What does triple-bottom-line accounting measure?

Triple-bottom-line accounting is a comprehensive framework that evaluates a company’s commitment to sustainability and its overall impact on society. It measures three key dimensions: economic, social, and environmental performance. This approach advocates for a broader perspective on business success, urging companies to consider not only their financial profits but also how their operations affect the community and the ecosystem.

The economic component assesses traditional financial performance, such as profits and revenue. The social aspect evaluates how a company's operations influence people, which includes workforce conditions, community engagement, and social equity. The environmental dimension examines the sustainability practices of a business, considering factors like resource utilization, waste management, and ecological balance.

By adopting triple-bottom-line accounting, businesses aim for sustainable development, ensuring that their operations do not compromise social and environmental integrity while pursuing financial goals. This is particularly significant in today's business environment, where stakeholders increasingly expect organizations to operate responsibly and accountably regarding their broader societal impacts.