Overview
Triple bottom line (TBL) accounting, coined by John Elkington in 1994, expands traditional financial reporting to measure organizational performance across three dimensions:
- Profit: Economic value created (or destroyed) — traditional financial accounting
- People: Social impacts — worker welfare, community effects, supply chain conditions
- Planet: Environmental impacts — carbon footprint, resource consumption, ecosystem effects
The premise: no organization can be truly successful if it creates profit while destroying social and natural capital.
Relationship to ValueFlows
ValueFlows and REA accounting provide the data infrastructure to support TBL and other multi-dimensional accounting frameworks by capturing the full flow of economic events rather than just monetary transactions.
Limitations
- Measurement difficulty: Social and ecological values resist quantification
- Greenwashing risk: Companies adopt TBL language without meaningful change
- Trade-off problem: Framework doesn’t resolve conflicts between the three dimensions
Related
- ValueFlows — Resource event accounting that can capture social and ecological flows
- REA Accounting — The underlying model for multi-dimensional economic accounting
- Finance and Economics — Broader economic context