Triple Bottom Line - Criticism

Criticism

While many people agree with the importance of good social conditions and preservation of the environment, there are also many who disagree with the triple bottom line as the way to enhance these conditions. The main arguments against it are summarised below.

• Reductive method: In the triple bottom line, a corporate-oriented approach, the social—that is, the way in which humans live and relate to each other and the environment—is secondary. The economic as a domain is given an independent status which is ideologically assumed rather than analytically argued. In the most problematic versions, the economic is elevated to the master category and defined in terms that assume the dominance of a singular, historically specific, economic configuration—modern globalizing capitalism. Concurrently the environment comes to be treated as an externality or background feature, an externality that tends not to have the human dimension build into its definition. Thus, in many writings, even in those critical of the triple-bottom-line approach, the social becomes a congeries of miscellaneous considerations left other from the other two prime categories. Alternative approaches that treat the economic as a social domain, alongside and in relation to the ecological, the political and the cultural are now being considered as more appropriate for understanding institutions, cities and regions.

• Division of labour is characteristic of rich societies and a major contributor to their wealth. This leads to the view that organisations contribute most to the welfare of society in all respects when they focus on what they do best: the baker exchanges his loaves with the shoemaker rather than making his own shoes - to the benefit of both and by extension the whole of society. In the case of business the expertise is in satisfying the needs of society and generating a value added surplus. Thus the triple bottom line is thought to be harmful by diverting business attention away from its core competency. Just as charitable organizations like the Red Cross would not be expected to attend to environmental issues or pay a cash dividend, and Greenpeace would not be expected to make a profit or succor the homeless, business should not be expected to take on concerns outside its core expertise, provided the business doesn't do obvious harm to people or the planet.

• Effectiveness: It is observed that concern for social and environmental matters is rare in poor societies (a hungry person would rather eat the whale than photograph it). As a society becomes richer its citizens develop an increasing desire for a clean environment and protected wildlife, and both the willingness and financial ability to contribute to this and to a compassionate society. Support for the concept of the triple bottom line itself is said to be an example of the choices available to the citizens of a society made wealthy by businesses attending to business. Thus by unencumbered attention to business alone, Adam Smith's Invisible Hand will ensure that business contributes most effectively to the improvement of all areas of society, social and environmental as well as economic.

• Nationalism: Some countries adopt the view that they must look after their own citizens first. This view is not confined to one sector of society, having support from elements of business, labour unions, and politicians.

• Libertarian: As it is possible for a socially responsible person to sincerely believe that the triple bottom line is harmful to society, the libertarian view is that it would be arrogant to force them to support a mechanism for the improvement of society that may, or may not, be the best available. That is, those who would not force Greenpeace and the Salvation Army to generate a profit should not force businesses to take responsibilities outside their area of expertise. At least in areas where a business doesn't do obvious harm to people or the planet.

• Inertia: The difficulty of achieving global agreement on simultaneous policy may render such measures at best advisory, and thus unenforceable. For example, people may be unwilling to undergo a depression or even sustained recession to replenish lost ecosystems.

• Application: According to Fred Robins' The Challenge of TBL: A Responsibility to Whom? one of the major weaknesses of the TBL framework is its ability to be applied in a monetary-based economic system. Because there is no single way in monetary terms to measure the benefits to the society and environment as there is with profit, it does not allow for businesses to sum across all three bottom lines. In this regard, it makes it difficult for businesses to recognize the benefits of using TBL for the company, itself.

• Criticism from the Left: TBL is viewed as an attempt by otherwise exploitative corporations to avoid legislation and taxation and generate a fictitious people-friendly & eco-friendly image for PR purposes.