What is Triple Bottom Line – and how can spa businesses benefit from it?

The “Triple Bottom Line” (or TBL) approach to measuring the results of a business is gaining ground across all sectors of the global economy. In essence, TBL is based on the theory that companies should spend just as much effort in focusing on social and environmental concerns, as they do on profits. Put simply, TBL means that, instead of just one bottom line (profit), there should be an additional two: people and the planet.

The Three Ps

It was British sustainability guru and serial entrepreneur, John Elkington, who first coined the term nearly 30 years ago. He wanted to come up with a different way of measuring corporate performance – one which would gauge not only how much a business makes money, but would also its success in improving people’s lives and the wellbeing of the planet.

His vision was that TBL should be used to measure the financial, social, and environmental performance of a company over time. At the heart of it is the belief that a business which solely focuses on profits – and ignores people and the planet – cannot account for the full cost of doing business. In other words, it’s not sustainable.

Let’s take a quick look at what the three Ps really mean – and what they measure:

  • People:

The impact (both positive and negative) that an organisation has on its stakeholders – from employees, families and customers to its suppliers and surrounding communities.

Within the TBL framework, a “stakeholder” is any person who either influences, or is directly affected, by the company’s operations. For example, a large seafront spa operating next to a fishing village should count families living close to the spa as stakeholders, as they are likely impacted by issues such as tourism, coastal access and commercial opportunities.

  • Planet:

The negative effects that a company has on its natural environment, from consumption of natural resources and loss of natural habitats to waste creation and pollution. But also the positive ones, such as recycling, carbon footprint reduction, educating local communities, reforestation, restoration of natural harm done and net-positive energy solutions. For example, a resort spa might use some natural resources from its surrounding environment, but offsets its consumption by operating within a renewably powered and positive carbon building, which provides local communities with energy. It might also run educational opportunities for the local community, aimed at improving environmental practices at a local level.

  • Profit:

As well as measuring the financial gains of the company, the TBL approach assesses the impact an organisation has on the economy at a local, national and international level – from paying taxes and generating wealth to creating employment opportunities.

Why is TBL so important?

So, why should spas care about TBL? What’s its relevance to wellness-related businesses?

Well, firstly it’s important to point out that adopting a TBL way of measuring success doesn’t mean that societal and/or environmental impact should be valued higher – and at the expense of – financial profitability. In fact the opposite is true. Countless businesses have found that TBL has resulted in improved financial results. The reason is simple – when you start measuring something, you become more accountable for it. Reducing waste, saving energy, cutting utility bills, employee retention and increased customer satisfaction all have a positive effect on the “traditional” bottom line. In short, for many businesses, TBL is a way of committing to sustainable practices which have a positive effect on all

Secondly, using TBL to measure your success makes it easier to profile yourself as a sustainable business. Reports which showcase your environmental and societal credentials can make a huge difference when it comes to marketing your business to consumers who are increasingly “sustainability-aware”. Research by Nielsen, conducted prior to the pandemic, found that 48 percent of US consumers would change their consumption habits to lessen their impact on the environment.

But most importantly, TBL is a way of ensuring your business practices become more sustainable. It is a bold claim, but true – measuring and taking responsibility for all three “lines” can not only help solve problems within local communities, but on a global level too. Imagine the impact a multinational conglomerate, with operations around the globe, could have if it sticks to TBL in everything it does?

How should TBL be measured?

You might have already come across TBL in previous communications from the Sustainable Spa Association. This is because it is one of two global frameworks that we use to define a sustainable spa. The two frameworks are:

• Triple Bottom Line Business (People, Planet and Profit)

• United Nations Sustainable Development Goals (UN SDGs)

We use TBL alongside the SDGs because evidence provided through TBL reporting shows the benefits of a business that invests in sustainability outcomes. But all of it does need to be measured. 

In short, TBL requires company-wide adoption to be successful. However, it is a good idea to have specific employees having more direct involvement in establishing the specific goals, measurements, and steps to achieve sustainability. As TBL is a cost-accounting measure, those responsible for monitoring finances, budgets and accounts – such as financial officers and accounting directors – should be the ones tracking measurements and reporting results.

The exact measuring of success across all three areas can, admittedly be tricky, as some of the actions (such as educating local people about their impact on the environment) don’t exactly fall under traditional accounting practices.

However, departments that most affect sustainability – and have the biggest impact on the environment or people – need to assess their responsibilities and identify the actions which impact TBL. At spas, these activities include:

  • Facility operations (water, energy, waste)
  • Supplier partnerships (packaging, transport, ingredients used in treatments and amenities)
  • Community outreach programmes
  • Sourcing of food and beverage
  • Use of plastic across facility operations

Each company can come up with a TBL system which works for them – as the practices to achieve the goals will differ from one to another. The size of a company or enterprise will also affect the set goals and measurements.

At SSA, we use TBL and UN SDGs because a business embedded in a sustainable economy offers considerable opportunities for the growth of its reputation, its people and community whilst lowering its environmental impact.

If you need any information or guidance on TBL, don’t hesitate to get in touch!