Sustainability in Business: The Triple Bottom Line and Six Forms of Capital

This document discusses sustainability in business, focusing on the Triple Bottom Line and the six forms of capital used by businesses. It explores the concept of sustainability and its impact on the environment and society. The document also examines the phases of the business approach to sustainability and highlights successful businesses that have adopted sustainable practices.

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Sustainability is one of the key business approaches in dealing with the organizational
environment. It is evident that the world is ever-changing hence the need to integrate a new
system of governance within the internal and external business operations. The business world
has experienced a growth of business participation in the sustainability strategy. In this case, the
business strategy focuses on its effect to the environment and also the society. The aim of
sustainability is to experience positive organizational impact to the environment and society.
Arguably, sustainability is correlated to business responsibility. This is therefore important to the
organization, the business industry and the people. Unsustainability in business has adverse
effects such as inequality, social injustice and environmental dilapidation. This paper tends to
focus on sustainability in business due to its dynamic nature. In this case, this paper will discuss
Sustainability, the Triple Bottom Line and Business. It will also identify the six forms of capital
used by the businesses. This document will also comprehensively examine the six phases of the
business approach to sustainability. I will also highlight successful businesses that have adopted
sustainable business as their strategy.
Sustainability, the Triple Bottom Line and Business
Sustainability is crucial to businesses and their environment. It is also hard to measure the
extent and degree of sustainable business. In this case, the Triple Bottom Line (TBL) is a
measure to determine the extent of sustainable growth in a business. It is also evident that the
traditional measure of sustainability lacks credibility since they relied on the business return on
investment, profits and their shareholders value (Slaper & Hall, 2011). In this respect, the
modern strategy integrates environmental and social outcomes. John Elkington developed TBL

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in order to evaluate the business inventories through examining the relationship between the
companies’ profits, the society and the world (Slaper & Hall, 2011).
TBL approach in measuring sustainable business is tricky since it does not have a
universal unit standard. TBL is however measures through the inclusion of social welfare and
environmental damage (Slaper & Hall, 2011). TBL can also be evaluated through a universally
and accepted index. In this case, TBL approach will compare organizations in terms of
performance between companies, development projects and also cities. An example of such an
index is comparing Coca-Cola and Pepsi-Cola’s performance.
The TBL index comprises Economic measures, Environmental measures and Social
measure. Economic measure is done through assessment of the TBL and monetary elements
(Slaper & Hall, 2011). The elements include income, expenditure, employment, business climate
and tax. Environmental measures consider factors such as natural resources and its potential
influence. The elements considered are this viability energy consumption, land use, water
quality, toxic waste and air (Slaper & Hall, 2011). Social measure basically gauges the social
dynamics of the business. This measure engages issues such as availability to social resources,
quality of life, equality, and social investment and employment rates (Slaper & Hall, 2011). The
Economic, Environmental and Social measures are also dependent on the level of the entity. The
other factors considered in these measures are the geographic scope and the type of projects
(Slaper & Hall, 2011). In this case, data is collect on the probable outcome of the operation. This
data is then passed to the stakeholders and experts.
The Six Forms of Capital used by Business
Businesses need capital to run their operation and they strive to make profits from their
inventories. People often consider capital as the monitory side of business however this is not

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always the case (Kay, 2005). The six forms of capital include Internal Economics /Financial
Capital, External Economic, Natural Capital, Human Capital, Social Capital and Manufactures/
Constructed Capital.
Internal economic capital is familiar since it consists of financial capital and non-
financial capital. Arguably, financial capital comprises of funds, organizational debt and fiscal
equity (Fratzscher, 2012). On the other hand, the non-financial capitals are attributes of brands
value. The external economic capital accounts for the organizations influence on the financial
and non-financial capital of other businesses (Fratzscher, 2012). In this case, providing a new
product my increase or reduce the value of the business subsidiary. Natural capital consists of
ecosystem services (Kay, 2005). In this cases, the business accounts to natural resources such as
mining and oil extraction. Human Capital is the most basic part of the business. This form of
capital tends to incorporate training of employs to improve their knowledge and skills (Kay,
2005). The organization also improves the employees working environment hence motivating
them to increase productivity. Social resources tend to encourage the employees build positive
relationship (Kay, 2005). This relationship aims to improve intellectual capital sharing.
Manufactured capital consists of material objects and created ecosystem. The manufactured
capital tends to improve distribution networks services and products (Coma & Douglas, 1928).
The Six Phases of the Business Approach to Sustainability
The six phases is designed to analyze and compare organizational commitment and
practice to sustainability. The main focus of the six phases is to assess business interactions in
terms of human and ecology. The six phases include Rejection, Non-responsiveness,
Compliance, Efficiency, Strategic Proactivity and Sustaining Corporation (Dunphy et al, 2003).
This phases aims in improving sustainability in the industry and the society.

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Rejection phase deals with the employees, society infrastructure and the ecosystem. The
business exploits these aspects to achieve an economic advantage. Some organizations ignore
corporate ethics such as neglecting their employees’ safety, health and welfare (Dunphy et al,
2003). The organization also rejects social responsibility and government policies.
Non-responsiveness is associated with lack of awareness (Dunphy et al, 2003).
Corporations tend to concentrate their business to conventional ways of governance. In this case,
the business operations goal is to create a compliant workforce environment. The system ignores
community issues and the probable environmental consequences.
Compliance phase goal is to achieve minimum organizational standards (Dunphy et al,
2003). This tends to reduce risks such as sanctions and litigations from regulators (Dunphy et al,
2003). Efficiency phase aims to grow the business awareness of sustainable business practices.
In this case, the business reduces costs and increase efficiency by utilizing human resources and
abiding by environmental policies (Dunphy et al, 2003).
Strategic proactivity phase tends to mold the organizations sustainability. The business
identifies that sustainability gives the business a competitive advantage over others (Dunphy et
al, 2003). Basically, the business positions itself as the best and most sustainable organization in
the industry. Sustaining corporation phase strategically engages the business toward
sustainability through allowing them to act sustainable and also encourages returns for the
investors (Dunphy et al, 2003). In this regards, the business objective is to actively support the
ecology, the society and inventories.
Examples of Business Engaged in Sustainable Business
Axion Structural Innovations LLC is one of the companies involved in sustainable business. The
organization tends to use recycle industrial waste and used plastic bottles. LEGO Group is has

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also engaged sustainability through its policy of reducing carbon footprint. The business goal is
to incorporate at list over 90% of renewable energy in their business by the year 2030.

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References
Coma, C. W., & Douglas, P. H. (1928). A theory of production. In Proceedings of the Fortieth
Annual Meeting of the American Economic Association (Vol. 139, p. 165).
Dunphy, D., Griffiths, A., & Benn, S. (2003). Organizational Change for Corporate
Sustainability: A Guide for Leaders and Change Agents of the Future. New York, NY:
Routledge.
Fratzscher, M. (2012). Capital flows, push versus pull factors and the global financial crisis.
Journal of International Economics, 88(2), 341-356.
Kay, A. (2005). Social capital, the social economy and community development. Community
Development Journal, 41(2), 160-173.
Slaper, T. F., & Hall, T. J. (2011). The triple bottom line: What is it and how does it work.
Indiana business review, 86(1), 4-8.