Businesses have long gauged their success by the strength of their earnings. Today, however, more and more businesses are striving for sustainability in the marketplace. They recognize a three-pronged bottom line consisting of profits, people and planet.
This paradigm shift in how you think about the bottom line of your business moves you from an approach that emphasizes pure profit to one that considers the multiplicity of stakeholders in your company. It asks that you manage not just your financial risks, obligations and opportunities, but your social and environmental ones as well.
Social and Environmental Responsibilities
There’s nothing wrong with thinking about long-term profitability and striving for growth. That’s why you’re in business, right? But thinking about the lives of the people your business impacts makes good business sense, too.
When you consider the well-being of your employees in your decision-making processes, you empower them to create success for your business. When you consider the welfare of your customers or clients, you offer products and services that make their lives better. When you promote fair trade, you show that you realize that the global economy is just as important as the local one.
Same goes for the environment. A healthy environment means that your products and services will continue to have viability without the added risks of market stress or shrinking demand caused by a planet in turmoil. As the theory goes: when the earth does well, so does your business. Making it your mission to help preserve the environment and conserve natural resources also helps ensure your company’s ongoing success.
When business owners make decisions, they rely on a whole host of information sources. From industry knowledge to client feedback, business managers use the tools at hand to set a course for making their company profitable and sustainable.
What’s important is that business owners don’t place themselves in a vacuum. They need to participate in a dialogue with others—accountants, lawyers, politicians, other business owners, the public—to evolve a better understanding of economics and how they can best serve the world at large.
Accountants especially have come to think about the business world in an inclusive way. If businesses are to survive, they have to be truly committed to looking at all the different forms of capital—financial, manufacturing, environmental, relationship, human, intellectual property—as an integrated system.