees
- Pay levels for staff
- Accident rates in the workplace
- Length of employee service
Planet
- Gas and electricity usage
- Resources recycled
- Any pollutants produced
- Any greenhouse gases produced
Profit
- Profit of an individual company
- Profit of a division or department
- Profit of a chain
- Taxes paid
Question
Identify ways an office could reduce its carbon
footprint.
Answer
- Switch off lights when leaving at night to reduce electricity consumption.
- Limit printing of documents to reduce waste paper.
- Switch off computers when not in use to reduce electricity consumption.
- Turn down heating, switch off air conditioning when leaving the building at night.
- Use energy saving light bulbs.
- Ensure there are plenty of recycling bins around, to encourage staff to recycle items.
- Hold online meetings where possible to reduce travelling.
- Karen Groves is an AAT tutor and AAT Faculty Director at e-Careers
