BU6019 Sustainable Entrepreneurship “The Triple Bottom Line”

So, what really is the Triple Bottom Line? A definition: “The measurement of financial, social and environmental performance over a period of time” Remember: TBL is often referred to as People, Planet and Profit! - John Elkington (1997)

People, planet and profit This should: Not be considered an alternative to existing business objectives Promote a positive impact of the enterprise Persuade consumers to change their behaviour in a positive way Remember: Stakeholders are watching what entrepreneurs do! (Consider also social costs and social benefits)

Self-study Find time to explore the following organisations, in relation to people, plant and profit: Timberland IKEA Marks and Spencer NESTLE Do remember however SMEs make up to 90% of the UK economy!

It’s good to think! What’s going on in the supply chain? (There may be a supplier further back in the chain, in a poorer country were environmental concerns are ignored) Will the TBL help to protect future generations? Should governments do more to encourage the TBL? (e.g. offering tax breaks when there is evidence of positive actions) It’s important to make sure outsourced work (or subcontractors being used) will meet the enterprises TBL requirements * Internationally, should children have to work, which takes away their opportunity for education?

A Question: Q: Should entrepreneurs (or shareholders if a company) be purely concerned with obtaining a good return or saving the planet? - Please write down your responses!

Some tools to consider: The Balanced Scorecard (pay attention to what’s being measured) A SWOT Analysis (create a TBL action plan!) A PESTLE Analysis (create a TBL action plan!) Value Chain Analysis (waste from one part of the value chain recycled to use in another part) TBL (or P,P&P) “Task and Finish” groups in the enterprise (creating opportunities to do more) Stakeholder Mapping Matrix (think power and interest) Self study: As soon as possible, carry out some research into the Mendelow Matrix (1991) which examines the power and interest of stakeholders.

Remember, remember… Most customers base their purchasing decisions upon price, quality, service levels and green issues! Q: To what extent is this true for you, when you make a purchase? Q: Are you concerned about how people, the planet and profitability of the supplying organisation is affected by the purchase you make?

The GENX Engine: Consider: Airbus and Boeing have incorporated the “GENX” engine into their planes. It is reported that this engine: Burns 15% less fuel (compared to conventional engines) Is 30% quieter Emits 30% less Nitrous Oxide Costs less to operate overall Q: Is this good for people, plant and profit? (Does this provide environmental and economic benefits to customers?)

The Triple Bottom Line (or people, planet and profit) Consider: Competitive edge Resources (Think of the “Transformation Process”) Societal expectations Entrepreneurship Values Perhaps its all about behaviours and stakeholder relationships! Customers may well realise packaging and marketing messages are meaningless - unless the enterprise actually does have a holistic approach to the TBL!

Using TBL for competitive advantage! Think about: “Recycling – reusing – reducing – rethinking! As an entrepreneur, this means using the Business Plan as a “live” document, clearly identifying the target market audience and regularly revisiting Business objectives Remember: marketing objectives, in the marketing plan, should always reflect the Business objectives! Entrepreneurs should rethink policies and procedures for each activity/department! Self-study: Spend some time looking up “Eco-Industrial Parks”

TBL and Conflict The Shareholder approach: The stakeholder approach: Shareholders/investors only aim may be to make profit! The stakeholder approach: Aim for high quality (therefore increased sales and profitability and job security – ie care for people!) Build better relationships (e.g. suppliers and 5 performance objectives – ie care for the planet!) Better pay for employees (enhanced morale and productivity) Better reputation (gain and retain customers and a competitive edge) Think stakeholder perception! Remember: There may be conflict when entrepreneurs encourage as many customers as possible to buy their products/visit their premises, increasing pollution through traffic congestion, etc! The local community may oppose this type of activity!

And finally… Changing the way people behave isn’t always easy! The concept of “change management” is important! Please look up John Fisher’s Transition Curve in relation to managing change in a business. Now, with Assignment 1 out of the way, we now turn our focus to Assignment 2!