1. Proutist Economic Development Triple Bottom Line
Dr. Michael Towsey
and
Dieter Dambiec
This presentation discusses an emerging concept in company accounting - the Triple Bottom Line.
 2004 Proutist Universal

2. economy ecology community
Recall the idea that economics, community and environment are an integral system. One cannot be abstracted from the others.
ecology
community
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

3. financial value human & social value ecological value
sustainability
human & social value
ecological value
A business enterprise takes place around three kinds of value which interact.
A sustainable business will have three positive balances.
The Triple Bottom Line focuses attention on three kinds of added value – economic, human / social and environmental.
Likewise, businesses produce three kinds of value – financial value, social/community value and ecological/sustainability value. The key concept in the theory of triple bottom line (TBL) is that, in order to be sustainable, a business must have positive balances in all three areas.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

4. The triple bottom line The triple bottom line Financial balance sheet
Human / Social balance sheet
Environmental balance sheet
Income
Positive outcomes
Expenditure
Negative impacts
Profit
Net social benefit
Net environmental benefit
The triple bottom line is a way of accounting for the net value added in each of the three areas, financial, social and environmental.
The triple bottom line
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

5. Who is doing it?
Royal Dutch / Shell Group
BP (British Petroleum)
Rio Tinto
British Telecom
Volkswagon Group
Toyota Motor Corporation
Credit Suisse Group
Around 290 businesses in 29 countries release sustainability reports based on the guidelines of the Global Reporting Initiative (GRI)
Some big multinational companies are now interested in and are practicing triple bottom line accounting.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

6. Why are they doing it? The Prestige…
                                           
Big companies are being pushed in this direction in order to protect their image. A survey indicates that around 30% of consumers in the UK will boycott companies that they believe have policies which damage the environment or exploit poorer nations.
The Prestige
– Oil Spill 2002
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

7. The Prestige Oil Spill
An environmental catastrophe occurs as a tanker sinks off the coast of Spain.
The stricken Bahamas-flagged Prestige, carrying millions of barrels of oil, leaves a slick over 200 metres wide and 30 km long off the north-western Spanish coast.
The slick threatens one of Europe's most picturesque and wildlife-rich coasts.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

8. Who does the clean up work and pays?
Members of the French Navy deliver oil-trapping nets to Galician fishermen.
Workers place a floating barrier to protect the coastline from spilled oil.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

9. What are the impacts? Oil washes up on the shore in Camelle.
Spanish sailors help shovel sludge off an oil-stained beach.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

10. Who has to live with it?
Inhabitants of Camelle watch clean up efforts for the Prestige oil spill.
A resident walks on an oil-soaked shore near Porto do Son.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

11. Sustainability But what is happening now?
Companies have a social responsibility to ensure their business practices are sustainable.
But look at the derangements:
The idea that business has a social responsibility is fundamentally subversive Milton Friedman
Anyone who does anything for anything other than profit is either a madman or a bankrupt Mr McKinnon, Minister for Defence, Australia, 1970s.
But what is happening now?
In short companies are being forced to recognise that they have a social responsibility. Milton Friedman belongs to the past!
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

12. Shell Report 2002
This is the 2002 web report of Shell Oil. Note the left side of the screen showing contents of the report. See the three sections on economic performance, environmental performance and social performance. Note this particular project in which Shell is working with NGOs and conservation groups in Africa. Note also the small print at the bottom which states that this Shell report has been audited by two internationally respected auditing firms.
For 2003 see:
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

13. The social auditing cycle
A sustainable company will:
Define its values
Define its social and environmental objectives / targets
Identify stakeholders – all those affected by its business
Account for all components of its social objectives
Report the accounting results
Have the report independently audited by qualified social auditors
Set new targets and improve its performance
A lot of academic attention has been given to the problem of accurate and useful social reporting. The above concept of a social auditing cycle is supposed to parallel the equivalent financial auditing cycle. Typically the term "social auditing" also covers the environmental aspects as well as the social.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

14. The benefits of social auditing
“Improved employee satisfaction … improved relationships with key government stakeholders, community groups and non-government organisations … improved reputation in the market place.”
(BP Australia)
“Improved relationship with regulators.”
(Integral Energy, Sydney)
Some benefits of TBL reporting identified by practioners.
See research by the New South Wales Chamber of Commerce:
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

15. International standards
International reporting standards:
Global Reporting Initiative (GRI) established 1997.
Reports should be verifiable.
Steering group includes: U.N. Environment Program; World Business Council for Sustainable Development; New Economics Foundation.
International auditing standards:
AccountAbility: Institute of Social and Ethical Accountability.
AA1000 Assurance Standard (2002).
Two key areas of academic research on triple bottom line accounting are reporting and auditing. What is a useful and meaningful report? Statements such as "We improved the environment" are meaningless. The key problem is to identify relevant meaureable quantities that are also meaningful in terms of quality of life. The other major issue is auditing standards.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

16. Maleny Credit Union www.malenycu.com.au
Here is the TBL report of a small credit union in Maleny, Australia. Note the three bottom lines and the attempt to report quantitative data for each.
- Ecological Sustainability indicators
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

17. Maleny Credit Union Governance Policies:
During the course of the MCU Board developed and accepted a governance policy based on the Carver Model.
See:
The MCU Governance Policy covers:
Financial Sustainability;
Social Sustainability;
Environmental Sustainability.
The governance policy directs the operations of the MCU and is reviewed regularly by the Board.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

18. Quadruple bottom line Where do we go next?
The quadruple bottom line adds in culture as an accountability, reporting and auditing requirement.
It recognises that business can promote and learn from indigenous culture - thereby creating economic, social, environmental and cultural benefits.
See for example in New Zealand (Aotearoa):
Also (it may be the 4th or 5th bottom line):
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

19. Quintuple bottom line
The quintuple bottom line looks at how an enterprise works cooperatively and how the cooperative itself promotes social equality in society as a whole.
An extension of the quadruple bottom line?
Enterprises should aim to achieve a society free from all social inequalities with the human race moving in unison in its diverse and elevated expressions.
Eg, to achieve social parity, Unity: Journalists of Color Inc demands that by 2008 minority journalists should comprise no less than 20% of American newsrooms, and at least 15% of newsroom managers.
See:
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

20. Cooperative action
The structural commercial or business model required to achieve social parity in day-to-day interaction and working life is the cooperative enterprise.
Cooperatives are the main means of ensuring rational distribution of profits to workers and / or shareholders in the local economy.
They aim for social equality and equal locus standi.
The cooperative system is capable of ensuring the social welfare of all citizens in the local economy.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal

21. Proto-spiritual outlook
To achieve social parity and implement the principle of social equality requires a broad outlook and universal view.
This is the proto-spiritual mentality.
In this way limiting geo-sentiments and socio-sentiments can be easily surmounted.
The movement is toward neo-humanism - respect for all humans, animals & plants and their worlds.
A Gaian nature-friendly ethic and practice.
Dr. Michael Towsey & Dieter Dambiec
Proutist Universal